I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!
However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas.
Other than making less money overall, some of the other downsides of my S8 experience were the following:
1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them.
2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives).
3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs... most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.
4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable).
Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally.
