Section 8 tenants in NJ

[Mark Rabkin]

Hi All, I'm a new investor and about to purchase my first investment property - 3 family house in New Jersey.  The property is fully occupied with 2 of the apartments rented to Section 8 tenants. 

I have 2 questions:  

1. What is your experience with Section 8 in NJ?  

2. Is it possible NOT to renew Section 8 lease when it expires (one expires in July 2020, the other in October 2020) 

Thanks

[Mike Bonadies]

@Mark Rabkin congrats on buying your first rental property! There are a lot of mis-conceptions around Section 8 - one is that all section 8 tenants are a pain. That is simply not true. Some of my section 8 tenants are some of the best because they do not want to lose their voucher which is very hard to come by, especially in NJ. The second misconception is that Section 8 is a unified program. It's not. There are three types of Section 8. Let me breakdown my experience with each.

Federal -  The fastest moving of the three. These tenants normally get a blanket voucher amount which they can use on any rental as long and the bedroom count lines up. There is some paperwork involved but the federal offices are pretty tech savvy and processing it can be fairly painless. I would allow a 30 day window from purchase to actually verifying with Section 8 that you are the new landlord and that payments should be sent to you.

State - This is the slowest and least well ran group. NJ Section 8 can be a bureaucratic trainwreck at sometimes. They require a ton of paperwork and their offices still require "wet signatures" to function so it makes it a challenge to get everything done in a timely manner. Their processing timeframe is long too. It can take up to 4 to 5 months for state section 8 to recognize new owners. Some offices are notorious for not sending payments on time either.

Municipal - I don't have a ton experience with these guys and only a few townships have them in South Jersey. So far they have been fast and lenient. Payments do seem to come in on time as well. While the paperwork is similar to federal and state I've noticed I've need less than both which makes it pleasant to work with them.

Best Luck!