Business
In episode 16 of the Profitable Powerhouse Properties Podcast, your hosts Jonathan Cook and Bryan Jenkins interview Charlene Minor from Bailey & Hunter LLC, and Joe Levio, AHI Properties’ Leasing Manager in Oklahoma City. They discuss the vetting process of Section 8 tenants, potential benefits to participating in the program, and more. Episode Highlights: You can have the best property out there, but if it doesn’t have tenants, you aren’t going to make any money. 80% of Charlene’s portfolio involves housing vouchers. Every housing authority is going to have different requirements for tenant approval. With Section 8 tenants, you can’t charge more than one month rent for a security deposit, and you can’t charge extra fees. One big objection to Section 8 tenants by property managers is a perceived inability to get a tenant out if they violate the lease. There are a lot of misconceptions and generalizations people make about Section 8 tenants that are incorrect and harmful, like assuming they are more likely not to pay their rent on time. Charlene does a home check for Section 8 tenants in their current home to assess cleanliness, pet screenings, whether they have a car, etc. There may be slightly higher cost up front to approving a Section 8 tenant, but that money is made up by the longevity of that tenant in the property. If your voucher tenant has failed their inspection, they have to complete any repairs they’re responsible for within a certain amount of time or they’re removed from the voucher program. In some cities, if the landlord doesn’t complete repairs they’re responsible for within a certain timeframe, then the tenant’s rent can be abated. Often, you can get higher than market value rent from Housing Authority tenants. Whether your tenant is a Section 8 tenant or not, you should know who they are so that you don’t expect, for example, an elderly person to crawl into a loft to change an air filter. It can take the housing authority a couple of months to make banking transitions if you make changes. Certain investors will find participating in the voucher program particularly beneficial. 3 Key Points: The tenant approval process for Section 8 tenants is similar to an average tenant. There are protections in place for property managers and landlords with Section 8 tenants. Working with the housing authority and Section 8 tenants is not as scary as it seems. Tweetable Quotes: “Just like with any other investment, with real estate we always recommend you have a reserve available for those big items. The big ticket item I mentioned was the septic, that’s several thousand dollars.” –Joe Levio [I think] “The Atlanta housing authority is desperate for houses because they have so many people with vouchers & not enough landlords participating. So they’re offering much higher rents, they’re offering leasing incentives… they’re doing everything possible.” –Charlene Minor “It’s all about treating the tenant well and trying to understand the tenant. Like Charlene said, you’ve got to know your tenant. It can’t be a blanket ‘all tenants are the same.’ No they’re not!” –Jonathan Cook Resources Mentioned: Check out our website ahiproperties.com Check out Birmingham Insurance Group online or call them at (205) 616-1107 Buy, sell, and own investment properties the way the pros do it with www.roofstock.com Email Jonathan and Bryan at Podcast@AHIProperties.com Charlene Minor Contact Info: Phone: 770-912-6496 Email: Charlene@baileyandhunter.com