All Forum Posts by: Jennifer Donley

@Jonathan Hayek, we make it clear from the beginning that the home visit is the last piece of our screening process.  I don't mind the applicant having a lot of lead time because I figure if they can clean up well enough to pass the home visit, they can clean up well enough to get their security deposit back (which is my goal for the tenants and I tell them this when I collect it).

I find with the home visit that people live how they live and generally you can tell if they live clean or they live dirty, no matter how much lead time they have.

I can't recommend this step in screening enough - it is a game changer.  

@Jack Langfald, welcome!  I'm in St. Louis and have a portfolio of Section 8 properties.  I find it to be a great program but tenant screening is key, just like with market tenants.  

It's interesting what @Nathan Gesner said, it hasn't been my experience with tenants I've screened.  There are some processes we've put in place to coincide with Section 8's move out/certification process so that tenants don't leave owing money.

Also, we do a home visit as the last piece of our screening process - at their current home.  Then I know what my unit will look like when the tenants move out and can decide if they're approved or not based on it.

Good luck, feel free to contact me if I can be of further help as you navigate the RE world!

@Brian Bertschi I'm in St. Louis, have a portfolio of Section 8 tenants and teach other landlords to succeed in the niche. As you might imagine, I love Section 8.  I am currently owed $0 in rent and given the difficulty with evictions right now, I think this is a huge benefit of Section 8, among others.

I would echo what the others have said for the most part.  Here, our inspectors are usually very reasonable, although they will almost always find something wrong on the 1st go-around.  For the city HA, they are currently waiving inspections for landlords (due to COVID) who are in good standing, not sure how they are handling new landlords. This speeds up the process.  

We are able to move tenants in within a couple weeks right now if we stay on top of the process, but once they're in, the money comes like clockwork.  I have a lot of tenants who don't pay any of the rent.

I collect $1000 security deposit for all tenants.  It makes it easier than making it the first month's rent because you and the HA will "negotiate" the rent amount so you won't know exactly what it will be until right at move in when the tenant gets the move in slip.

My experience is that good Section 8 tenants expect to a pay a security deposit.

Section 8 does require a little more management because you have a 3rd party involved but not so much that it's  not worth it.  Just follow the processes, respond in a timely manner to tenants and Section 8 requests and communications and you'll be fine.

Feel free to reach out to me if I can help further.

@Rei Reid I have a portfolio of Section 8 properties and self manage.  I actually wrote a blog post about hiring a PM for Section 8 properties because I'm shocked at how few PMs manage them well (at least where I live).  I'm a fan of self management but understand this isn't an option for everyone.

Check out the blog - but in general, if I were going to hire a PM for Section 8 properties, I would ask a lot of questions around their processes specific to Section 8.  I would want to know how many Section 8 properties they currently manage (although I wouldn't hang my hat on this alone - there is a PM company here locally that manages a lot of Section 8 and is terrible at it) and I would request references from 3 Section 8 landlords.

@Mitch Pomeroygood stuff - thank you! I have a much smaller portfolio of Section 8 properties and I love it.  I agree with the other feedback - management makes or breaks Section 8 for landlords.  It is more management intensive but once you learn the processes, you can expect them to be the same every time and follow them to maximize success.

@Jenee Tarpy I have a portfolio of Section 8 properties and love it.  I echo what Mark said above generally.

Given the current economic situation, I think Section 8 is absolutely the way to go in B-, C and D neighborhoods. The best way to succeed is to learn the local processes for yoru Housing Authority and learn how to maximize them.  This includes rent increases, tenant lease compliance, good standing certifications, etc.  If you do that, you can be successful with it.

Feel free to contact me if I can help further.

@Casey CrottyI have a portfolio of Section 8 rental properties in the Section 8 niche and teach other landlords to be successful in it.  

I love Section 8 - I believe that in the right areas, done right, it is the most stable and profitable rental niche out there.   I echo what others have said and the one thing I would add is this - become a NINJA at the Section 8 processes in your area.  There is more paperwork and red tape but it follows the same process every time so if you learn those things, you can be highly successful.

And the added layer of leverage & accountability more than make up for it.

I see landlords hating Section 8 for 2 main reasons - bad tenants (which you've mentioned, can be dramatically reduced through meticulous screening) and bureaucratic headaches (see my advice above).

Good luck, I've written a few blogs here on BP about succeeding in the niche, in case they're helpful to you!

@Jonathan Scheeler I have a portfolio of Section 8 properties in the St. Louis area.  I get 5 to 10 percent more in rent that I would from market tenants.  I'm not exactly sure why but in some areas, this is the case (my properties are B and C class houses/neighborhoods) and it's not unique to my part of the world.  Do a little research and looking around even here on BP and you'll see other people talking about pockets with higher Section 8 rents than market rents.  This seems to be the case more often in B to D class areas than A areas (generally I see that Section 8 rents for A areas are below market rents).

From my experience, the "rent reasonableness" test is what matters for Section 8 rents, up to the FMRs, meaning the HA is going to go off of what's reasonable for the area based on comps, up to the FMRs.  The comps our HAs use aren't accessible to the public (silly) but they are higher than the ones I come up with so I don't complain!

I'd recommend finding a landlord that is SUCCESSFUL with Section 8 in the areas you're in to see what they get for rents (I capitalize successful because I talk to a lot of landlords who hate Section 8 and I don't recommend talking to them).  

@Mark Lewis, I wholeheartedly agree with @Paul De Luca - turning over a property is EXPENSIVE so I try to avoid unless there are majo ongoing late pay issues, damages or other extenuating circumstances.  The issues you're talking about are going to happen with a large portion of tenants out there so you may just be trading one set of issues for another.

Keep in mind with Section 8 that you can and should notify the caseworker of any issues.  In my experience, they won't do anything unless you push it or it's a major concern (illegal activity in the house or eviction for non-payment, for example).  Also, you have an added layer of accountability with Section 8 - the tenant needs to pay arrearages and fix damages before moving from your unit, whenever that is.  After notifying the caseworker of intent to vacate, you should receive a "good standing certification" from the caseworker in which you indicate if the tenant is in good standing or not.  This is your chance to recoup any arrearages not yet paid or any damages not fixed.  The tenant is not supposed to get a voucher to move to the next house until all issues are resolved with you.

@Paul LaForgia Section 8 is my jam!  I have a portfolio of 26 Section 8 properties in the St. Louis area and teach investors & property managers to succeed in the niche.  

It's a great way to go but there is a lot ot learn.  In general, provide a nice unit, show it, screen thoroughly and follow the Housing Authority's processes to be successful.  The better you or someone on your team is with systems and processes, the better your chance of success because there are quite a few to follow.  But done right, I believe Section 8 is the most stable and profitable rental niche out there.  Reach out if I can help further.