Problem Section 8

I bet you think that someone on Section 8 simply gets their rent paid for them – do you think that? That’s what I thought. Ha!

From what I understand, this works slightly differently in each municipality, but let me tell you of my recent experience Lima, Ohio. If you have read my article from a few weeks back entitled Why Real Estate Investing May Not Be a Good Business in 10 Years, then you know that I recently approved a rental application of someone who receives housing assistance (I’ve since signed a lease with this tenant).

As I told you in the previous article this woman works full-time and earns $1,300/month. She had been living in, for lack of a better word, a dump, but had recently qualified for assistance which enabled her to apply for a unit that she deems more conducive to raising her daughter in – my unit.

When she called and told me she is qualified for housing assistance in the amount of up to $635, I assumed that they would pay her entire rent up to that amount. It sort of made sense to me because if you add her income of $1,300/month to this subsidy you end up with an amount which is roughly 3 x the rent. My rental guidelines stipulate gross income of at least 3 x rent so I erroneously made an assumption that this is how the government structures this program…

Not Even Close

In actuality, the requirement as part of this program is that the tenant spend 30% of their gross income toward their housing, which means that somebody grossing $1,300/month is held responsible for $390/month of rent. Now, …read more