The Advantages of Section 8 Rentals

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I felt out of place the first time I walked into the Section 8 office. It didn’t help that the line was long and the lady at the counter actually called me up from the way back to skip everyone and come to the front of the queue.

Despite the awkwardness of my first visit, I now know the lady behind the counter can find the right paperwork and know how to talk to potential tenants. If you are thinking about buying Section 8 rentals and are apprehensive about the whole ordeal, take a trip to your local Section 8 office, introduce yourself to the staff and get a feel for the place.

No matter whether you are skittish or excited about the concept of Section 8, below are some reasons to consider government subsidized housing rentals:

Reasons You Should Buy Secion 8 Rentals

1 – The Check’s in the Mail

Hands down, the best part about leasing your property through Section 8 is the regular checks that come in like clockwork.

2 – Easy Marketing

Forget the newspaper ads. If you want a Section 8 tenant, march down to your local Section 8 office and get your property added to the list. If you have a four bedroom, you can put your property on the four bedroom list. If you can go a bit lower on your rent, you can also market your four bedroom on the three bedroom list. Some cities have their property lists online but my city has a photocopied list that gets updated once a week or so. When you get the list, note the rents for the competing properties to make sure your rent is in the ball park.

3 – More Easy Marketing

Take bulletin board flyers with you to the Section 8 office. I like to print my phone number vertically on the bottom and cut out the strips to make it easy for prospective tenants to pull off a number. With permission from the office, place flyers on every bulletin board in the building.

4 – Even Easier Marketing

Section 8 has a class for people who have recently received new vouchers. Find out the times for the new voucher classes. Show up at the Section 8 office 30 minutes before the meeting and hand out your flyers. Get over any shyness. Go up to strangers and say “Do you know anyone looking for a three bedroom?” Most people know someone and will take a flyer. Some will be interested themselves. Double check with the powers that be (usually the gatekeeper at the counter) to confirm that they are okay with you passing out fliers. Some cities will actually invite landlords in at the end of the meetings; other cities aren’t as accommodating.

5 – The Experience

Working with tenants can be rewarding. I once noticed that one of my Section 8 tenants had a daughter sleeping in a sleeping bag on the floor. I contacted a local church that provides beds for needy families and had them deliver one to the family. Like me, you might discover a kid who would love your used books or a high schooler who needs advice about applying for college.

If you have a lower end rental or are thinking of buying one, look into the possibility of renting through Section 8. Steady rent payments and low cost marketing are just a few of the reasons to at least explore the idea of buying a Section 8 rental.

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About Author

McKellar Newsom invests in single family properties in seven different markets. McKellar partners with investors who don't have time to devote to real estate investing.

15 Comments

  1. What a great post McKellar. So many landlords especially if they are new, are apprehensive about renting to section 8 folks. I believe that if you thoroughly screen them, they are no different than any other tenant. On the upside, they can get thrown out of the program if the don’t follow the rules.

    • McKellar Newsom on

      Hi Sharon,
      Thanks for you comments. One of the rules I’ve seen broken is having extra tenants in a property. What rules have you seen broken? Thanks. mck

  2. McKellar –
    I would add to the list of advantages that your tenants really need to be on the ball with their portion of the rent and need to take care of business as well, otherwise they can get thrown out and that is something that most in the program do NOT want.

    • McKellar Newsom on

      Hi Josh,
      Great point. Tenants are focused on keeping their subsidized rent and will more likely than not pay their portion of the rent. Thanks. mck

  3. Currently having both sec8 and traditional rentals, I will say experiences vary. My experience has been very poor. The Denver Sec 8 office is terrible to deal with, rents have not been guaranteed, rents are lower than what I can get outside the program. It has cost me several thousand dollars in inspection delays, false or ridiculous inspection findings, rent payments sent to wrong property managers etc etc. They lowered market rents for Sec8 homes in the Denver metro area despite record low vacancies and increasing market rents.

    One local sec 8 office lost a fairly bad lawsuit because they gave owners information to tenants including social security numbers. I simply can’t justify sticking with the program.

    I don’t discount folks looking that way, but buyer beware. Not all sec 8 offices are the same.

    • McKellar Newsom on

      Hi Jason,
      Thanks for your comments. I agree “caveat emptor.” I’ve already outlined my next article titled: “The Disadvantages of Section 8.”

      I’d like to hear more about the ridiculous inspection findings. I’ve been lucky so far in that area.

      I’ve had experience with your other points. We actually had one local Section 8 official who embezzled some government funds.

      Thanks. mck

      • I average around $200 per home on annual inspections. From towel racks knocked off to dirty ovens. Some hit items I appreciate as they are good repairs, others I look at them and say, I’m not the tenant’s maid, they clearly have cleanliness spelled out in the contract.

        On my most recent rental, they delayed the inspection nearly 4 weeks. 2 More weeks for a reinspect on a recently remodeled home. No rent during that time. They took 4 months to cut me my first check. Can’t evict for failure of Sec 8 to pay. Then after the tenant moved in I was informed that the tenant no longer qualified for the the full rent and it would be dropped $75/mo. After 3+ months of no rent, I took the bird in hand. To top that off market rents are around $1300 now in this area. The most they will approve is $1150, calling that the market. So yes, I will be leaving the program after this tenant moves.

        I look forward to your next post. You have some good points on the positive side.

        Jason

  4. very interesting points about sec8 rentals. i have never delved into them before with my property company, but you give some compelling reasons why it might indeed be a good idea.

    • McKellar Newsom on

      Hi Tyler,
      Thanks for your comments. I’ve already outlined my next blog “The Disadvantages of Section 8″ so please read it too to see the other side.

      I obviously like Section 8 but there are also things I don’t like about the program. Thanks. mck

  5. Hi McKellar

    Great article. I look forward to learning more! There are positive and negative in nearly everything we are doing in our lives, but I think with the HUD there are more Positive for sure.

    Wendy

  6. Mckellar,
    Thanks for this article & I’ve learnt a lot from it. I have 3 section8 tenants and apart from my first inspection, the others has really been a smooth journey for me. The staffs at the section8 in my county are far nicer than I was made to believe when I was going into the program.
    I’ve had my check delayed once because they sent my letter to the wrong landlord.
    Looking forward to reading your next article.

    • McKellar Newsom on

      Thanks Tracey. The inspections and reinspections can take some time and make your turns longer.

      Section 8 staff members are stretched pretty thin in most places. Accounting errors do occur. Thanks again. mck

  7. In my town there is a complex of what I would call “nice” section 8 apartments built about 6 years ago, and another being built a few miles down the road in a neighboring community. Are you familiar with this type of sec 8? They don’t advertise themselves as section 8, but they have maximum income limits to live there, and almost all of the tenants are sec 8. From what I can tell, most people who live there stay for quite a while, do what they need to do, etc.

    • McKellar Newsom on

      I’m guessing that the section 8 apartments have some sort of forgiveable loan from a grant.
      If you are interested in these types of grants, start googling grants for multifamily housing and you can probably find some in your area. There is a lot of paperwork involved and many need you to have a property already under contract. Try to find someone who has a grant in your area who can walk you through the process. I’ve seen some forgiveable loans that end in as little as 10 years.

      Try the tax assessor’s records to find the number for the owner of the properties. See if you can invite the owner to lunch. mck

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