Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Jane Ng - If you search BP for Section 8 you will find TONs of info. I have 85 SEC 8 leases and love the program, but it is not investing 101. You really need to know the rules of the program so you can protect yourself. If you do that, it is a very good program for investors. I got tired of typing the same thing over an over so I put my experience and suggestions in a blog. Here’s the link. https://www.biggerpockets.com/...
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
6y
@Jane Ng there are plenty of successful investors who accept housing vouchers. In some states and counties you don't have a choice technically. I have had a lot of success in lower income areas with them, but I don't deal with them personally in my nicer properties. The housing voucher fills an important spot in areas where it is hard to find a qualified tenant. If you have trouble finding tenants who make 3X the rent, then the housing voucher can help a lot. I actually know several land lords here locally in Cicero, IL that have made a business out of accepting almost entirely housing vouchers. There are local housing groups that partner with section 8 to help homeless veterans, single mothers, etc. These seem to be the best programs to partner with.
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Jane Ng - If you search BP for Section 8 you will find TONs of info. I have 85 SEC 8 leases and love the program, but it is not investing 101. You really need to know the rules of the program so you can protect yourself. If you do that, it is a very good program for investors. I got tired of typing the same thing over an over so I put my experience and suggestions in a blog. Here’s the link. https://www.biggerpockets.com/...
Chicago, IL · Member since 2018 · 546 posts · 227 votes
6y
Hi Jane! A good question to think about as you're getting started. I know there are a lot of stigmas attached to renting to individuals who hold Section 8 housing vouchers; it is easier to think through the cons - however, some of the pros might be that you open up the property to a bigger pool of potential applicants. In many instances a large portion of the rent is almost guaranteed to hit your pocket each month - again, this may not cover the full amount but they are consistent payments coming in (paid by the government). Typically the tenants are already prescreened and you're much more likely to have a lower vacancy rate. However, there's always a certain level of risk that you take in accepting Section 8 vouchers and for you, you need to decide how you'd like to proceed - I know a portion of the rent is guaranteed, which is great, but I also wonder if the portion that the tenant is responsible for is considered riskier when compared to non-section 8 tenant candidates. Additionally, there are a lot more regulations that you'll have to abide by as far as the level you can set the rent at, and I don't believe HUD pays Security Deposits either. Other downsides to going this route: the process to get the unit approved can be long and tedious; the apartment has to pass section 8 inspection - they are thorough, and go by the book. Section 8 doesn't manage the tenant, so if the tenant isn't paying their portion of the rent it's still your responsibility to evict them. All you can do is report it to Section 8 and there's a possibility they can lose their voucher. I'll defer to others though to keep the pros and cons coming! Still learning about this myself but happy to share what I've learned thus far.
@Jane Ng - If you search BP for Section 8 you will find TONs of info. I have 85 SEC 8 leases and love the program, but it is not investing 101. You really need to know the rules of the program so you can protect yourself. If you do that, it is a very good program for investors. I got tired of typing the same thing over an over so I put my experience and suggestions in a blog. Here’s the link. https://www.biggerpockets.com/...
Thank you greatly for this info and your blog was amazing. You have answered so many questions in one post I couldn't believe my eyes. LOL. thanks again greatly appreciated.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
3y
Aloha,
Here is a link to the actual HAP contract (that becomes part of your rental agreement), inspection form, and other documents utilized by most programs:
With these programs, if you can deal with the slow pace and bureaucratic screw-ups, everything is fine until it isn't. Once a tenant is OFF the program, either due to violations of your and/or the HAP agreement, or because you are unable or unwilling to make repairs that you are required to (regardless if tenant damage or not), the payments just stop coming. It is now up to you to initiate and follow through with an eviction to actually get possession of your property again, and at your expense. If tenant does not pay their small portion of the monthly rent, YOU have to evict...or let them ride.
Certainly there ARE some "good" tenants on Section 8 and similar programs, but for the most part, repairs, housekeeping, yard maintenance, and drama, in general are likely to take up considerably more of your time and money than non-subsidized, properly qualified, long term rentals.