Section 8
What are some pros and cons of having section 8 (gov't subsidized) properties?
I have found a townhome for sale for 30K. The property manager and hoa fees are $339. Property taxes at $40 per month. I'd put down 20%. Place is rented until July 2005 for $675 a month thru Section 8. Anyway, I'd cash flow around $200.
With property inspection going well and all the other due diligence why would one avoid section 8?
Oh there are lots of reasons to avoid Section 8.
For starters the program is run by government bureacrats who have their heads located in places where there is inadaquate solar radiation.
Second the tenants are paying very small rents and expecting very large services.
Third the tenants tend not to be terribly desirable for a host of social reasons.
Personally as long as you screen your tenents well I think Sect 8 is great.
-Rents are on time every month
- If they screw up or damage the house, or get in trouble for drugs etc. they can get thier Sect 8 revoked.
-Large pool of renters to choose from usually.
There are downsides of course but I think there are to every type of renter
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I've had some Section 8 rentals and have had mixed results...dependable income, not quite at top of the local rental market, but OK.
One key thing to understand and remember though is that YOU need to screen & know your tenants.
Although tenants are pre-approved by local housing authority, there are some real losers in the bag, and I've had some of these along with OK ones.
Even after they're in the RE, I"d keep an eye on them and make sure they're treating your RE OK.
I had a female tenant who decided during her stay in my house to go into drug business and really messed up the property. Cost us a bundle to rehab.
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Thanks for the helpful replies. Sec 8 isn't what I was originally thinking about for REI, but the numbers seem so solid.
I'm trying not to suffer from "analysis paralysis" though and overthink it.
I've been curious about Sec 8, as well, and the question I have is: how easy/difficult is it to get rid of a Sec 8 tenant gone bad?
Thanks,
Bob
No different getting rid of a Sec 8 tenant or a non Sec 8 tenant, you go thru eviction process. Sec 8 also has rules that must be followed by the tenant. If they don't follow the rules Sec8 will drop them. Sec 8 has been good for me....
What kind of paper work do you have to fill out in order to accept section 8 tenants? This is what I am thinking of doing. I have a person interested in doing a lease option for my property. They are on section 8. What paper work do I have to fill out in order to accept section 8 tenants?
Section 8 has been nice to me, as well!!
I have had a section 8 tenant for a year now and I have never gotten a late payment (from the city or the tenant), there are regular inspections of the property but as long as its in decent shape there are no problems, and the rents are just below average, but not by much... I have nothing to complain about!!
Good Luck!
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I had my first Section 8 approved for rental on May 11 (with approved tenant already in place) Today is July 27 and I still have not received payment from the government. Multiple telephone calls have only yielded frustration. I am not concerned that they will not eventually initiate payments but dealing with the government can be testing to say the least. To answer the question about paperwork... it is minimal in Alabama but the required inspection is tough. I am considering a deal on my desk right now for purchasing a group of 25 Section 8's. So I guess I have not been too discouraged.
I have many section 8 tenants and so far I have been very pleased with the program. The government check arrives on the second or third of the month as regular as clockwork.
One issue that may be negative is that there has been a cutback in the program to fund homeland security. In one area where I invest the level of support has dropped from a maximum of $800/mo for a 2/1 to $725/mo. This does not impact my current tenants, but if they move they get reduced support. the reduction also applies to new families coming on the program.
The care and feeding of the section 8 program is fairly minimal for a property owner. There are annual inspections and there is a contract that attaches as an addendum to the lease.
Regards,
Ed
In Mn, the inspections are thorough to the point of being stupid. The section 8 inspector would not pass the inspection because a light was burned out. I did not have a light bulb to replace the burned out one, so they rescheduled for another time. That time I brought a bunch of bulbs, in case another burned out. They did the inspoection, but did not look at the furance. When the city inspected, they looked at the furnance which was leaking CO2. So, the section 8 inspection would have allowed a very hazardous situation to continue...
Other than that, I appreciate the fact that I get paid every month like clock work. The tenant has always paid, and has been good. All in all, it is up to the landlord to do the background checks.