What about section 8 housing?

Question

I don't really hear about section 8 housing, maybe I'm just not listening, after learning about section 8 housing I wondered why no one else was talking about it.

From what I know there is a very high demand for housing vouchers and that the government is planing to spend more money for people to be able to get into more homes with housing vouchers.

I plan on doing a section 8 due to the fact that there is a very low entry barrier and I will have the security of the gov. to pay for the rent every month so I'm not chasing down rent. I say low entry barrier because I can section 8 a home that was bought for 50,000 and rent it for the average rent rate in the area vs. a home bought for 50,000 that does not rent until after rehabbed 20-30K at average/just above average rent rates OR even getting into a property for 150,000+ to only be able to collect rent at the average rate.

Im curious to see what other people experiences are with section 8 housing and if they have any advice for section 8.

My market is in St. Louis, Mo

T Giddens · Answer

I have two units rented to section 8 tenants. I receive payments from both section 8 and from tenant…on time. The tenants I selected take care of my property so I don’t have complaints on that end. The 2 headaches are dealing with the overly funded government program that spends very little on customer service. It’s a disaster especially when negotiating rent. I almost always get the asking rent rate when a section 8 tenant is employed but if the tenant is unemployed section 8 nickels and dimes you. I encourage anyone considering section 8 to thoroughly analyze their property inspection handbook to avoid failing inspections. Also, throughly vet tenants (must have a proven work history) to ensure section 8 approves your highest requested rent rate.

Bill B. · Answer

Feel free to click on the magnifying glass in upper right of your screen and typing in section 8.

Rod Hanks · Answer

@Soung You

Section 8 is great but don’t think you can buy a junker house and just rent it for top dollar to a section 8 client. There are inspections that are very detailed. Also if you just do an average or below average rehab you will get a marginal tenant. I rehab my properties very nice and get great credit section 8 clients who take care of my properties for a long time.

Tony Kim · Answer

What accounting requirements are you referring to? I've done Section 8 for years and I've never had to do anything differently from a reporting or deliverables standpoint when it came to my accounting records. Also, 30-40% tenant portion is not correct...it's never that high. My tenants pay between 12-25%.

Edit B. · Answer

@Soung You

We’ve sent out a rent increase notice to tenant and section8 in CA 62 days ago. So far no response from section 8 after multiple attempts by ownership and tenant.

Finally after contacting some random manager there was told it would possibly take another 2 weeks for them to respond. Mind you just no contact whatsoever in between, and new rent is scheduled to start in 2 days. Repeat this scenario each time you need new tenant or rent increase or vacate tenant and that’s what it looks like. In CA you are legally not allowed to disqualify tenant due to section 8 income alone so I disqualify based on the fact that they don’t operate within timeframe of the law

Robbie Young · Answer

I stopped taking section 8.  At the time went from doing an annual inspection to quarterly inspections taking up my time.  Delays in getting payments started.  If deposit doesn’t cover damages then probably out of luck.

Most landlords I see doing a lot of section 8 rent a C class property for a B class price making it worth the extra hassle.

Brandon Heimsoth · Answer

@Soung You

I have 2 section 8 houses in St Louis County. I inherited the tenants—one low maintenance, one high maintenance. I don’t mind the inspections. In my experience, the things they’ve found, you want to fix (broken door knob, bad gfci, someone living in basement, etc). It gives you extra eyes into the property. And, I like the guaranteed income. I can’t say that about my 4-plex where a couple decided not to pay during COVID.

Danielle Jackson · Answer

@Tony Kim that is great news! Experiences vary with Section 8. By reporting/accounting for Section 8 I was referring to the documentation that, at least in the Phoenix area, is required such as Section 8 as a total of tenant payments and % of housing that is Section 8 on a monthly basis.

As for 12-25% that is great. Arizona just launched a new voucher program to encourage landlords to provide Section 8 housing, and it covers up to 70% (tenant has to cover at least 30%).

Danielle Jackson · Answer

Also you will need to make sure you are prepared for the govt required reporting and accounting requirements. Good luck if you decide to go this route!

Danielle Jackson · Answer

I know people who have invested in properties that accept Section 8, and the inspections can be fairly tedious. Additionally, while you may be at a lower risk of default for the government paid portion, keep in mind the tenant is usually responsible for the remaining 30-40%.

What about section 8 housing?

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