RentPrep Podcast #363

In this week’s episode, Podcast Host, Andrew Schultz, goes over Section 8 inspections and what it means for landlords, including what to do if a Section 8 inspection fails.

If you’re starting to reign in the rental applications, you might come across some potential tenants that are staying in the U.S. using a Visa. Discover what to look for when sorting through international applicants.

Last, but not least, one landlord tells the story of what could have been a really bad tenant experience had they not done their due diligence tenant screening. Listen in now.

Subscribe: Apple Podcasts | Android | Stitcher

Join our Facebook Group of over 10,000 landlords and property managers.

Can you do us a solid?

Our podcast has grown over the years because of listeners like yourself. One way you can help us grow further is by leaving us a review of our podcast. It will only take a minute and you can find detailed instructions by clicking here.

Resources Mentioned on this Episode:

Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 363, and I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about what to do when tenants won’t comply with section eight, repairs screening and renting to international applicants, and the critical importance of properly screening tenants. We’ll get to all that right after this.

Voice Over: (00:23)
Welcome to the Rent Prep for Landlords podcast. Now your host Andrew Schultz.

Andrew Schultz: (00:28)
Before we jump into today’s episode, don’t forget to check out the Rent Prep for Landlords Facebook group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with over 12,500 members, chances are someone in the group has been there before and can lend a helping hand if you haven’t checked it out yet, do it today. Over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us

Voice Over: (01:00)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:07)
So what do you do when you have a tenant that just will not comply with a necessary repair? What do you do when that tenant is also on the section eight program and their non-compliance means that you’re going to lose the voucher. Let’s go ahead and jump into this week’s forum quorum. My tenants are participants of the section eight program and their apartment failed the yearly inspection because of a cockroach infestation. I’m going to be paying $500 to have the whole building treated. And the pest control company stated that the units need to be empty for two hours. Following the treatment because of the chemicals used the tenant comes up to me today and says that they can’t leave as they have nowhere to go. And they have three cats. If they don’t comply, they can lose their rental subsidy. The place needs to be treated by a licensed contractor in order to pass the inspection.

Andrew Schultz: (01:49)
What are my options here? So these situations can be very, very complicated, but simply put your tenant needs to find a place to stay with her cats for a few hours. If she wants to continue renting from you and receiving this rental subsidy, they’re not going to pass the unit without the unit being treated. And I’m sure that this tenant does not want to live with roaches crawling all over their place. As far as how to work with a tenant, I think this one boils down to clear communication with the tenant, that if they don’t comply with this and you can’t get in to do this treatment for these roaches, that they’re going to lose their rental subsidy and possibly even their voucher altogether, depending on how the section eight agency handles it. And they will eventually the section eight agencies will pull a voucher.

Andrew Schultz: (02:30)
It sometimes takes time. Sometimes there’s got to be multiple occurrences of non-compliance before they’ll do it, but eventually, section eight will pull a voucher from someone if they’re not staying in compliance with the requirements of the program if you will. Anyway, at that point, they would be responsible for all of the rent which they’re most likely not going to be able to pay. And then the tenants going to have to move permanently and not just for a couple of hours. So if you can find a way of explaining that to the tenant, I think that you’ll have a way of getting through in one way or form when they realize a couple of hours is a lot better than moving permanently, because nobody wants to move. You can also contact the caseworker at section eight to let them know that the tenant is being non-compliant.

Andrew Schultz: (03:11)
And see if the caseworker can try talking to the tenant as well. The caseworker might have a little bit more leverage than you do because they can tell the tenant the same thing. But when they are the ones who have the ability to pull a voucher, it might come with a little bit more, I guess, authority is the best term to use there when it’s coming from the caseworker directly and they have that ability. So that might be an option. You might want to try talking to the caseworker and see if the caseworker can help. If you are not able to treat the unit, eventually what’s going to happen is the unit goes into a rent abatement period for usually 30 to 60 days. And then that tenant subsidy is going to wind up ending. So really it’s not in anyone’s best interest to not complete the treatment plan here.

Andrew Schultz: (03:51)
It’s also worth noting that one treatment is typically not going to be enough to kill roaches. And that’s something that you need to keep in mind. You’re likely going to be looking at multiple treatments. And when I say likely, I mean, you will be looking at multiple treatments a few weeks apart to completely eliminate this issue. And that’s, if it’s not a particularly bad infestation, if it’s a really bad infestation, you may need to vacate the unit altogether, regardless, just so that you can get aggressive with treatments. I’m talking about removing appliances, pulling carpets, pulling outlet covers to check, you know, whatever it takes. Sometimes units get so far infested that you really have to get aggressive with the treatment. It’s sometimes it’s a very, very nasty situation, but it doesn’t sound like this one is quite to that stage yet. Hopefully. the best advice I can offer with regards to the actual Roach treatment is to be as aggressive with the treatment as possible and to keep going until they eradicated completely, or they will come back.

Andrew Schultz: (04:45)
Roaches will lay eggs that may not be impacted by the poisons that killed the living ones. So now you have a whole new group that’s about to hatch. And if you’re not treating them with some sort of a poison, they’re going to lay eggs and the whole cycle is just going to continue to repeat itself. So you really have to be aggressive with the treatment and you definitely need to keep going until they’re eradicated completely. If you don’t want the Roach situation to come back, this is a tough one though. It’s, it’s always difficult when you have a tenant that for whatever reason, doesn’t want to give you access to the unit in order to do the work that you need to do to ensure that they get to continue to live in a safe and clean environment. It’s one of those situations that you’ll find a way to work through it.

Andrew Schultz: (05:24)
You’re just going to have to possibly push the tunnel a little bit more outside their comfort zone or whatever the case may be. Definitely don’t ignore the situation. If you ignore the situation. Number one, the Roach infestation is going to get so much worse. In addition to all that, obviously you’re going to have to deal with the subsidy ending and then trying to get that tenant out and all of the associated things that go along with that. So work on this diligently. And I think that you’ll come to a solution. I think that once you have a conversation with the tenant here and really explained to them, look, this is best for everybody involved because a, B, C, D E here’s all the things that could happen if we don’t do this treatment ABCD E I think that the tenant will have enough common sense at that point to be able to say, all right, I need to find someplace to go for a couple of hours with my cats. Honestly, they don’t even have to leave the property. They can stay outside the property. You know, if they have a lawn chair and a couple of cat carriers for a two-hour period of time, I think that’s something that would even be doable. So, you know, it is something to keep in mind. There are options out there but good luck to you on this one. And hopefully, you’re able to get that situation remediated.

Voice Over: (06:26)
Water cooler wisdom, expert advice from real estate pros.

Andrew Schultz: (06:34)
This week’s water cooler wisdom is actually a topic that we don’t get to talk about too much. It’s a pretty infrequent thing for us to in common here in property management land at least where we’re at in Buffalo, it may be more common than other areas, but let’s go ahead and jump right in here. I showed a house today to a couple who said that they’ve only been in the United States for two days. They’re here from a country in South America and they have 18-month visas. I’ve never had the opportunity to rent from anyone who wasn’t a us citizen. What, if anything, do you do differently to verify income, credit, and background? I usually use Zillow to process this information, but I’m guessing that because they aren’t from the United States, I will not get much. If any information on the report, what services do you use in this situation?

Andrew Schultz: (07:17)
This is a really good one. And like I had said at the onset, this is something that doesn’t get nearly enough discussion. And it’s something that we really should talk about. More screening someone from outside the country can be a huge challenge. It’s not typically something that we have to do regularly. So a lot of times it takes us a minute to kind of remember the process of going through and screening and international applicant. When they come in and are looking to run an apartment, you also have to put yourselves in the shoes of the applicant in this situation, it’s an unfamiliar process in a brand new country. They’re being asked for a ton of personal information. They have to trust the person that they’re giving the information true. And then they have to trust that they’re making a good choice in renting from that person in a new country where they may know maybe a few people, maybe they don’t know anybody.

Andrew Schultz: (08:03)
So as much as it’s uncommon for us to have to screen someone from another country, it’s definitely an adjustment on the end of the applicant as well. So most of my experience in this area comes from screening international students for apartments. When we had some properties that we manage near one of the local college campuses and our guidelines were pretty straightforward. International students engaged in a program in the United States had to provide their affidavit of support, either their bank account statement or their sponsors’ bank account statement, a photocopy of their passport showing their photo page, and their biological information photocopy of their most recent us visa, photocopy of their [inaudible] forms, photocopy of their most recent us port of entry stamp and a photocopy of the current and all previous [inaudible] forms or changes of status approval. And for students, we also require a here in the United States that meets all of our application criteria for a co-signer.

Andrew Schultz: (08:59)
So there would actually be two applications here and not just one if it was a typical student visa. So we do ask for a lot. And there’s a lot of things that you have to look at when you’re dealing with international students so that you can understand, okay, they are here, they are a student, they have a student visa, their visa extends through the end of their program or whatever they have support. And that’s where you need to look at that affidavit of support because that’s actually the paperwork that indicates, you know, who’s financially responsible for the students. There’s a lot of things that you have to look at when you’re screening an international student. In this instance, it doesn’t sound like it would be an international student. It sounds like it’s someone who has moved here for working in the United States. And there’s a little bit different requirements for that.

Andrew Schultz: (09:41)
As a, for instance, as opposed to a student visa, you would be looking for a visa that would allow that person to work in the United States and things of that nature. The other thing that I would be looking for, if it was a normal wage earner versus a student, I would be looking for an offer letter of employment in lieu of the affidavit of support the student visa, the co-signer things like that. There should still be the visa. They should have their working visa, not a student visa. But going back to the offer letter, the offer letter needs to be on official company letterhead of the employer. The letter should have a date that the offer was extended. It should tell you when that person is starting employment and what the base income is going to be for that person in that position.

Andrew Schultz: (10:21)
Then we take that letter and we do validate that with the employer, we will actually contact the employer’s HR department or try to contact whoever’s listed on the letter to verify it, but we’ll always go through the main company number. We never use, you know, a number that might be listed on the application, or I’m sorry, on the letter, we’ll actually call the company directly rather than call the number that’s on the letter and try to get to the person that way so that we can cut down on fake letters of reference and things of that nature. So there are ways to screen around stuff like that. And it’s important to know that. So there is another thing to keep in mind here and that’s that you will not have a credit check or a background check more than likely. Even if they have a social security number or an ITI, an individual taxpayer identification number, there’s not going to be any history attached to it.

Andrew Schultz: (11:07)
If they’ve only been in the country for two days, you’re not going to have a landlord reference. You’re not going to have a payment history. There won’t be a credit there won’t be a criminal background attached to it. And that’s something that you have to take into account that you do have some blind spots when you’re screening those people. So that’s something that you need to keep in mind with every tenant placement that you make. There’s always going to be a certain amount of risk, and you have to choose your written criteria in such a way that you find a risk balance that works for you essentially, and make sure that your criteria are fair housing compliant at the same time. But when you set your criteria, that’s basically how you’re deciding how much risk you’re willing to tolerate based off of your criteria.

Andrew Schultz: (11:50)
And then following your criteria every time and not deviating from your criteria. When you start deviating from your criteria, it means that maybe you should be looking at what your criteria are and why you have them set that way. Because it sounds like you are looking at a higher risk profile than what you think that you’re looking at. So something to keep in mind when you’re screening somebody, there’s always going to be some risk in every tenant placement, but you really have to decide how much risk you’re willing to tolerate. And that should be kind of how you build your written rental criteria. It’s all stuff that needs to go into that consideration. A few other options that you might want to consider here, depending on the legalities in your state or in your area, you might be able to do something like an additional prepaid rent or an additional security deposit.

Andrew Schultz: (12:33)
Again, you have to double-check to make sure that’s allowed in your area. For instance, in the state of New York, you can only have one month of rent in security deposit or in prepaid rent. So you would not be able to take like a year of rent upfront or something like that, or six months of rent, whatever the case may be. You can’t do that here in the state of New York. Other states, you do still have that ability. So that might be something that works out as well. Something to keep in mind, if you do go that route with the additional prepaid rent or some sort of an additional deposit is what sort of issues will this present. If you wind up in a situation where you have to evict this person, you know, we talked about this a little bit in our last episode, and it comes up again here as well.

Andrew Schultz: (13:15)
You are holding a large sum of prepaid rent for somebody. Are you going to be required to refund that if you try to evict them, can you evict them right now due to the various moratoriums that are in place? Do you have the money to prepay or to repay that tenant, or did you turn around and spend the money instead of putting it into an escrow account, like you were supposed to, you know, there’s a lot of different things here that could become challenges down the road. The best advice I have here is to be cautious, be fair, follow your written criteria and understand that there’s going to be risk with every tenant placement. You just have to decide how much risk you’re willing to tolerate with your rental portfolio

Voice Over: (13:54)
Feet on the street, real stories from real property managers.

Andrew Schultz: (14:02)
So what do you do when you have a tenant that just will not comply with a necessary repair? What do you do when that tenant is also on the section eight program and their non-compliance means that you’re going to lose the voucher. Let’s go ahead and jump into this week’s forum quorum. My tenants are participants of the section eight program and their apartment failed the yearly inspection because of a cockroach infestation. I’m going to be paying $500 to have the whole building treated. And the pest control company stated that the units need to be empty for two hours. Following the treatment because of the chemicals used the tenant comes up to me today and says that they can’t leave as they have nowhere to go. And they have three cats. If they don’t comply, they can lose their rental subsidy. The place needs to be treated by a licensed contractor in order to pass the inspection.

Andrew Schultz: (14:45)
What are my options here? So these situations can be very, very complicated, but simply put your tenant needs, find a place to stay with her cats for a few hours. If she wants to continue renting from you and receiving this rental subsidy, they’re not going to pass the unit without the unit being treated. And I’m sure that this tenant does not want to live with roaches crawling all over their place. As far as how to work with a tenant, I think this one boils down to clear communication with a tenant that if they don’t comply with this and you can’t get in to do this treatment for these roaches, that they’re going to lose their rental subsidy and possibly even their voucher altogether, depending on how the section eight agency handles it. And they will eventually the section eight agencies will pull a voucher.

Andrew Schultz: (15:24)
It sometimes takes time. Sometimes there’s got to be multiple occurrences of non-compliance before they’ll do it, but eventually, section eight will pull a voucher from someone if they’re not staying in compliance with the requirements of the program if you will. Anyway, at that point, they would be responsible for all of the rent which they’re most likely not going to be able to pay. And then the tenants going to have to move permanently and not just for a couple of hours. So if you can find a way of explaining that to the tenant, I think that you’ll have a way of getting through in one way, shape, or form when they realize a couple of hours is a lot better than moving permanently, because nobody wants to move. You can also contact the caseworker at section eight to let them know that the tenant is being non-compliant.

Andrew Schultz: (16:05)
And see if the caseworker can try talking to the tenant as well. The caseworker might have a little bit more leverage than you do because they can tell the tenant the same thing. But when they are the ones who have the ability to pull a voucher, it might come with a little bit more, I guess, authority is the best term to use there when it’s coming from the caseworker directly. And they have that ability. So that might be an option. You might want to try talking to the caseworker and see if the caseworker can help. If you are not able to treat the unit, eventually what’s going to happen is the unit goes into a rent abatement period for usually 30 to 60 days. And then that tenant subsidy is going to wind up ending. So really it’s not in anyone’s best interest to not complete the treatment plan here.

Andrew Schultz: (16:44)
It’s also worth noting that one treatment is typically not going to be enough to kill roaches. And that’s something that you need to keep in mind. You’re likely going to be looking at multiple treatments. And when I say likely, I mean, you will be looking at multiple treatments a few weeks apart to completely eliminate this issue. And that’s, if it’s not a particularly bad infestation, if it’s a really bad infestation, you may need to vacate the unit altogether, regardless, just so that you can get aggressive with treatments. I’m talking about removing appliances, pulling carpets, pulling outlet covers to check, you know, whatever it takes. Sometimes units get so far infested that you really have to get aggressive with the treatment. It’s sometimes it’s a very, very nasty situation, but it doesn’t sound like this one is quite to that stage yet. Hopefully. the best advice I can offer with regards to the actual Roach treatment is to be as aggressive with the treatment as possible and to keep going until they eradicated completely, or they will come back.

Andrew Schultz: (17:38)
Roaches will lay eggs that may not be impacted by the poisons that killed the living ones. So now you have a whole new group that’s about to hatch. And if you’re not treating them with some sort of a poison, they’re going to lay eggs and the whole cycle is just going to continue to repeat itself. So you really have to be aggressive with the treatment and you definitely need to keep going until they’re eradicated completely. If you don’t want the road situation to come back, this is a tough one though. It’s, it’s always difficult when you have a tenant that for whatever reason, doesn’t want to give you access to the unit in order to do the work that you need to do to ensure that they get to continue to live in a safe and clean environment. It’s one of those situations that you’ll find a way to work through it.

Andrew Schultz: (18:17)
You’re just going to have to possibly push the ton of a little bit more outside their comfort zone or whatever the case may be. Definitely don’t ignore the situation. If you ignore the situation. Number one, the Roach infestation is going to get so much worse. In addition to all that, obviously you’re going to have to deal with the subsidy ending and then trying to get that tenant out and all of the associated things that go along with that. So work on this diligently. And I think that you’ll come to a solution. I think that once you have a conversation with the tenant here and really explained to them, look, this is best for everybody involved because a, B, C, D E here’s all the things that could happen. If we don’t do this treatment, a, B, C, D E. I think that the tenant will have enough common sense at that point to be able to say, all right, I need to find someplace to go for a couple of hours with my cats.

Andrew Schultz: (19:00)
Honestly, they don’t even have to leave the property. They can stay outside the property. You know, if they have a lawn chair and a couple of cat carriers for a two-hour period of time, I think that’s something that would even be doable. So, you know, it is something to keep in mind. There are options out there, but good luck to you on this one. And hopefully, you’re able to get that situation. Remediated renting out rooms is definitely a thing. Check out rent preps, latest guide on how to make the most out of those vacant rooms in your rental property, by visiting rentprep.com/blog today, and learn more about house hacking that pretty much wraps things up for this week’s episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to investment real estate, and you can help us to reach our goal.

Andrew Schultz: (19:46)
If you heard anything in this week’s episode or any other episode that will help someone, you know, do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on. We’ve just launched a free investment property deal analyzer, which is available on that site. whatsdrewupto.com. It’s truly free, no-obligation whatsoever. And there’s also a companion video to show you how I analyze deals and how to use our analyzing tool. If you’re looking for top-tier tenant screening services, how dot over to red prep.com, there are multiple products to choose from including a tenant-paid option. And if you’re over 50 doors ask about our enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t want to miss until then. I’m Andrew Schultz with ownbuffalo.com for rentprep.com. And we’ll talk to you soon.

(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='cd5d6d686713b824b92ffe33725238bc66e6e85c2661615aecf9405b7085006c';v.parentNode.insertBefore(j,v)})(window,document,'script','//load.sumo.com/'); (function(d, src, c) { var t=d.scripts[d.scripts.length - 1],s=d.createElement('script');s.id='la_x2s6df8d';s.async=true;s.src=src;s.onload=s.onreadystatechange=function(){var rs=this.readyState;if(rs&&(rs!='complete')&&(rs!='loaded')){return;}c(this);};t.parentElement.insertBefore(s,t.nextSibling);})(document, 'https://rentprep.ladesk.com/scripts/track.js', function(e){ LiveAgent.createButton('20edc119', e); });