Hey guys what are your thoughts on section 8?

Question

So I'm hunting for a property yesterday and I found a property that has a tenant who is section 8 they have lived in the unit for 14 years. I see great potential for cash flow the property looks great I'm just not too knowledgeable about section 8? Have any of you dealt with section 8? Pros/cons?

Robert Herrera · Answer

@Bryan Templin I usually call these tenants "Government Babies." This is because a lot of them seem like children. They are grown adults, but can't seem to get life together. I'm not saying some don't need assistance, etc. I just don't like to be the one who deals with them. I've personally had to evict 3 of these types of tenants. #1 For not paying THEIR PORTION.Section 8 only pays the larger portion of the rent. The tenant is still responsible for a certain amount of that. If they have no income, they don't pay that portion and act like it's OK, because the government is paying the rest. Usually the rest is your Cashflow. #2 Not caring about the home, as it's not theirs, and they probably will never own one. Usually destroying a lot of stuff. Repairs also go up as they just use stuff very ruffly and don't do any preventative maintenance. I had one tenant with a sewage leak in the basement. They didn't pay their rent. They were trying to use that as an excuse after we found out about it. The city wouldn't turn off the water and said the tenant would have to shut it off... The tenant refused to shut it off and continued to flush diapers and other things down the toilet to try and destroy it more. Called all of the appropriate contacts in the city but none of them would come out and look and see what they were doing. We ended up having a crew down there while they were using the water. They had to fix it while it was still going on. Man was that a headache. Then, after we repaired everything, the Health Department decided to show up. They decided i needed to do some upgrades and repairs to the water heater, and gave me a ticket. It was crazy. Anyway we ended up getting them out.As you can see, it's probably a lot easier to just have regular tenants. I will NEVER work with them again. That is my 2cents.

Linda Weygant · Answer

In the two counties in Colorado I'm in, it's great.Pros:1. Rent comes in on time every month, direct deposited.2. The county background checks the tenants so technically I don't have to. I do anyway, but the county doesn't allow people on the program if they've got criminal or eviction history.3. People do not want to risk losing their access to the voucher, so they tend to either be very careful or very sneaky. It's a coin toss as to which way any given tenant will go.4. Many times, once a tenant moves in, they stay forever (like the 14 year tenant you've got now). If the place is safe and well maintained, they'll stay and you'll get rent bumps from the program annually providing your market supports that.Cons:1. Sometimes you get a bummer. Like a real bad bummer - somebody who starts or continues to make poor life choices and brings others into the property who make even worse ones. My personal statistics for this so far are that only 1 of the 6 section 8 tenants I've ever had has gone south. My personal statistic for regular renters is 5 went south out of something like a little over 30 tenants. So it's exactly (or close to) the same percentage. (It's almost like socio-economic status has no affect on whether or not you're a decent human being.....)2. Annual inspections. For me, it's not an issue because I keep my properties pretty well maintained. For those who like to let things slide, the county will make you fix stuff.

Shane Avila · Answer

We accepted the program during the recession to guarantee a portion of the rent. The regulations lately have led us to stop accepting it. I can only speak specifically about dealing with them in my county. The quality of tenant is mid to low. We do have some that are good and have had some that are extremely awful. Our market is at a point where we are getting 5-10 applicants per property, so we don't have to accept. These are just a few off the top of my head.Pro's:Guaranteed portion of the rent.You can get a tenant to cooperate with issues usually by reminding them that if evicted they will lose their voucher.Cons:Higher chance of low-quality tenantStricter rules regarding notices and termsSection 8 can cancel the tenant's assistance at any time without warningOften request unreasonable repairs be done Sometimes require you to repair something and back bill the tenant or they hold payment

Bryan Templin · Answer

Robert Herrera wow that sounds horrible thanks for the feedback

John C. · Answer

Here in CT I have had a very good experience with section 8. Although it took a few years to fully understand the system and how to use their policies to my advantage. I could list several keys to dealing with the section housing authority and the tenants, but in short the key is you have to stay on top of the property. Be seen, be in contact, and be ready to work with the housing authority. If you are planning on a "set it and forget it" property then section 8 is most likely not for you.

Bryan Templin · Answer

Shane Avila thanks for the post Shane I appreciate it it's definitely something to consider