Let's Get REAL For A Minute Section 8 HUD Property Investors

[Ashley C.]

So I just saw this post about Section 8 HUD tenants, and this post stated something along the lines of section 8 tenants being more likely to damage properties because they're section 8 low income tenants, and also something about investors not wanting to put money needed into Section 8 properties because they think they're just going to be ruined by these Section 8 tenants, and as someone who knows the entire process with investors, owners, contractors, tenants, and prospective tenants, this is what I have to say about it:

In my experience, Section 8 HUD tenants are actually better custodians of the property because of many factors, but 3 of the main reasons being, there is an annual HUD inspection that is performed on each property, so this gives the owner an extra 'protection vector' against damages, also, the initial placement of a Section 8 HUD tenant requires a passing HUD inspection, therefore there's a record of the property's initial state prior to move in, and additionally, they want to have an easy renewal voucher process annually, and their unit remaining in good condition is an incentive for those reasons, therefore they are LESS likely to damage a property - their future depends on it! Not only this, but, they have to wait for "the HUD process" before being placed into a section 8 property, and it can take weeks, sometimes even months, and if something goes wrong on their end their RTA packet can be voided, and they would have to start the process all over again. Rarely, does anyone want to repeat this process annually. Not the property manager, the owner, not the tenant. Section 8 HUD tenants are usually families, or the elderly, or single parents that need these vouchers and properties to survive, they're not going to risk their livelihood so recklessly.

Furthermore, I do agree that owners will all too often invest pennies on the dollar into a property and expect it to suffice. If you're purchasing in a low income area, you're already getting a discount on the purchase, BUT it's ridiculous to think that a property purchased at 30k> is going to be "turn key" and rent ready, it NEVER IS! That property will still require 10, 15, sometimes even 30k ON TOP of the purchase price to be rent ready, especially if they intend on passing a Section 8 HUD inspection!! The other frustrating piece to that pie is that folks assume because properties are going for cheap in an area that contractor rehab work is going to be 'discounted' as well, and it is NOT discounted, it's the same going rate, if not MORE in less expensive neighborhoods because it is MORE COMPETITIVE in those areas for licensed contractors. They'll expect to get a "good deal" on everything and they're surprised when they end up with a trash rehab, but only wanted to spend 5k on it, when the property itself was only 15-20k... GET REAL INVESTORS! Folks need to wake up and MAKE the coffee, in order to get to smell the coffee, not just simply wake up and poor, magically the coffee is made, and that's the truth!

Reach out if you're interested, I know a LOT about Section 8 HUD!

[James Wise]

Quote from @Ashley C.:

So I just saw this post about Section 8 HUD tenants, and this post stated something along the lines of section 8 tenants being more likely to damage properties because they're section 8 low income tenants, and also something about investors not wanting to put money needed into Section 8 properties because they think they're just going to be ruined by these Section 8 tenants, and as someone who knows the entire process with investors, owners, contractors, tenants, and prospective tenants, this is what I have to say about it:

In my experience, Section 8 HUD tenants are actually better custodians of the property because of many factors, but 3 of the main reasons being, there is an annual HUD inspection that is performed on each property, so this gives the owner an extra 'protection vector' against damages, also, the initial placement of a Section 8 HUD tenant requires a passing HUD inspection, therefore there's a record of the property's initial state prior to move in, and additionally, they want to have an easy renewal voucher process annually, and their unit remaining in good condition is an incentive for those reasons, therefore they are LESS likely to damage a property - their future depends on it! Not only this, but, they have to wait for "the HUD process" before being placed into a section 8 property, and it can take weeks, sometimes even months, and if something goes wrong on their end their RTA packet can be voided, and they would have to start the process all over again. Rarely, does anyone want to repeat this process annually. Not the property manager, the owner, not the tenant. Section 8 HUD tenants are usually families, or the elderly, or single parents that need these vouchers and properties to survive, they're not going to risk their livelihood so recklessly.

Furthermore, I do agree that owners will all too often invest pennies on the dollar into a property and expect it to suffice. If you're purchasing in a low income area, you're already getting a discount on the purchase, BUT it's ridiculous to think that a property purchased at 30k> is going to be "turn key" and rent ready, it NEVER IS! That property will still require 10, 15, sometimes even 30k ON TOP of the purchase price to be rent ready, especially if they intend on passing a Section 8 HUD inspection!! The other frustrating piece to that pie is that folks assume because properties are going for cheap in an area that contractor rehab work is going to be 'discounted' as well, and it is NOT discounted, it's the same going rate, if not MORE in less expensive neighborhoods because it is MORE COMPETITIVE in those areas for licensed contractors. They'll expect to get a "good deal" on everything and they're surprised when they end up with a trash rehab, but only wanted to spend 5k on it, when the property itself was only 15-20k... GET REAL INVESTORS! Folks need to wake up and MAKE the coffee, in order to get to smell the coffee, not just simply wake up and poor, magically the coffee is made, and that's the truth!

Reach out if you're interested, I know a LOT about Section 8 HUD!

 I've dealt with 1,000's of Section 8 tenants. I can say for a fact that they do not treat the property better than most other people. You can still make a boat loan of money with Section 8, I've made millions, but these people are very irresponsible and they beat the holy hell out of the properties.

[Michael Smythe]

@Ashley C. what exactly is the scope of your experience with S8 tenants please?

[James Wise]

Quote from @Michael Smythe:

@Ashley C. what exactly is the scope of your experience with S8 tenants please?

 It's got to be incredibly minimal based on this completely inaccurate take on the behavior of Section 8 tenants.

[Ashley C.]

Okay gotcha thanks for that rude and unnecessary comment... I actually work with them everyday, and on a broad scale via PM.

[Ashley C.]

@James Wise funny enough I got the same impression from you based on your post, that's why I commented because it couldn't be more incorrect based upon my experience.

I will say yikes, you must be pretty insecure if you felt the need to say that about my own experiences that you have no knowledge of in states that you're not familiar with. 

Isn't it possible we're both correct based upon our experiences in different areas?

[Ashley C.]

Very close minded... That's sad.

[James Wise]

Quote from @Ashley C.:

@James Wise funny enough I got the same impression from you based on your post, that's why I commented because it couldn't be more incorrect based upon my experience.

I will say yikes, you must be pretty insecure if you felt the need to say that about my own experiences that you have no knowledge of in states that you're not familiar with. 

Isn't it possible we're both correct based upon our experiences in different areas?

 I've dealt with 1,000's of Section 8 tenants across multiple states. I've also dealt with many property managers who've dealt with 1,000's of Section 8 tenant across multiple states. Nobody's experiences are remotely similar to what you are describing. What you are stating is simply not reality.

[Ashley C.]

Thanks again for discrediting what you don't know or have experience with. Lol my last comment still stands that I'm sad for how close minded you are to think that my experiences simply can't exist, and you're the only correct person in the world... Must be a very small world you live in James. :(

[James Wise]

Quote from @Ashley C.:

Thanks again for discrediting what you don't know or have experience with. Lol my last comment still stands that I'm sad for how close minded you are to think that my experiences simply can't exist, and you're the only correct person in the world... Must be a very small world you live in James. :(

 What data do you have to support your narrative?

How many Section 8 tenants have you rented a house or apartment to?

How many units have you inspected after a Section 8 tenant has moved out?

[Ashley C.]

Lol a LOT. Again, small world, small thoughts, tiny opinions from James The Rude Dude. Please have a little decency and stop being a gross poster. Don't you have something better to do than to discredit people's opinions and experiences all day? 😂 James, please get a hobby! 

[James Wise]

Quote from @Ashley C.:

Lol a LOT. Again, small world, small thoughts, tiny opinions from James The Rude Dude. Please have a little decency and stop being a gross poster. Don't you have something better to do than to discredit people's opinions and experiences all day? 😂 James, please get a hobby! 

 Just answer the question. You are side stepping the question and making emotional attacks. You have come out with a narrative that is the exact opposite of the collective experiences of 1,000's of investors and PM's who've collectively dealt with 10's of 1,000's of Section 8 tenants and are refusing to provide any insight into your experiences.

[Ashley C.]

I did answer James. You're very offended, wow. I've got to go take care of some HUD tenants James, sorry I didn't answer the question to your satisfaction, I can imagine that must be frustrating for you to think that I have to do something to the level in which you require in order to be sufficient. I exist, so do my experiences, please stop trying to invalidate them because it doesn't please you or support your claim.

[James Wise]

Quote from @Ashley C.:

I did answer James. You're very offended, wow. I've got to go take care of some HUD tenants James, sorry I didn't answer the question to your satisfaction, I can imagine that must be frustrating for you to think that I have to do something to the level in which you require in order to be sufficient. I exist, so do my experiences, please stop trying to invalidate them because it doesn't please you or support your claim.

 It's a simple question. What's the number?

[Joe S.]

@Ashley C.

I see you are in Jackson Mississippi. I considered buying there before, but I did not have the team I felt needed as an out-of-state investor.  i’m assuming you have some sort of business there or part of someone else’s business. Are you selling properties mainly are you part of a management team etc.  What services are you offering if someone was interested in section 8 in Jackson Mississippi?

@Jay Hinrichs used to be familiar with Jackson if I remember right. 

[Ashley C.]

PM, sales, rehab, marketing, everything. One stop shop. HUD pre inspection, marketing, whole in and out flow. And we're good too.

[James Wise]

Quote from @Ashley C.:

PM, sales, rehab, marketing, everything. One stop shop. HUD pre inspection, marketing, whole in and out flow. And we're good too.

 And there it is. Only people who would say what you've said about Section 8 are either inexperienced, or in this case, selling something using dishonest marketing tactics.

[Ashley C.]

Actually not at all. I don't sell anything, but others that we work with do. You're assuming and being silly again James, but that's okay. You're great at that bud, I guess that's your hobby 😂

[Ashley C.]

@Joe S. if you want to have a conversation please pm me where James can't rudely encroach. Happy to help.

[Julie Philpott]

I have not personally owned any Section 8 properties. However, from the perspective of the tenants I know, including friends and family who are Section 8 tenants, I have observed some concerning behavior. There have been stories of tenants intentionally causing damage, such as purposefully leaving a faucet running to increase the water bill and damage the property. Additionally, some tenants have refused to leave the property when their voucher expires, leading to housing court issues. It's possible that they are turning up the heat to the maximum because they are part of a utility-subsidized bill program. However, it appears that they are neglecting the maintenance of the property.

[Ashley C.]

Hi Julie that's very interesting I have not heard of anything like this before. And this is what I was meaning when posting earlier with James is that each person's experiences are different and it may even vary from state to state person to person property to property and neighborhood to neighborhood. In my experiences, Section 8 HUD tenants are very reliable and courteous to the property even in bad neighborhoods, and all tenants that I have worked with pay their own utilities so that has never been a concern, but I can imagine how that would certainly be a nightmare for the owner of a property if that were something that were happening. Thank you very much for the insight and perspective I really appreciate it, I think this thread is going to get interesting.

[Don Konipol]

@Ashley C.

First, thank you for posting about your experience.  Many investors new to Sec 8 possibilities need to hear ALL experiences, good, bad or otherwise. 

I won’t comment on why people can’t disagree without a war as a result, but this seems to be the times we live in - oh well….

My experience differs from yours.  I found that there are some groups of tenants where a higher percentage from that group are likely to handle a property without care, or even with malice.  It may not be a majority of that particular grouping, or even more than a small minority, but it is still a substantially greater risk of damage.

Here’s the crux of the problem with Section 8 tenancy.  To a majority of them a 30hr job at Walmart is a good job. So, they don’t have health insurance, savings, retirement, etc.  Further, many (again may not be a majority, just more than another group) have life’s “out of control”; domestic violence, drive by shootings, kids with gang affiliations.  

Part of the problems landlords have with low income housing is tenants that can't afford the rent, tenants whose life's are out of control, and tenants with mental health and tenants with anger issues. Another part of the problem is the landlords themselves; the landlords buy low income housing for cash flow, and if the property needs repairs, maintenance, capital improvements, they're reluctant to "upset" their expected cash flow by investing in the property. So things constantly break, repairs become more expensive, and in the case of Section 8 HUD with holds rent until repairs are made.

[Derrick E.]

Ok. I have section 8 rentals as well as non section 8 rentals. There are good and bad tenants in each category.

No one can logically say Section 8 tenants overall are better than regular tenants. There’s a reason they are section 8. I know that will upset some people but it’s true.

HOWEVER, there are some really good people and really good tenants on section 8. I just screen these tenants a little better. I come from that lifestyle so I know and understand their struggles and mentality. Maybe that’s why I have had success with it, I’m not sure.

I have some properties that I would NEVER rent to section 8 tenants because they are way too nice for that kind of risk.

I agree that a lot of people buy section 8 properties then keep them as a dump. You know what happens, you get the worst of the worst section 8 tenants. I completely remodel my properties when I buy them, even section 8 properties. I put regular laminate countertops etc in them as they will be cheaper to replace, but the homes are nice section 8 homes. Because of this I get a lot more interest and I’m able to get the better class of section 8 tenants. So far so good for me. 

I have no data, but from my experience this is the key to section 8 rentals, buy and update a home which will attract the better quality section 8 tenants. Some of my section 8 tenants also have jobs. 

[Peter Stewart]

100% agree with this! Thank you for speaking up, people need to hear this info - too much misinformation out there about sec 8. 

[Ashley C.]

This is all fantastic I love everybody's enthusiasm about this thread! This is what I was hoping to prompt was for many people to be able to speak their minds about their perspectives and experiences because it does vary based upon where you are and the way that you do things. Personally in my experiences we have worked with many Section 8 tenants and we have learned to be able to as you stated screen them a little bit better and root out the good from the bad so that you do have a good experience with a Section 8 tenant. There are a lot of great things that come with renting two Section 8 tenants like an annual guarantee of income once you get a negotiated price on a contract with HUD but this does not negate the fact that there is good and bad to everything and whether that be a cash pay tenant or a Section 8 tenant, it's ALL about the way you do business, and whether or not you have experience to be able to recognize the way that certain things should or should not be handled so that you end up benefiting from the situation instead of losing.

let's keep this thread going, if anyone else has any other insights please continue to post this is a great thread because there is a lot of general misconception about Section 8 HUD tenants, properties, and investors, it is certainly a niche market so to speak but if you know what you're doing it can be extremely lucrative.

[Rob K.]

So here is my experience with Section 8 rentals:

1) Inspections result in me having to repair or fix issues which should be on the Tenant. The classic one was Tenant leaving huge amounts of grease in kitchen, inspector requires landlord to clean it up.

2) Tenant vacates the unit without notice early in the month. Local Housing Authority demands I reimburse them for rent paid for the month. When I refuse, I get collection notices for years.

This was a long time ago, but as one might surmise, it has been a long time since I had a section 8 tenant.