First rental - Section 8?

[Jenny Pennock]

Hello everyone!  I'm buying my first property, a duplex.  Both sides are 1/1.  One side is rented at $400.  The other side was rented when I started looking at it and they've since decided to move out.  Apparently the lady leaving has an older aunt who is approved for section 8 at $475 and would like to rent this soon-to-be vacant side.  

Since this is my first property, would it be advisable to go forward with renting it to her under section 8 or not?  I don't know much about section 8.  Being forced to work with the housing authority does not sound like a fun thing to do if given the option not to.  But I also don't know what options there are since you have to treat everyone equally, correct?

Thank you for your help.

[Chris Dawson]

@Jenny Pennock I have had a lot of experience with Sect 8 in Kansas City on both the MO and KS side.  I have clients who love it and some who hate it.  I'll throw out here some of my thoughts:

In my experience, renting Sect 8 on a studio, 1bed, or 2 bed unit has been more successful than renting Sect 8 on 3 or more bedroom units for the following reasons:

• Smaller units mean less maintenance and less chance of failing an inspection
• Smaller units mean less tenants per unit.  This translates to less maintenance which means less chance of failing an inspection.
• Disabled Sect 8 tenants (vs single moms with lots of kids)  have been the best tenants for us and they only want 0-2 bed units.

Screen your Sect 8 tenant just like you would any other tenant.  The housing authority looks for completely different criteria when they accept somebody into the program.  You need to be checking for evictions, criminal convictions, and employment history just like you would any other tenant.

Find our where your local (local to your property) Sect 8 office is and go visit it.  Some Sect 8 employees will be extremely helpful.  Some will be complete A-holes.  It usually depends on how busy they are.  For example, KC MO is terrible.  Independence, MO is great.  Either way, at least pick up any and all pamphlets you can find so you can better understand the process.  Each city is different and the more you are familiar with it, the better your experience will be.

Be patient with your first Sect 8 contract.  It can be a slow process.  Usually once your company is in the system, it won't take as long to add more units.

One of those pamphlets you picked up at the Sect 8 office should have a list of all the items the inspectors look for when they do their inspections.  Use this list as a checklist and walk through your property (or have your PM do this) at least a few days prior to your inspections and make sure you have everything in order.

When you have your inspections, take a handyman with you.  Most of the time the stuff the inspector will flag are minor items that can be fixed on the fly such as replacing broken outlet covers.  Most inspectors will let you fix items while they are inspecting, provided they are quick to fix.

Hope this helps!

Happy Investing