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Old 08-31-2008, 10:15 AM
 
333 posts, read 919,541 times
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Default Section 8 Security Deposit. How much? And would you allow pay over time?

Hi,

My home is on the market as a rental property in the city of Atlanta. Rent is $2000, but realistically Section 8 will probrably approve around $1700. That aside what would you charge a section 8 tenant for security deposit on a $2000 rental. I know they can't afford much but I need to protect my interest as well. Also, would you be willing to allow the tenant to pay the security deposit over time?
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Old 09-01-2008, 06:35 AM
 
Location: Palm Coast, Fl
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I believe that section 8 decides what the deposit amount is capped at, just as they decide what their clients are allowed to pay for the rent. Everything is governed by Section 8. Call them.
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Old 09-01-2008, 07:29 AM
 
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There is no cap here in atlanta. The security deposit just cannot be more than the rental amount. However, I was just trying to get an idea of what type of deposit landlords typically see a section 8 tenant paying. I would like to get 1 months rent, but obviously a section 8 tenant would not be able to afford that otherwise why would they be on section 8? I was thinking of charging a $900 deposit, but don't know if this is realistic.
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Old 09-01-2008, 04:00 PM
 
Location: Palm Coast, Fl
2,248 posts, read 5,682,993 times
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Quote:
The security deposit just cannot be more than the rental amount.
That is a cap.

According to the HUD site, the tenant is not allowed to pay more than 40% of their gross income for housing and utilities. They are responsible for their own security deposit. I don't know if HUD would approve someone making over $50K a year for vouchers..do you?
If they're making $50K/year they should have $900 for a deposit, no?
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Old 09-01-2008, 04:33 PM
 
Location: Southwest Austin
4,884 posts, read 9,346,664 times
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Quote:
Originally Posted by atlcharm View Post
Hi,

My home is on the market as a rental property in the city of Atlanta. Rent is $2000, but realistically Section 8 will probrably approve around $1700. That aside what would you charge a section 8 tenant for security deposit on a $2000 rental. I know they can't afford much but I need to protect my interest as well. Also, would you be willing to allow the tenant to pay the security deposit over time?
No, never let any tenant pay the security deposit over time, period, under any circumstance. It's simply a very, very bad idea and one that you will later regret.

Don't rent to Section 8 tenants unless for some reason your property can't attract regular tenants. At $1700/mo., in Atlanta, your home is renting well above the average/median rent value for the city. Why on earth would you want to place a high risk tenant in the property? Just curious.

We discontinued accepting sec 8 tenants about 8 years ago. Never again, ever. Period. I won't share the nightmare stories here, but they are aplenty. Think long and hard before participating in the sec 8 program.

Steve
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Old 09-01-2008, 04:41 PM
 
333 posts, read 919,541 times
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I know what a cap is. I just meant that it is not capped at some figure less than the rental amount. Yes, the tenant is not allowed to pay more than 40% of their gross income which is how I figured my deposit if I did the math correctly. I just took 25k which is $2083 a month of which $833 would be the portion that the section 8 tenant pays. Therefore, I would round up and require a deposit of $900.

Where are you getting the $50k a year?
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Old 09-01-2008, 04:53 PM
 
333 posts, read 919,541 times
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Quote:
Originally Posted by austin-steve View Post
No, never let any tenant pay the security deposit over time, period, under any circumstance. It's simply a very, very bad idea and one that you will later regret.

Don't rent to Section 8 tenants unless for some reason your property can't attract regular tenants. At $1700/mo., in Atlanta, your home is renting well above the average/median rent value for the city. Why on earth would you want to place a high risk tenant in the property? Just curious.

We discontinued accepting sec 8 tenants about 8 years ago. Never again, ever. Period. I won't share the nightmare stories here, but they are aplenty. Think long and hard before participating in the sec 8 program.

Steve

Yes my home is renting for above the median value, I know. Which is why I veered toward section 8. Many of the projects in atlanta are being torn down which has resulted in about 50,000 people being displaced, so I thought I'd have a good chance of being accepted into the program. Average rental rates on my side of town is about $1400 to $1500. My mortage plus taxes on a $200k loan is $1764. I live in the home alone and have never missed a payment, but I struggle to make ends meet due to this high mortgage. I thought about roommates, but figured I'd have my privacy if I just move into a smaller place and rent the entire home out. If the section 8 plan falls through then my plan is to stay here and just get roommates. I have a 4 bedroom/2.5 bath craftsman style home. Fairly new, built in 2004.

So to answer your question, desperation is what has me looking at the section 8 program, oh and guaranteed rent. At first I intially thought I'd rent the home to students, but felt that section 8 tenants would be a little more responsible than students or am I wrong?
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Old 09-01-2008, 05:50 PM
 
Location: Southwest Austin
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Quote:
So to answer your question, desperation is what has me looking at the section 8 program, oh and guaranteed rent.
Well, I'll offer some friendly advice:

Decisions made from desperation are rarely sound. A sec 8 tenant can easily do more damage to your home that the above-market rent will cover. In fact, I'd be surprised if that didn't happen. If you want more info, call around Atlanta and talk to some property managers who handle good, quality properties. Ask if they accept sec 8 tenants, and take note of what you are told after they tell you "no, we don't".

If you are living on a tight budget, becoming a landlord is an extremely risky financial move. Very, very risky. You can get hit at any time with unexpected vacancy and/or expensive repairs. Worse, your house could be trashed and you don't have the money to fix it up and rent it out again. If such circumstances would bring financial disaster to your life, do not become a landlord, and especially do not become a section 8 landlord.

Finding a roommate sounds like your least risky move if you have extra space in your house and are looking for additional income.

Good Luck
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Old 09-02-2008, 07:32 PM
 
171 posts, read 458,141 times
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Quote:
Originally Posted by austin-steve View Post
Well, I'll offer some friendly advice:

Decisions made from desperation are rarely sound. A sec 8 tenant can easily do more damage to your home that the above-market rent will cover. In fact, I'd be surprised if that didn't happen. If you want more info, call around Atlanta and talk to some property managers who handle good, quality properties. Ask if they accept sec 8 tenants, and take note of what you are told after they tell you "no, we don't".

If you are living on a tight budget, becoming a landlord is an extremely risky financial move. Very, very risky. You can get hit at any time with unexpected vacancy and/or expensive repairs. Worse, your house could be trashed and you don't have the money to fix it up and rent it out again. If such circumstances would bring financial disaster to your life, do not become a landlord, and especially do not become a section 8 landlord.

Finding a roommate sounds like your least risky move if you have extra space in your house and are looking for additional income.

Good Luck
I 100% agree with the above poster. It depends on who you accept as tenant under section 8 program and how well you checked their background. But if you're already short on cash you're best bet is finding responsible and quiet professional roommates, not some college student. My 2 cents.
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Old 09-02-2008, 08:28 PM
 
11,853 posts, read 10,905,255 times
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Wow, I can't believe you are going to trash a 2004 home... I have seen Section 8 renters and I have yet to see one that has a "clean" home... I suppose since it is technically, not their home, they treat it as such... Just be forewarned, you may get 24k a year but they may damage your home 50k a year or maybe even torch the place on accident or steal your copper and appliances when they are evicted... that $900 security won't even pay for the new fridge or the mold infestation everywhere... but its your choice... I just hope it doesn't turn out bad but I am not holding my breath...
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