Quote from @Tyler Lingle:
Would you treat a rental nice if you had it paid for by the government? IMO Section 8 is only something to do if you support the cause, low income housing. Otherwise it is a short term cash flow play for long term asset depreciation and lots of turnover.
Hi Tyler, I am curious how many Section 8 tenants you have had 1s hand knowledge of? I have almost 40 years of experience. The average tenancy is 3 to 5 years and then over 50% move into one of our other properties. Our attorneys tell us we have a significantly lower eviction rate than PM's in the same neighborhoods. The key is understanding how to properly screen and also how to manage. Now comparing a C class home with a B class of course the C class will have a higher repair factor but that is across the board no matter who the tenant is. C class renovations are of less quality than a B ( The cheap Lowes Commodes vs a decent American Standard for example) and in many Indy areas the C class homes we always a C class area and the original home was built cheaply. I have been a speaker for HUD out of the Washington DC office on Landlord issues with local housing authorities. At one symposium I was asked what is the difference between a Non Section 8 tenant and a Section 8 tenant. My answer was simple. "LUCK" if we are talking about a lower economic person all things being equal they come from the same tenant pool. As far as would you treat it nice if it was being paid for by the government.. yes, for many of these tenants this is the nicest home they have ever lived in and many keep the houses very nice. We just had a tenant move after living in the home since 2014. All we had to do was wipe down the walls and clean the carpet. Yes, cheap builder-grade carpet that after 8 years was still in good shape. Is this the exce[tion/ Of curse it is but I have lots of stories of how the tenants treat the home just like they own it. I do not see that very often in B-class rentals. I have more issues with prospective owners calling and saying they have a house they cant rent and want to use Section 8. When I ask where it is and why that cant rent it, I usually find it is either in a bad location or needs a lot of work. I also have clients that say why should I make the repairs. What do they expect for free? But yet the rent is paid in full every month so they expect the same as any other expects and deserves. Are they all fantastic tenants? No, but neither are all market tenants. Landlording is not a science, it is an experienced-based business. My almost 40 years of experience with Section 8 have proven that I have been very successful by renting to Section 8 tenants. In my personal residential portfolio, over 95 % of the C class units ( over 50) are Section 8. Currently, the rest started out as Section 8 but their income now exceeds the maximum limits. Treat the customer with respect, provide safe and desirable products, purchased at the right price and condition, provide quality management and anyone can be successful no matter what the product or market.
