Tampa Property Management Part III – Rental Property Groups – Low Income/ Section 8 Tenants
Low Income/Section 8 Tenants are without a doubt the most time consuming and frustrating of the three tenant groups. These people are broke and are always struggling to make ends meet. Collecting rent is a hassle. If you are dealing with 10 Lower Income Tenants, you will be chasing money from 7 of them. This does not mean you will not receive your rent. It just usually means that most of them will pay late.
Part I – Tampa Property Management for Low Income/Section 8 Tenants
The exception to this rule is Section 8 Tenants who will usually pay their portion on time 50% of the time. As a professional property manager in this group, I still collect 95% of the rent each and every month.
You will have a much higher rate of eviction with the lower income tenants and virtually no evictions with the Section 8 tenants. I prefer to deal mostly with Section 8 tenants and usually only rent to the lower income people when I find an exceptional tenant. This is legal because the Section 8 tenants must have good rental history, no recent criminal background, do not owe money to a utility company, and have the money to pay the rent. You will find it much harder to find a low income tenant that meets this criteria. Therefore, you are not violating any discrimination laws because you are consistent.
Low Income/Section 8 Tenants are typically not very demanding on maintenance. You will usually find them very appreciative of timely maintenance. AC repairs should be resolved very quickly because this is very upsetting to any of the 3 groups. Most landlords complete repairs slowly if at all in this rental group. Tenants often wait many weeks or months for the simplest of repairs. Therefore, these tenants love a landlord who actually fixes things quickly and will often stay longer and refer their friends to you.
This tenant group behaves and thinks very differently than almost all landlords. To be successful as a property management company in Tampa dealing with these tenants, you must not hold them to the same standard as the professional or blue collar groups. As a whole they will not be as neat or tidy. You will find communicating with these folks frustrating and tiring at first. It takes awhile to realize these people are usually very nice and mean well but are simply not responsible as a whole. There will a lot more violations of the lease, damages, and annoying phone calls from this group than any other. Patience and consistent enforcement of the rules are the keys to success.
Low Income/Section 8 Tips for Effective Property Management in Tampa
1) This group typically has horrible credit 95% of the time. You must ignore all collection accounts and medical bills. The credit report reveals only three important things to you: do they owe money to another landlord, have them been evicted before, and do they owe money to an electric company. If the answer to any of these three questions is yes than you must disqualify them and move on.
2) Meeting these people in person is important in evaluating them as a tenant. Pay very close attention to how the kids behave. If the kids are screaming and yelling, you should pass. Parents who do not control there kids in public especially in meeting a new landlord will let their kids do a lot of damage to your property.
3) If all things are equal, choose Section 8 tenants that have been on the program for at least 3 years. They have proven themselves and usually can be relied upon to pay their portion of the rent and take care of your property. Families who have just gotten their first Section 8 voucher are unproven and can be some of the worst tenants you will ever find.
4) Be patient with this group when it comes to rent collection. This group often encounters financial problems and cannot quite make ends meet. If they have been with you awhile, you should be open to occasionally setting up a payment plan to have the rent paid at several points in the month. Do not ever let them get a month behind in rent but it is common for them to be ½ a month behind a couple times in the year.
5) Your property management company in Tampa should strictly enforce the late fees. However, I find it useful from time to time to waive the fees if the clients are having some sort of setback. This should not be done every month but I might waive the fee twice in a year for a long term tenant.
Traps to Avoid as a Tampa Property Manager with Low Income/Section 8 Tenants
1) A Tampa Property Manager should never believe any story of why the entire rent for the month cannot be paid. You must insist rent is paid by the 15th or you will file for eviction. Section 8 tenants are much easier to deal since the government pays 50-100% of their rent. If they do not pay you and you must evict them, the Section 8 office will kick them off the program for at least 5 years. These tenants know this and usually pay the rent in a timely manner. For the late payers, you must consistently follow-up with them about the rent and send letters to their Section 8 counselor if they do not pay.
2) The full month security deposit is in my opinion a bad idea unless you are in hot rental market. These people do not have a huge amount of savings and often it takes every dime they have to pay for the moving truck, utility deposits, the first month’s rent and security deposit. The rental property rents much faster if the security deposit is ½ of the first month’s rent. The money you save by having the house rented sooner will far offset the extra ½ month in security deposit.
You will have these tenants want to set-up a payment plan for the security deposit. This is not a warning sign but economic reality. Low Income/Section 8 tenants are broke across the board. If they have excellent rental history, I would consider a payment plan, but you should collection at least ½ of the deposit up front.
3) Beware of any tenant showing up who has first and last month’s rent and a security deposit in cash and needs to move-in this weekend. This is an immediate red flag, and 8 times out of 10, the tenant is trying to get you to skip the application process because they have evictions or a criminal background. You must complete the application process no matter what the story or circumstances.
These tips and insights will serve your Tampa property management company well in choosing the right tenants and dealing with their unqiue challenges.