DEAR BOB: I would appreciate your expert advice on a touchy subject for residential landlords. Should I rent to Section 8 tenants whose rent is subsidized by the federal government housing program? After talking with fellow landlords at the monthly meetings of the local real estate investor’s club, I am confused. Some landlords tell me Section 8 tenants are wonderful. But others tell me those tenants and the housing authority are a big pain. Whenever I had a vacancy, I get phone calls asking, “Do you accept Section 8 vouchers?” What should I do? – Mark T.
DEAR MARK: My best “all star” 13-year tenant was on Section 8 subsidy. And my worst tenant, who only paid $10 per month rent (when she felt like paying), was on Section 8. I’ve had other Section 8 tenants who were neither very good nor very bad.
For readers not familiar with the Section 8 federal government rent subsidy program, it helps low-income renters afford decent housing. Section 8 tenants pay 30 percent of their income for rent and the government pays the balance. But there are city-by-city maximum rents.
Purchase Bob Bruss reports online.
The concept is great. It works especially well with senior citizen tenants. But there is extensive paperwork for both tenant and landlord. Also, it’s hard to check tenant credit (which is often very bad).
My biggest complaint is the annual inspections by a local housing authority inspector. Some inspectors are very nice. Others are the meanest people you will ever meet.
One inspector demanded I re-carpet the tenant’s house because the stair carpet was a bit worn (but not dangerous). I said, “Fine, but I’ll have to pay for the new carpet with a rent increase that will be above your limit.” Suddenly, she changed her mind and said, “That carpet isn’t so worn after all.”
By best advice is, unless you have trouble filling your vacancies with good quality tenants, avoid the hassles of Section 8 tenants. Most Section 8 tenants are extremely appreciative, but dealing with the local housing authority bureaucrats can be very frustrating.
IF HOME DOESN’T SELL WITHIN 90 DAYS, THERE’S A GOOD REASON
DEAR BOB: My home has been listed for sale with a fine Realtor since early September. Following your instructions, we interviewed four local Realtors. They were all very professional. Just like you said they would do, each provided us their written CMA (comparative market analysis) forms and gave their opinions of our home’s likely sales price. We selected the agent we thought was best. But she insisted on a 120-day listing (although you recommend 90-day listings). However, our house hasn’t sold, although we reduced the asking price by $15,000. There have been very few showings–about one or two a week. When the listing expires, should we re-list with the same agent? – Richard N.
DEAR RICHARD: No. I notice your letter comes from a city with a very active home sales market. If it was from a depressed market area, where the average home sale time is 120 days or more, then I would suggest renewing the listing for 30 or 60 days.
The primary reason homes in good condition don’t sell is that the asking price is too high. But you followed your listing agent’s advice, which apparently wasn’t out of line with the CMAs from the other agents, and you even reduced your asking price by $15,000.
An unspoken reason some homes don’t sell is a bad listing agent. That means your listing agent is not liked by other local agents. The result is other agents will show a disliked agent’s listings only if they have nothing else to show to prospective buyers.
Your listing agent had her chance. I suggest you phone those three other agents you interviewed to ask if they want to list your home. However, only list for 90 days, to put maximum pressure on the listing agent to get your home sold.
IF YOU ARE 62 OR OLDER, YOU ARE ELIGIBLE FOR A REVERSE MORTGAGE
DEAR BOB: When my mother, age 85, passes away, her house will become mine. I have lived in her house for over 30 years. I am now 58. When I inherit the house, will I be eligible for a reverse mortgage? – Sharon A.
DEAR SHARON: After you become 62, you should be eligible to obtain a reverse mortgage secured by your principal residence.
However, if it has a large mortgage at that time, you might not be able to qualify. Further details are in my special report, “The Whole Truth About Reverse Mortgages for Senior Citizen Homeowners,” available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.bobbruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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