Is section 8 a good first time buy?

Question

Listening to bigger pockets section 8 has been reported as recession proof. Does anyone have positive or negative thoughts about section 8? Thinking about first buy in section 8.

Drewy Osazuwa · Answer

Ned said it all, I'll like to add although they do not screen their tenants, you can do a good job screening your own tenants, I only do section 8 / voucher tenants, I take it on myself to do a home visit for all my tenants, I never let a tenant move into my property without a home visit of their current residence.

@Ned i use to get you wholesale deals in the past, they stopped coming what happened?

Patti Robertson · Answer

I love SEC 8, especially in a market like today where renters income can be unstable. It’s basically rent insurance for the landlord - for free. If you search BP for SEC 8 you will find hundreds of thousands of posts. The topic comes up ALOT. My poor fingers got tired of typing the same thing over and over, so I put my tips and tricks in a blog post. Here’s a link if you want to check it out.

https://www.biggerpockets.com/blogs/9232/55313-intro-to-section-8---your-perceptions-vs-my-realities

Ned Carey · Answer

I agree with @Drewy Osazuwa My company does a visit to a prospective tenants current residence before accepting them. This is probably one of the most important screening tools you can do.

I disagree somewhat with Steve Morris.  Yes Section 8 has many regulations.  But there are lots of rules and regulations over rentals regardless of what type they are. Legal issues are important but rarely talked about here.  If you want to  hold section 8 rentals  you are going to have to learn their regulations eventually anyway.

However to support Steve's point of view, it could be argued that when starting out the fewer regs. you need to learn the better, and you can learn section 8 later.

Ned Carey · Answer

@Steve Emery this can vary by market but I like section 8. The advantage is that the income is guaranteed and shows up on the 1st. (except weekends) every month.

The potential disadvantage is the extra work that can come with section 8. Section 8 takes longer to get a tenant in due to the approval process. They also require annual inspections which can be quite picky. When issues come up they can be hard to reach. These disadvantages and more may be much bigger factors in some areas than others.

An important thing to understand about section 8 is they DO NOT screen the tenants and they are not responsible for tenant damages.

Steve Morris · Answer

For first time buyer, I wouldn't.  There is a lot more complex compliance paperwork you have to keep dependent on how it got into inventory as LIH.

If it's a HUD project contract, I definitely wouldn't unless you have a really experienced PM.

Is section 8 a good first time buy?

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