There are a lot of deadbeat tenants floating around these days. During the housing crisis- and still today – millions of Americans decided they no longer needed to honor contracts they signed and they walked away from their mortgages.
As you can tell I think it’s disgusting and have little respect for people without integrity. Especially when these same people are trying to become mine and your tenants. Of course, I bring this up because a buddy of mine just let tenants like this into one of his properties and now they’re not paying the rent.
If they don’t care about paying the mortgage on their own house, what makes you think they really care about paying you? That’s why today, more than ever, you have to screen the heck out of people and make sure only quality tenants get into your properties.
In fact, there’s only one way…
I can think of to make sure that your rent is actually guaranteed when you let someone move into your house, which is want I want to talk about today. It’s called the Section 8 housing program. If you’ve heard of it before, you’ve probably heard very negative things about it.
When I first started out in this business I heard horrible things about section 8. Many people advised me not to do it. Then, one day, I met an investor who loved it and everything he told me made sense, so I went out and investigated it myself.
And lo and behold, I think it’s a wonderful program that you should definitely consider. Why? Well… simply because your rent is guaranteed by the government. For example, if your monthly rent was $1,200 a month, your tenant would most likely pay you $50 and the government would pay you $1,150.
More importantly, you don’t have to worry about the tenant not paying their share and you don’t have to worry about them causing any problems. The reason being, is that in many cities, the wait for a section 8 voucher is 2 years long or more. Once a tenant gets a voucher they’re on their best behavior because they know if they don’t follow the rules they could lose the voucher and have to wait years to get one again.
One of the “myths” of section 8…
Is that you can’t control whom you let in your house. That’s not true. A section 8 tenant is just like a regular tenant. You meet with them, you can screen them and if you don’t like them (following the fair housing rules of course) you don’t have to let them into you property.
In all my years of doing section 8 housing, I’ve only had one minor problem. On a property I had in Baltimore, MD I had a neighbor complain to me that my tenant was smoking marijuana and the smell was coming into her house.
So, I called the housing counselor for this tenant, told her what was going on and she went over to the property and had a meeting with the tenant and the problem never happened again.
Bottom-line, if you’ve got vacancies right now, go to your local housing office and learn about the section 8 program in your town.