Would you rent to a section 8?

[Jimmy S.]

Long story short I never dealt with section 8.

She is a single mom with 5 kids, yes 5 kids. Right away I can see the kids damaging everything. Rent is $1050 a month and section 8 will pay for $800+ each month. She does have a job and from what this hud person I have been dealing with who called about the property is she wants to get the kids in a much better school district and will be moving alot closer to her job... The property right now is in decent shape. 3 bed 1500sqft and shes very excited and hopes it works out..

Would you accept or decline them and is there anything else I should know?

Thanks again

Nate

[Andrew Fidler]

@Sam B. - I have close to 20 sect 8 houses in Toledo...and I only rent section 8.

(My specific niche is owning and renting in poorer neighborhoods, buying foreclosed 3 and 4 br houses for under $20k and renovating them to sect 8 standards. I don't want the common tenant because they can't and don't pay consistently. It's a gun-totin type of area but I'm quite comfortable there and the trouble has never made the mistake of bothering me.

I actually enjoy the sect 8 arrangement because the tenant is being threatened with loss of their voucher by not paying their portion. IF I have a tenant portion of the rent that is unpaid I serve a 3 day and cc their administrator within the program so they know we have had an issue. Typically the tenant runs to "mommy" with big alligator tears and find the money somehow. Water in toledo is actually the larger issue- it must remain in the owned name and with tenants being billed every third month means they never make a partial payment and ignore the $150 bill that comes every three months. THUS I get shut off notices pretty regularly for our houses and forward them to the tenants. Again, the tenants run to the non-profits in the area and cry about how their water is being shut off and they have kids and it magically gets paid.

Entitlement and poverty cycle and my own personal conservative politics aside- the niche needs to be served, the money spends, and any day that the niche changes is the day I will evolve my business model.)

@Jimmy S. - there is a detailed review once you sign that voucher so I suspect the 6 people in a 2 bedroom house will be stopped at that stage. If anything I have to stop 2 br vouchers being submitted for 4 bedroom houses. It sound like you have a damned nice house in a great area...unlike myself you need to consider sect 8 carefully. I like that the woman works, I would have been happy to rent to her...then again I can repair almost any amount of normal wear and tear for $2k in my houses.

Overall sect 8 is a great investment...tenants stay years and years and you have a 3rd party direct depositing to you and making BOTH the landlord and the tenant play by the rules. Still, plan on putting cash into the annual inspection and definitely plan on $20 for lightbulbs and smoke detector batteries. Sect 8 folks exist- they don't improve nor maintain very well. I have taken care of tenant-assigned repairs many times simply because I am fine laying out $50 to collect another $8,400 the next year in rent.

- I actually arranged for one of my guys to drive a tenant to their annual review because they were out of reschedules and I was mailed by sect 8 that they were being kicked off the program if they didn't make a specific meeting. Again- $20 out laid to keep a 3 yr tenant in place...$25,200 had already been paid to me, why not keep the ball in play!!!

All depends on how you want to own and manage, I am fine with a reasonable amount of hand holding...just part of the niche I'm in.