Section 8 or not with new rentals

[Blake M Pursel]

Curious on what people’s take is with making your rentals section 8. Fairly new to all this, but I have a couple rentals, and I’m working on a brrrr right now that I am making the place very nice. My initial thought is I don’t want section 8, because it is more likely that my property will get torn up. But listening to these “gurus” online say that they can charge higher rent rates with section 8 has me wondering. 

Could anyone shed some light on this? 
thanks! 

[Patti Robertson]

I have a lot of SEC 8 experience - 120ish SEC 8 leases being managed right now.  What you have to think about is this - if you buy in a low income neighborhood, you are going to end up with a low income tenant. Whether they are SEC 8 or not, it is unlikely you will be able to attract white collar professionals to live in your C/D rental.  Whether they are SEC 8 or not, it is likely the tenant who chooses to live in a low income neighborhood will not be highly educated on how to care for a home.  IMO the chances of your house "being torn up" is the same whether you have a SEC 8 tenant or not.

Without SEC 8 you will likely have to have several low income income earners in order to have enough household income to meet the 3 times rent criteria.  On average, low income wage earners tend to not be as stable as high end wage earners.  If a kid or elderly parent gets sick and they have to take off a week +, they are more likely to be fired or quit.  They live paycheck to paycheck, so if they have a financial hiccup like needing new car tires, etc, they won't likely be able to pay rent.

With SEC 8 you will likely have only one low income wage earner, who will have the backup of the voucher to fill in the gaps when they inevitably lose their job because of low income life issues.  As a landlord, I love SEC 8 because these tenants tend to have very long lease terms.  I have one SEC 8 tenant who has lived in my home since I bought it 12 years ago.  

@Nathan Gesner - My guess is that housing authority has changed their bedroom size criteria and this tenant now qualifies for one less bedroom.  Our HAs sometimes change this criteria with their annual budget changes. We have some HAs who use two heartbeats/bedroom, no matter what. They use their budget to house more families, but at a higher density for the landlords.  We have other HAs who give the single voucher holder her/his own bedroom plus separate the sexes of the other household members.   A mom with three kiddos would end up with a 2 bedroom voucher in the first example, and 3 in the second. 

The topic of SEC 8 comes up ALOT on BP.  Use the search bar and you can find years of posts.  I got tired of typing the same thing over and over, so I created a blog post that shares a lot of data and gives some tips and tools.  You can find it at the link below.

https://www.biggerpockets.com/...