I have seen ads in local papers for properties w/Sect. 8 tennants? Exactly what is a Sect. 8 tennant? Are they good or bad to have when examining a prospective deal?
Section 8 is a government subsidized housing program available in most cities across the country. Each individual area is run by the Housing Authority. If you contact the HA they can provide you with a ton of information about the program and how to get started. Most offer seminars and have advisors to answer all your questions.
The good news is: most of the rent can be direct deposited by the government on the first of the month. The remainder you need to collect from the tenant like any other rental property. They also tend to pay about 10-15% over normal market rent.
The bad news is: There is a lot of paperwork to fill out, and like every government agency things are slow to start up. You also have a higher probability of finding a bad tenant. This is not necessarily a problem, as long as you screen your tenants very carefully. I would not fill my rental property with the first person that applied, unless the met strict guidelines.
All in all, I think you can make a fortune with Sec8 if you play your cards right.
-Chris
[addsig]
I have many section 8 tenants. You will find the good and the bad. I have many of my tenants who have lived in my houses for 25 years and longer. Section 8 tenants tend to stay longer. My average has been over 10 years. I like to own most of the houses in the community,this gives me more control over what happens there. You have to set up strict rules and enforce them.
All in all, would any of you that responded say that the paperwork and increased possibility of a "bad" tenant is worth the increased revenue that is available with sect. 8? Like I said, I have seen some properties out here that already have sect. 8 tenants in them but just wasn't sure if it was something that I wanted to pursue.
Yes, but I don't think the major draw is the extra 10-15%, I think it is the gov't check on the first of the month. As far as paperwork is concerned, the advisor at the HA was nice enouch to do it for me
Scoot - Try a search for "section 8 Arizona" in one of the big search engines. I found the section 8 webpage for Indiana this way, a ton of good info on their website, I imagine Arizona has the same. (just checked, they do, but I can't post websites yet, still a newbie!)
Just my 2 cents.... Most section 8s are a lottery and very hard to come by for tenants. (the luck of the draw) I also know that there are stringent rules they must abide by to keep there grant. This would also make them good tenants . Like every one else you get the good with the bad, it is a lottery up north.
Section 8 has its merits and can have its share of problems too. The steady payment of rent from the Housing Authority is the best part. Try to get in a position where the debt service is covered by the Housing Authority so that if the tenants rent is not forthcoming, your not upside down on the mortgage. We have to chase one of our tenants now & then for their portion of the rent but the the Section 8 portion easily covers the debt service so we can work a payment plan the tenant to catch up as needed without feeling the crunch. It is very important to screen the tenant first. Also its VERY IMPORTANT to talk with other investors in your area as certain housing authorities and housing courts are more friendly to landlords than others and an uncooperative or unreasonable authority or judge can cost you a geat deal of money & time. In my prior life as a property manager I had over a 1000 units of section 8 throughout MA and I saw 1st hand the difference (& cost) from one city or town to the next.
Quote:
On 2004-03-08 17:53, scootb wrote:
I have seen ads in local papers for properties w/Sect. 8 tennants? Exactly what is a Sect. 8 tennant? Are they good or bad to have when examining a prospective deal?
Scootb,
I have all section 8 tenants. In my area section 8 housing is highly recommended because of the drug use and drug dealing in Pgh. We do have a code that must be reviewed every year. The inspector comes and does a complete inspection and all violations must be fixed. I have never had any problems. But I keep my properties as if I had to live there.
I do get a 1099 at the end of the year. I get one check a month. If the tenants don't fill out the paperwork on time your check is held up. That is why most people don't like section 8 in Pgh. But the inspectors and caseworkers are only doing their job.
I had one tenant for 12 years in one place and never had a problem. Everyone has their own opinion. If the tenants get caught with drugs or doing illegal things they get thrown off for life. So thhat alone makes people more responsible. Some just don't care. I like the concept. I don't have to worry about the income because the exact amount is in the 1099 and I just have to give it to my accountant.
At least in my area. The case worker is not allowed to tell you much. Not how well they take care of a place. The most I will get after years with same inspector is this one should be OK if it is a great tenant. If it is a bad one she just says I should check out my tenants myself. If you can make a excuse to stop by thier current address you can get a idea on how well thier housekeeping standards are. Or you might find broken down cars and washing machines in the yard for the drug dealer to have a place to sit..
All I know about them is that the government will give you a guarenteed check every month, and not the tenant.
Section 8 is a government subsidized housing program available in most cities across the country. Each individual area is run by the Housing Authority. If you contact the HA they can provide you with a ton of information about the program and how to get started. Most offer seminars and have advisors to answer all your questions.
The good news is: most of the rent can be direct deposited by the government on the first of the month. The remainder you need to collect from the tenant like any other rental property. They also tend to pay about 10-15% over normal market rent.
The bad news is: There is a lot of paperwork to fill out, and like every government agency things are slow to start up. You also have a higher probability of finding a bad tenant. This is not necessarily a problem, as long as you screen your tenants very carefully. I would not fill my rental property with the first person that applied, unless the met strict guidelines.
All in all, I think you can make a fortune with Sec8 if you play your cards right.
-Chris
[addsig]
I have many section 8 tenants. You will find the good and the bad. I have many of my tenants who have lived in my houses for 25 years and longer. Section 8 tenants tend to stay longer. My average has been over 10 years. I like to own most of the houses in the community,this gives me more control over what happens there. You have to set up strict rules and enforce them.
All in all, would any of you that responded say that the paperwork and increased possibility of a "bad" tenant is worth the increased revenue that is available with sect. 8? Like I said, I have seen some properties out here that already have sect. 8 tenants in them but just wasn't sure if it was something that I wanted to pursue.
Yes, but I don't think the major draw is the extra 10-15%, I think it is the gov't check on the first of the month. As far as paperwork is concerned, the advisor at the HA was nice enouch to do it for me
-Chris
[addsig]
Scoot - Try a search for "section 8 Arizona" in one of the big search engines. I found the section 8 webpage for Indiana this way, a ton of good info on their website, I imagine Arizona has the same. (just checked, they do, but I can't post websites yet, still a newbie!)
Just my 2 cents.... Most section 8s are a lottery and very hard to come by for tenants. (the luck of the draw) I also know that there are stringent rules they must abide by to keep there grant. This would also make them good tenants . Like every one else you get the good with the bad, it is a lottery up north.
JnJ
[addsig]
Section 8 has its merits and can have its share of problems too. The steady payment of rent from the Housing Authority is the best part. Try to get in a position where the debt service is covered by the Housing Authority so that if the tenants rent is not forthcoming, your not upside down on the mortgage. We have to chase one of our tenants now & then for their portion of the rent but the the Section 8 portion easily covers the debt service so we can work a payment plan the tenant to catch up as needed without feeling the crunch. It is very important to screen the tenant first. Also its VERY IMPORTANT to talk with other investors in your area as certain housing authorities and housing courts are more friendly to landlords than others and an uncooperative or unreasonable authority or judge can cost you a geat deal of money & time. In my prior life as a property manager I had over a 1000 units of section 8 throughout MA and I saw 1st hand the difference (& cost) from one city or town to the next.
Quote:
On 2004-03-08 17:53, scootb wrote:
I have seen ads in local papers for properties w/Sect. 8 tennants? Exactly what is a Sect. 8 tennant? Are they good or bad to have when examining a prospective deal?
Scootb,
I have all section 8 tenants. In my area section 8 housing is highly recommended because of the drug use and drug dealing in Pgh. We do have a code that must be reviewed every year. The inspector comes and does a complete inspection and all violations must be fixed. I have never had any problems. But I keep my properties as if I had to live there.
I do get a 1099 at the end of the year. I get one check a month. If the tenants don't fill out the paperwork on time your check is held up. That is why most people don't like section 8 in Pgh. But the inspectors and caseworkers are only doing their job.
I had one tenant for 12 years in one place and never had a problem. Everyone has their own opinion. If the tenants get caught with drugs or doing illegal things they get thrown off for life. So thhat alone makes people more responsible. Some just don't care. I like the concept. I don't have to worry about the income because the exact amount is in the 1099 and I just have to give it to my accountant.
Lori
[addsig]
I have sec. 8 tenants and I like getting to paymants every month on time. Just make sure you sceen them.
Quote:
On 2004-03-09 19:18, ant2794 wrote:
I have sec. 8 tenants and I like getting to paymants every month on time. Just make sure you sceen them.
What is your reasoning for screening them?
The housing authority caseworker has their whole background. We already know they have issues. What kind of screeing do you do?
Lori
[addsig]
At least in my area. The case worker is not allowed to tell you much. Not how well they take care of a place. The most I will get after years with same inspector is this one should be OK if it is a great tenant. If it is a bad one she just says I should check out my tenants myself. If you can make a excuse to stop by thier current address you can get a idea on how well thier housekeeping standards are. Or you might find broken down cars and washing machines in the yard for the drug dealer to have a place to sit..