How to get started with Section 8 in Atlanta?

Question

I am interested to get started with section 8 rentals in Atlanta, Ga.

What are your thoughts on ways to:

- Identifying the right section 8 areas

- Find with experience in section 8 (inspection process, etc)

- Identifying good Section 8 properties

Rick Baggenstoss · Answer

David - Think of Section 8 tenants as another longterm tenant profile where you don't care if you're getting an S8 tenant or a market rate tenant (paying their own rent).   I have several (down from many) S8 rentals that many regular tenants would not have considered a few years ago when rentals were plentiful.  Today, that's not so much the case.

Still, if you want to target S8 tenants, I'd find an area in the path of progress with great numbers. Get a copy of the S8 checklist which specifies HUD requirements for tenant readiness, then do your rehab.  Advertise for rent and count on an S8 tenant taking 30 days to move in because your property has not been fully vetted.

Inspections are tedious.  Depends a lot on the inspector.  I've had a great section tenant for 5 years with very few issues, super clean, and I will be able to turn over the property effortlessly.  However, my typically expense is far greater than that due to extraordinary wear and tear on the property.  I would not emphasize this strategy, but add it when I had to because I picked up a great house in an area where only Section 8 renters were attracted and paying above market rent.

Good luck,

Rick

Robert Whitfield · Answer

I suggest you do a lot of investigation with both HUD and landlords working with the program before going down that road - all PHA's (Public Housing Authorities) are different. There are a lot easier ways to make money in real estate.

As someone who worked in a local Public Housing Authority for many years as the Director of the Inspection Division, one of my duties was outreach to get more single family and multifamily owners and managers to participate in our program.

I have seen things that would make the average person cringe, and I have seen landlords units become totally trashed with little assistance from the PHA, landlords having their rent cut off because of some inspection issue, or even issues the tenant created for which they had zero control.

I will tell you that "guaranteed rent" does not exist - the closest you will get to that is with high quality tenants not low quality and indigent tenants.  With the inherent hassles dealing with the bureaucracy and ever changing guidelines, not to mention the hassle with dealing with low quality and low income tenants and areas, low rent rates, I can't imagine why anyone would even dream of dealing with Section 8!

Just some insights from someone who has been there and seen the program in action for years.

Dan Mahoney · Answer

@David Lyons in today’s market, the demand for Section 8 rentals in the City of Atlanta significantly exceeds the supply of landlords willing to accept Atlanta Housing vouchers.  If you have a decent unit, especially if it’s a single family house, you will get a lot of interest from both Section 8 voucher holders and unsubsidized applicants.  The voucher holders tend to be more motivated than the unsubsidized applicants because Atlanta Housing gives them a deadline and most landlords in town don’t accept the vouchers.  The reason for this, as @Rick Baggenstoss pointed out, is that accepting Section 8 vouchers requires that a landlord submit to a painful bureaucratic approval and inspection process that all but guarantees a month or more of vacancy at the start of each lease. Once the tenants move in they tend to stay long term because the bureaucracy is just as painful for them.  On balance it’s an attractive program for landlords but dealing with Atlanta Housing can be very frustrating.

Thomas S. · Answer

The secret to success with S8 is the local authority not the tenant themselves. You need to investigate the S8 handlers and confirm that they are supportive of the landlords and will act swiftly when issues arise. Income is not guaranteed regardless of how the system works, Tenants will get cut off, they will not pay their portion and they will do things that are beyond comprehension for the normal person. They have zero social standards and will often move multiple people into the unit without permission. S8 management is a lot of work and requires strict supervision on the part of the landlord/investor.

The welfare handlers are the key to your success in S8 investing. You must avoid areas where they are not doing their job. Never assume the rent payment is garanteed...it is not.

Rick Baggenstoss · Answer

@David Lyons  It is a reasonable point of view.

Dan Mahoney · Answer

@David LyonsAtlanta Housing serves the City of Atlanta only (so, not Hapeville). There are other housing authorities that serve other areas but I’ve never worked with them.  In some cases it’s possible for voucher holders to transfer from one housing authority to another if they need to move.

David Lyons · Answer

@Dan Mahoney Thanks for the insight.  Question for you.. are all areas eligible for section 8 housing?  For example does Atlanta Housing provide section 8 vouchers for homes in Hapeville?  Is it specific to the county or within Atlanta city limits?

David Lyons · Answer

@Rick Baggenstoss Thanks for the insight.  Yes, I definitely hear you on tedious inspection process.  I read 'The Section 8 Bible' and it has a lot of strategies to hack this process, which you can sum up as eliminating everything that is not needed to pass an inspection before a tenant breaks it, which can in turn cost you money and to fail an inspection.

I am attracted to section 8 because of the guaranteed payment, particularly in low income areas that fit my purchase price budget where good tenants may be hard to find and in the event of a downturn the risk seems much lower.  Any thoughts on if that is a reasonable point of view?

How to get started with Section 8 in Atlanta?

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