Hi Cain!
***Just my experience, not legal advice.***
S8 tenants tend to beat the ever loving crap out of properties! While yes, they do "play by the rules", there are tenants that are on S8 for a reason, and then there are S8 tenants that are "short term-ers" because of hard times. Unfortunately, you never really know which one you've got, as their landlord verifications are pretty much useless - and credit checks are useless, if they had good credit, they wouldn't have S8!
The only real way to screen is by their background check. If an S8 tenant has any kind of criminal record, they don't get in. Period. Again, that severely limits your S8 pool, as most of them have some kind of felony/misdemeanor/etc.
I've had four properties on S8, two in the ghetto, one a 93 unit apartment complex bordering the ghetto, and one a nice duplex nowhere near the ghetto.
The apt. complex was clea, but no frills. We had no dishwashers, no garbage disposals, and never had any issues. I'm used to replacing carpet, and re-painting when tenants move out; but replacing cabinet hinges, toilets, and rescreening back porches is ridiculous.
The ghetto properties were glorified s**t piles - we rehabbed them enough to get S8 tenants in, and expected them to get beat up. The tenants stayed for 2-3 years, the median rent was $750, and we were getting $1,250. Every time a tenant moved out, we put new doors on the IKEA boxes, changed the carpet, repainted, and sometimes had to pull the toilets because the kids would break the flange.
Finally, the nice house (relative owned). We put an S8 tenant in because it was 2007, and the owner was scared to death he was going to lose the place as he couldn't afford the mortgage without a tenant. Fast forward to 2016 - the gal is STILL there. The only reason for that is the owner can't afford to evict her, AND rehab the property to get in a real tenant.
The carpets have been destroyed (we're not talking about crappy builder's carpet either, this was residential grade, 20+ yr. IF you take care of it carpet), there are cracks in almost every single tile, we've replaced all appliances once, and the tenants are complaining about issues I don't even have with my ten year old fridge! The walls have been dinged up to the point where my contractor has told me it's cheaper to put new sheets in versus patching every hole. The cabinets have to be replaced, between water damage from their carelessness, and neglect, both bathrooms, and the kitchen are a full gut.
Their co-pay is $125/mo., they ALWAYS have an excuse as to why they can't pay it on time, but the recycle bin is continuously full of empty Colt45, they always have enough cigarettes, and there's a different car in their driveway every couple months.
We got $250/mo. over market rent when they moved in, but because S8 doesn't adjust that often, and the condition, we've been denied twice to increase their rent - and are now almost $200 below monthly market rent. The owner would have to put almost $25,000 into the place to bring it back to market at this point, so we continue to deal with the tenant from hell.
Long story short, TO ME!, S8 is NOT worth the aggravation the extra few dollars bring. Either you pay it to yourself because of the aggravation, or you put it back into the property because the beat the crap out of it. I go with conventional tenants now, and almost never have any headaches like I did with my S8 people.
-Ben
