The moment I dreaded for years came like a freight train this past summer.

For someone who became an accidental landlord the idea of switching tenants, renovating a property to turn it around ASAP, finding a new tenant and covering expenses without rent coming in can be simply terrifying and overwhelming.
This past summer as the kids were playing outside silhouetted by beautiful sunset I received the dreaded call. It wasn’t a leaky faucet or AC this time. My tenant was calling me to tell me that she couldn’t afford the rent anymore.
This was quite a surprise because I had not raised the rent for 46 months, but according to her she couldn’t afford my rent and she was moving. She didn’t want to sign any termination letter until she secured something and I agreed to give her a week. After all, she had been a great tenant, I thought. 
One week turned into two, and at the end of that second week, I had to tell her she would have to be responsible for another month of rent because I also needed some time to find a new tenant.
One day later, she changes her mind and decides she wants to stay with me until the spring of 2020. Apparently she was unable to find anything because her newly-wed husband has an eviction on his record. According to her, the eviction was not really his. He was living with his wife and 4+ kids, they got in a fight and he left. His wife found a different man but they didn’t continue paying rent and got evicted.
At this time I am thinking to myself  that the eviction is the least of my concerns, but rather, this guy walked out of his kids’ lives like nothing. Meanwhile, my tenant must think that she is a great catch taht would make the guy stick around to help her raise her own 4 kids. Crazy!!!

Through all these years, well 3 1/2, we have been up and down with our rental bank account. Before starting looking into the idea of financial independence and exploiting the concept of frugality we were at the mercy of different storms of expenses. However, once that we started setting up certain financial goals and educating ourselves about our finances, we realized that $500 in monthly cashflow was not bad for our rental but a hefty emergency fund was necessary to survive a vacancy, tenant damages and renovations.

So, we set off to build a decent fund. By the time that my tenant called me with her plan our account was not quite there( close to 6k) but we had about just enough to withstand switching tenants and a vacant month. Hence, when changed her mind and wanted to backpedal to stay with me I took it as an opportunity; sometimes you need that push to jump off the cliff. It wasn’t just because I wanted them out, but she had already said they couldn’t afford rent. Besides, I was noticing that the property was starting to deteriorate as a result of negligence. Lots of carpet stains from coffee spills and another beverages. The negligence kills me though! One time I asked her about a stain and she candidly responded: “we just didn’t get around to clean it.” WTF!!!!!
Besides from the damages, the new guy she married and not being able to afford rent there was also the fact that I was charging the same rent from three years back. Market value comps in my area suggested an increase of about 26%. I needed that! Taxes had crept in and the $500 cashflow was reduced to only $300.

Being a landlord for the Section 8 program

In case you don’t know, Section 8 is the government program that helps families in need with housing. In a nutshell, the way it works is by giving participants subsidy, many times referred to as a voucher, based on their income. The more you make the more you pay and the less you earn the more subsidy you receive. It also depends on the number of dependents you may have.

Why do I rent t section 8?

Plain and simple because I don’t get one phone call that is not Section 8. When we first started renting our property I refused to accept any Section 8 participants afraid of all the horror stories ( In my county you can decline Section 8). Although, it is easy for participants to not qualify as renters because usually their financial situation sends a quick alert to any background or credit check service.
On the other hand, when we started it was our way out of the neighborhood that had rapidly declined after the financial cataclysm of 2008.
We started being picky about who to rent to but once we found the house and neighborhood we wanted we had to move quick. We had to get someone in there and without knowing much about the numbers to operate a rental, $500 in cash-flow monthly seemed manageable.
I was able to pull a contract from the internet and before I knew it I was tumbling down the pipe to become a Section 8 landlord.
The first 6 months were nerve-wrecking but the rent was always there on time, so I couldn’t complain; until the end.

What I wish I knew about Section 8

First of all, I have to say that it is not as bad as people make it seem. It really depends on the tenant you are working with. I have heard worse stories about non-section 8 -renters. You have to screen your tenant and get a feel for what kind of people you are dealing with. Poor or rich, I am sure you agree that you can find people are pieces of s*** in both groups. I have heard many stories of people not renting through Section 8 and destroying properties terribly. They get pissed and feel they are being taken advantage of and, of course, the only way to get back to the landlord is by trashing the place.
On the financial aspect, Section 8 can be terrific. The money will always be there with the exception of the tenant’s portion that you’ll have to collect. Getting that portion of the money will depend directly on the quality of the tenant you have chosen.
The one thing that sucked for me but I blame it on my ignorance and lack of understanding the navigation of the program, is that I was stuck with the same rent for years.

Why?
Well, not even a year after Trump got into office they started cutting funds for the Section 8 program. With that came a moratorium for landlords that prohibited the rent of current tenants to be increased. I thought that I was stuck with the same rent regardless if the tenant was the same or not. I thought I could not raise the rent. Period! I didn’t quite understand that my contract was a year contract though and after that, it turns into a month to month contract. The only requirement was a 30-day notice to the tenant.

When my tenant called me saying she was moving, she mentioned that she was able to get out of the contract as long as she gave me a 30-day notice. That prompted me to ask a lot of questions to my tenant’s section 8 case manager and was able to clarify a lot of things that I didn’t quite understand before.
For example, I didn’t know that if I really wanted to increase my rent all I had to do was wait out the firs year, get the tenant out and get a different one. You may be asking why to get rid of the tenant if it’s a good tenant? Well, because they would not give more money or a larger voucher to a tenant to stay with the same landlord. However, if the tenant goes  somewhere else the voucher amount is adjusted to market value; usually Section 8 follows the criteria of the Small Area Fair Market Rents to adjust the money amount given to their participants. Fair or not, that is the way it works.

Sometimes, of course, it is worth it sacrificing a little bit of money for the comfort of knowing that your rent will be there and that your tenant won’t let you down. That was a bit of my situation too. I didn’t care so much about making a killing in rent as I just wanted to make sure I didn’t have the property vacant. I was afraid of not being able to have the funds to go through the process of switching tenants.

A nice tenant turned into a dragon

Well, needless to say, trust nobody! I think I did fairly a good job screening my first tenant. But I did a terrible job allowing someone else moving in with her and being added to the lease. I can’t be sure( I am speculating) about this and I really give a crap… but I am convinced that the man my tenant married wrecked her finances. I should have screened the guy with a background check and credit report. You can’t expect a credit score of 700+ but a credit report it’s really a window to look into the character and level of responsibility an individual has. Do they have debt? Most likely. Are they making payments? Maybe. Do they have a victim story for everything in their report? Possibly. I personally feel that when there is a story for every blemish in the credit report, most likely than not they will include me in their story once we are done doing business. I do believe that we can all be down on our luck at some point, but when it’s all about “it’s not my fault, they are blaming me for something I didn’t do, etc” I move on and far away as soon as possible.

My tenant went from being reasonable and understanding to “you had a plan to get me and my family out.” The scary part of dealing with people who are under desperation and financial pressure that jeopardizes their family stability is that they are capable of anything, and the only thing they have to get back you as a landlord is by trashing the property.
My property wasn’t purposefully trashed; I don’t think. But my tenant was simply negligent in many regards that took a huge toll on her security deposit. I think that I did a pretty good job negotiating her situation, making her understand that all the shit happening in her life was not my fault and that I was nothing but flexible and accommodating to her needs. I never lost my cool, and she really pressed my buttons. 
There is always that feeling and animosity towards landlords of  “you are putting me and my family on the street, you a jerk. You have so much money and you are hurting us.” You know, the victim story. As if I had chosen to take my family to Disney for a week and honeymoon in the Bahamas even when I don’t have money for rent! So freaking crazy! That’s what my tenant did.
**If you are receiving the benefit of Section 8 and you find yourself reading this post, please take advantage of the benefit to secure your tomorrow. Don’t blow the fucking money on crap and expensive trips; don’t be an idiot**

Slay the fucking dragon!!

So I quickly realized that my tenant was trying to use some intimidation by telling me that I should be aware of how some people simply destroys properties when they are not pleased or when landlords get them out.
I could not just park it outside of the house to watch what they were up to, but what I was able to do was to bring a “potential tenant” every week on their last 30 days. That’s right. I would show the property to friends, and potential tenants so that I would keep popping in at least weekly.
At first, she objected making it difficult and going as far as to tell me she didnt’ feel comfortable letting me in her home. What that fuck!!! Until finally I had to tell her that my only obligation with her was a 24 hour notice. That was my gently way of telling her “go screw yourself!” She was rather unpleasant the few times I visited but I was able to assess damages and more importantly check if they were moving out or not.
Going into the last month she wanted to play the “I don’t have the rent for next month” card. She wanted to use the security deposit as the last month rent, which I said absolutely not. You never do that. My response to her was very clear, “if you don’t have the money on the first of the month this all out of my hands and my lawyer will handle it; he is ready to file for eviction, but I really don’t want to do that to you and your family. You know how hard it is to find a place with an eviction in your record. Please don’t do this to your kids. Make sure you have the money on the first.” She had it.
In regard to possible damages to the property, my response was also straight forward “my insurance will cover anything exceeding the security deposit. However, if I notice any damage caused on purpose I will file a police report and I can assure you that nobody will ever rent to you, not to mention that you will lose your Section 8 benefit.”

I don’t like be a dick but it does bother me when people think that they can use their street smart shit to push you around.

Where am I at now?

Well, the property was completely renovated. Was it a pain in the ass? Yes.
I spent about 40 hours of work and roundabout $2,600 replacing all the trashed carpet, retouching paint, trim, replacing a vanity and blinds, plus doing some major cleaning.

The worst was a tile floor that was so bad that we had to buffer it with a Dremel tool. It had some sort of wax or hair product mixed with filth sedimented to the tile. Disgusting! Needless to say, I kept her security deposit. I am debating if I should contact her to try to arrange payment, which I am sure won’t happen, and then proceed with a collection agency; just to make sure it goes on her record. She really pissed me off towards the end!
I can’t stand the victim attitude she was trying to use to manipulate me.
The property was up and running in two weeks and I just got a new tenant. The cash flow went from $366 to $766. We needed this increase badly!

New Procedures

I made my contract tighter. More specific language about my right to get into the property with just a 24-hour notice. I am including a check-out list of procedures at the moment of signing the lease. Tenant has to read it and sign it, so it’s clear what my expectations are at the moment of moving out. I adjusted my late fees, and more importantly, I front-loaded my tenant with “this deal is not forever. At some point, you will move on, or I might need you out of the property. I am nice and I will be there when you need me but this is a business not a charity organization. I need my money on time.”
If there is anybody new joining the family on the lease they need to pay for a criminal background check and credit report, and there is not guaranteed that I will continue renting to them upon receiving the report.

Tools every landlord and techniques must use!

You need the right tool for the job, they say. Well, the one tool that saved me tons of time and it is well worth the $18 it cost me, is… drum roll!!
The Ridgid Miter Trim Cutter. This tool is like a set of pliers with different angles to snap the quarter round trim that goes along the perimeter of every room where you might install new flooring. Using this tool that I first hesitated to buy allowed me to cut the trim for three rooms, a hallway and a living room in almost two hours. It is absolutely a must!

An air compressor comes also handy to attach the trim to the baseboard. I have been using the Home Depot Porter Cable combo that comes with three guns and a stapler and no disappointment yet.

Last but not least, in the paint department, it is worth mentioning that the fewer colors you have around your rental house the better. Since our rental was initially our home we had quite a few color combinations. It could be simpler, but it is not a problem thanks to a little bit of planning. Every time I used a different color I took a picture of the barcode with the color formula on top of the can or container. Thanks to that, every time I want to retouch the walls I just get myself a $2.99 sample. I bring a picture of the color label, which now I have saved in my Google drive, and the Home Depot associate makes it right there for me. Rather than painting the whole house I just go around retouching the walls with some Dollar Tree brushes and I get the job done for easily under $50.

This has been a long post, but I don’t get to write that often because I am so extremely busy with the kids. Nonetheless, I wanted to share my landlord experience with others. Hopefully, you pick up a couple of ideas here that may serve you on your journey of real estate investing.
I am not a super experienced investor or claim to be one. I am just a regular Joe who is trying t make those dollars go the farthest so that I can reach my financial independence relatively early.
If you have any tip or comment I would love to hear it. All points are always well taken.