Section 8 Investment -Central Florida???

Question

I have a few multi-family properties sent to me by broker that are section 8. I know of no one personally that invests in section 8. Anybody here on BP that has first hand experience in these types of properties? The ones I am looking at are mostly in Tampa/St. Pete area. In my mind, I play devils advocates and think of all the potential problems associated with section 8 tenants. In your experience do Section 8 tenants take care of your units? Do they tend to stay long term? Are there high turnover rate? Do tenants loose Section 8 status easily? Please, tell me all your experience, pros and cons in this subject. I would love to glean from the BP community. Thanks in advance!

Evan Polaski · Answer

When I first got into buying my own rentals, I rented all my properties section 8. Generally, no nightmares, because I told all potential tenants right up front, “I am calling your prior landlords, I will not accept any evictions or criminal background more than the occasional speeding ticket”. This was all on the phone when they called.

From there I had some good long term tenants. All of them were single moms with 2-3 kids that wanted what everyone wants, a nice house in a safe neighborhood. Upside too is these are life long renters, often with prior experiences with terrible landlords, so they don’t bug you for stupid stuff.

As time went on, the annual reinspection lists that they require in Cincinnati got longer and longer and market rents started rising, so I was no longer getting the section 8 premium I was getting I bought the properties.

I am down to one Section 8 tenant left. Rent is pretty solid, and unit will need about $15k of upgrades to get a premium rent, and I just don’t want to tackle it right now.

To answer your question: for me section 8 was fine overall. Dynamics are almost the same as market tenants, you take care of the property and responsive, you can have good, long term tenants. You run it like a slum and you will be turning it over all the time.

Greg Dickerson · Answer

Real estate is hyper local so this will greatly depend on the area and the property. Some are fantastic others not so much. You really need to drill down deep and understand the asset, area, tenants, municipalities and restrictions and controls in place and upcoming. Lots of cities are enacting rent controls, eviction barriers, eliminating background checks etc.