IS SECTION 8 RECOMMENDED FOR FIRST-TIME LANDLORDS?

Question

I am getting ready to list my first rental property. I called a real estate lawyer to inquire about some paperwork and she expressed to me that she didn't recommend section 8 for first-time landlords. She says it is a lot of work and there are a lot of scammers. I'm not sure what kind of scamming they do. I have heard mixed reviews. Some people love section 8 and say they take care of the property because they do not want to loose their voucher and some people say they destroy the property since they "don't have any skin in the game". I'm so confused as to which route to take, any advice or input is greatly appreciated.

Jay Hinrichs · Answer

we owned a large portfolio of section 8 multiple hundreds of them in the deep south.to me section 8 is somewhat regionalized.. Each state/city office acts a little different in how they run the program.what your lawyer is warning you about .. is this with our portfolio of section 8 houses 95% of the tenants were unwed mothers with children and multiple baby daddy's.. Its just a fact that when you have a single parent and 2 to 4 kids or more your house is going to take on more wear and tear.then Section 8 has annual inspections and you have to fix whatever they broke.. Don't fall for the ( they are afraid of losing their voucher) that is not reality from my experience in some states you have to take the first acceptable applicant and cannot say NO section 8. But in some areas of the country like the deep south Section 8 is a huge swath of the rental population and pays significantly more rent per month than market rent. And once set up you do get the rent unless your tenant is kicked out of the program mid lease. One thing that I do is make my fico score requirement over 700 . this is a huge indicator on quality of tenant section 8 or not.. If I have a section 8 applicant with a true 700 plus fico then for me that would work no problem. takes a little longer to rent but that method has worked for us.

Bryce Jamison · Answer

Checkout Biggerockets Podcast # 748. They go into section 8 in depth on this episode. I share the same concerns as your real estate lawyer, but I've never personally rented to section 8 tenants. Has your lawyer? Maybe we've both just heard the horror stories and section 8 tenants are great?Ultimately, I'm sure the average section 8 tenant falls somewhere in the middle of the risk spectrum, but so does every other tenant. Determine you're own risk tolerance and screen tenants with this tolerance in mind. Also be weary of advice from people who've never done what you're trying to do (including me!).

John Morgan · Answer

@Talina AlvaradoI only have two sec 8 properties and they’ve been easy to manage. These people are getting free money practically scamming the system. It’s sad to see our tax dollars wasted like this on most of these people. Lol. They don’t want to lose their voucher and freebies, so they’ve been good to me. I’m considering moving more of my rentals in the program since there’s a huge demand for sec 8 rentals.

Bud Gaffney · Answer

Screen screen screen.

Caden Wakim · Answer

Screen the tenant like you would any other, background checks, credit checks, criminal background, referrals, call previous landlords etc.be sure that their voucher amount covers your PITIa lot of times the tenant will only be responsible for a small bit of the rentI only rent to section 8, I haven't had any major issues as of yet... knock on wood.

Richard F. · Answer

Aloha,You should familiarize yourself with the documents you will be working with. Here is a link:https://www.hud.gov/program_of...In particular, the inspection checklist and inspection form will help you prepare the unit. You need to "pass" the first inspection or you likely lose another month or so of rent while they reschedule a second inspection.Also, the HAP contract and Tenancy addendum are the actual terms you will be agreeing to, and they will be attached to your Rental Agreement. Of note is the fact that IF the Tenant violates the HAP contract they may be removed from the program, meaning the so called "guaranteed" rent payments will stop, and you will have to eat the cost and time involved to evict. What happens often is that when the Tenant is responsible for paying some portion of the rent, they fail to do so. Your choices are typically accept only the portion paid by Section 8, reducing your cash flow, or notify the caseworker, who may decide to remove the Tenant from the program, reducing your cash flow further.

Bob Stevens · Answer

There great if you screen property. HOWEVER, you must hire a PM co. Learn over the next 6, 8 months. If you feel you can go on your own ( do not recommend ) then go for it. I have many years of experience with the program. 1ks of move in and outs, screen well,

Kyle Tusing · Answer

I don't think it makes a huge difference, you have the ability to screen section 8 tenants the same way you screen normal tenants. If you do your best to do that and can trust your judgement on people then both are equally as risky. Because even with non-section 8 tenants you can pick someone who trashes the place, misses payments, etc...