Pros and Cons of Section 8

[cooley5]

Does anyone have strong feelings about Section 8, good or bad?  I feel that if I don't sign up I'm missing a pool of tenants.  But I also have reservations about letting people in that can't afford it without subsidy from Uncle Sam,  It almost makes me feel that I am paying myself the rent through taxes...

Anyways comments would be most appreciated.

Jeff

[Foreclosure Negotiator]

I have mixed feelings on section 8. 

The only good thing I have to say about them is that 85% of the time I get paid what I'm supposed to each month.  This is a much higher percentage than that of non section 8 tenants. 

There have been other threads on this topic, search my previous posts or use the search feature at the top.  I know there was good info posted from both sides. 

I think in the end it depends on your market.  The Section 8 in Cleveland, OH is a complete nightmare while other section 8 locations around the country are liked by the landlords. 


GooD Luck!   

[reiauctions]

Yes, it definitely depends on your area since section 8 can be managed differently.  I'd talk to some landlords in your area who offer section 8 and find out from them.

[Hugh0997]

section 8 in MA can be a nightmare.  My father rents a condo out like that.  Yes he gets rent each month but when they stop paying there share its almost like they were lawyers.  I think you really need to be firm with them about the living arrangements.  Every time my father has someone else moving in to the unit who isnt on the lease.  I guess its all in the screening because my brother had section 8 and they were great for 5 years.  They just saved up enough $$$ to buy a place of there own.  Great system isnt it???

[tatertot]

My local HA are a bunch of weasels, so I would prefer to not do business with them.

It's a mote point, anyway, becasue I do month to month, so Section 8 won't approve my houses.

Not that they would, anyway. They insist that all trees be cut back so there is 10 feet of clearance from the house. It'll be a cold day you-know-where before I cut down my valuable trees just so some drug addict and her boyfriend(s) can live for free.

[propertymanager]

I have had a very good experience with Section 8.  I think it's important to get to know the people at Section 8.  Meet the case workers and the head of the local Section 8 office.  Try to build a good working relationship with them. 

In my experience, Section 8 tenants are no different than any other low income tenants.

Tatertot,

Have you asked Section 8 about doing a month to month lease.  I have done month to month leases with Section 8 tenants even during their first year.  Section 8 will require the tenant to commit for a year but won't require you to keep them a year. 

Mike

[phlemboy]

I've heard horror stories of Section 8 tenants. Can you legally deny Section 8 tenants? Most people who require Section 8 will have credit or income limitations that would cause reason for denial. I like the idea of getting your money on time each month, but I feel there are too many people who feel the world owes them a living. They abuse the assisstance they're given and look at it as a way of life. I'm more concerned with the way they treat an apartment than anything else. If I could be assured that they'll not wreck my property, I'd feel much better about renting to Section 8.

[tatertot]

Mike, why on earth would I want to ask Section 8 if they will let me do month to month? One of the reasons I do month to month is that it gives me a good legal reason to tell the Section 8 applicants to get lost.

[abinvestments]

It's a crap shoot.  I had a pretty good experience with my 1st Sec 8 tenant.  I'm in IL.  Her portion of the $900 rent was only $19 and at times I had to get it from her dad, but he lived around the corner so it was not a problem.  She wasn't really a problem tenant.  No late night calls for silly stuff.  No issues with the other tenants.  Kids were ok.  When she left, she left the place clean.  Funny, I had more problem with the non-Sec 8 tenant. 

Then the next govt assisted tenant I got was a nightmare.  Had a long vacancy and got desperate.  Didn't properly screen.  Well, actually I did.  I saw kind of red flags (bad ref#'s, didn't talk to PREVIOUS landlord), but overlooked them because I needed it rented.  I know, I know.  Hey, it was my first rental and I know that was my mistake.  I look at it now as a well paid for lesson.  So screen and then screen again and don't get desperate.

[BryanC512]

Pros and cons...  most of you are talking about your personal experiences, which has absolutely no baring on what the next landlord can expect (I'll list my PERSONAL feelings at the end).  Let's talk more specifically about the good and the bad of section 8....

Pros:
1) You will have a TON of people who want to rent your house calling you.  100's of calls a week atleast. 
2) They will guarantee a portion of the rent.  This is a good thing, cause when you deal with properties in some of the more crime ridden areas, which are very hard to rent to 'qualified' tenants, this will assure you you're gunna get atleast part of your rent
3) If your tenants leave owing you RENT (not late fees, not damages, not utilities), they'll be kicked off the section 8 program until they pay you what's due.

Cons:
1) If your tenants don't pay their portion, and you complain to section 8, they will be kicked off the section 8 program, so you will no longer recieve your guaranteed portion of the rent, plus you'll have to go through the expense of getting them evicted.
2) Section 8 does not care about any damages the tenant does, or any late fees or utilities they owe.  These are your probelm
3) YOUR contract with the tenant is superceeded by section 8's contract.
4) ANY valid complaint against the tenant reverts back to #1.  If it's against the SECTION 8 CONTRACT (not yours, section 8 don't care about your contract), they will be removed from the program, leaving you to remove them from the house.

Personal Experience:
1) most of your callers won't leave working or atleast correct contact numbers.
2) those that DO show up, after telling them the application fee, REQUIRED to process the application, will fill out the application, then claim they don't have the money.  Then will call you in a week to see if you've accepted them.
3) rarely pay their portion of the rent.
4) (almost) ALWAYS move someone else in with them
5) Blinds WILL be destroyed.
6) Carpets and cabinets will become VERY VERY dirty.
7) WILL fight with you about past due rent and/or other issues (such as extra people not being allowed to live with them, why they can LEGALLY withhold rent, etc) and tell you to go to section 8 about it.  (Then when you do, they'll come to you with 'why did you go to them?  I thought we were cool?')

So, basically:
If you have a house in a GOOD neighborhood, in good condition, use section 8 ONLY if you're going to be VERY VERY VERY detailed in your screening process.  There ARE good people on section 8, but finding them is next to impossible.  If they're on section 8, they're TYPICALLY NOT gunna have a security deposit big enough to protect you.  (IF they DO, how did they get it?  My deposits are typically TWO months rent.)
If you have a house in an area that's rough to rent in, and the houses aren't in 'prestine' condition, put it on section 8.  Ask for HIGHER rent than you expect, cause Section 8 will try to cut ya down.  you can generally get them to pay ALMOST (research it!) market rent, cause they'll insist your asking higher than market. (they wanted me to rent a $900 house for $450! but when I refused to budge, they 'talked to their supervisor' and decided they could pay $850).  Make sure you get a security deposit, AND expect them to want to use it to pay ATLEAST their last 2 months rent.
They'll break the contract on a weekly basis, and section 8 won't care.  Section 8 'doesn't support' late fees, and WON'T let you charge late fees on THEIR payment, EVEN if they don't get it to you till the 3rd week (usually you get it by the 4th day though.).
People that TRUELY DESERVE/NEED section 8, won't be able to rent your house because they'll need extra modifications that your house doesn't have.
There ARE good people on section 8, seriously.  BUT, finding them is VERY hard, and the landlords that GET them will go OUT OF THEIR WAY to keep them.  So, if they're not NEW to section 8, they're PROBABLY someone else's reject.
The ones you get, IF NOT NEW TO SECION 8, KNOW they get a second chance at everything, so they're gunna try to get away with everything you don't call them on.  (If you complain to section 8 the process is, they send them a letter giving them x days to correct it, then till the end of the next month to dispute the complaint.  Section 8 WILL NOT TELL YOU ABOUT THE DISPUTE HEARING.  MAKE SURE YOU GET THAT FROM THE CASE WORKER, AND MAKE SURE YOU GO.  Then they have x days to correct it, if SECTION 8 finds it a valid complaint, or they'll be terminated.  MOST will fix the complaint, others, while fixing the complaint against them, will find MINUTE problems to complain about, so section 8 will come after you.  'yeah, the window's broken, and the glass is laying in the front yard, and my kid had to go to the emergancy room for cuts on his arm, but WE didn't break the window!').  They WON'T tell you about things such as leaking pipes (which strangely enough happen VERY often in rental property.  When was the last time YOU had a leaking pipe at your house?) or leaking roofs, they'll use them as 'substandard housing' complaints IF you complain about them.)
DO NOT believe the stories they tell you about how their last landlord was bad and wouldn't do any repairs (chances are that's because the things that broke were THEIR FAULT.) wouldn't give them their money back for the security EVEN though they cleaned before they left (Their clean, and our clean are 2 totally different things)
If they are forced or choose to move out, they property will be left VERY messy, with lots of old furniture left around.

So, if you're still reading this, you can see, and from reading most of the previous messages, Section 8 has FEW benenfis for the landlord, but if you're desperate, you can get someone in there pretty quick on section 8, (ohh yeah, Section 8 will TRY to make you repair things that don't need repair, stand firm.  If there's a stain in the rug, you don't have to fix that!  remember, they're checking for SAFETY issues, not cosmetics.  AND they're NOT gunna pay you Market.  expect a little less..)

[Oklahoma Investor]

A traditional rule of thumb for screening tenants is verifying gross monthly income of 3 x the rent amount.

How does that rule change for Section 8 tenants?  For example, if their voucher pays almost all of their rent, how much income should be required to cover utilities and other bills?

On a related question, I notice lots of S8 tenants have had evictions filed against them previously.  Normally, that would be the kiss of death for traditional rent payers.  However, should that standard be modified some if they're now on the government gravy train and paying with a voucher?

[Bluemoon06]

Can you legally deny Section 8 tenants?

In section 8 the property has to be approved and placed in the program.  Since I have not gotten my properties approved, I can't accept Section 8 because I am not in the program.  Even if you are in the program you screen each applicant just like you do anyother time.  You are still the landlord and they are still the tenant.  If the applicant has problems (Pit Bulls, Sexual preditor, etc) you can turn them down because of it. 

[tatertot]

There are  a lot of things that will get a tenant evicted besides non-payment of rent: moving in excess people, drug dealing, sneaking in a pit-bull, assaulting the landlord, burning down the kitchen, excessive destruction of property.......

Even the non-payment of rent on Section 8: the tenant is supposed to pay a percentage. So are you really going to be happy if you don't ever get the tenant's portion of the rent?

[Liquidity]

I had a question about the utilities on rental properties with section 8. I read that utilities are supposed to be included also. how does this work for single family home rentals ? I can understand this for apartments but the utilities for a SFH could be a large amount of money compared to rent collected each month.

[propertymanager]

The utilities do not have to be included.  I never pay gas or electric and don't pay water in SFHs.

Mike