Looking for some advice on Section 8 investing in SC?

[Michael Bishay]

Hello all, 

New to the forum and looking for some insight. =) 

Looking to start investing in Section 8 and was wondering if anyone had any horror stories, success stories or advice on where to start. 

Or if anyone has a better place to start. 

Much appreciated my friends!! 

[Andrew Postell]

@Michael Bishay ok, so this is a question that won't be too much different than other "non-section 8" questions.  

Generally speaking, we would encourage you to screen your tenants - whether they are section 8 or not.

We would encourage you to collect a deposit - whether they are section 8 or not.

A tenant can certainly be a "good" tenant or a "bad" tenant - whether they are section 8 or not.

Now, if you are targeting lower valued homes...there are "pros" and "cons" to doing that - whether you are renting to section 8 or not.  

So some of these things are universal questions.  The TRUE differences to know about renting to section 8:

1. Your home has to pass an inspection - the inspection isn't difficult and you can reach out to The Housing Authority of the City of Charleston to see the specifics on it.

2. Your rents are always on time - at least, the portion that is covered by Section 8.  Section 8 can provide someone with a "partial" amount.  So they would cover part and then your tenant would cover the rest.  The portion covered by Section 8 is always on time.

3. Higher Rents? - Sometimes you can even charge MORE for this type of rent. The more bedrooms, the more you can charge. Check out this HUD website HERE for more information on it.

Now some people might say "Section 8 tenants are more risky"...but that is NOT the case.  An UNSCREENED tenant is more risky.  For Section 8, if they damage your property they will LOSE their Section 8 money.  And Section 8 isn't really bringing out more vouchers right now.  So there is a big incentive to make sure that they are good tenants with you - or else they are out entirely.

I hope all of this makes sense how I am describing it.  Feel free to ask anything additional if you need.  Thanks!

[Michael Bishay]

Quote from @Andrew Postell:

@Michael Bishay ok, so this is a question that won't be too much different than other "non-section 8" questions.  

Generally speaking, we would encourage you to screen your tenants - whether they are section 8 or not.

We would encourage you to collect a deposit - whether they are section 8 or not.

A tenant can certainly be a "good" tenant or a "bad" tenant - whether they are section 8 or not.

Now, if you are targeting lower valued homes...there are "pros" and "cons" to doing that - whether you are renting to section 8 or not.  

So some of these things are universal questions.  The TRUE differences to know about renting to section 8:

1. Your home has to pass an inspection - the inspection isn't difficult and you can reach out to The Housing Authority of the City of Charleston to see the specifics on it.

2. Your rents are always on time - at least, the portion that is covered by Section 8.  Section 8 can provide someone with a "partial" amount.  So they would cover part and then your tenant would cover the rest.  The portion covered by Section 8 is always on time.

3. Higher Rents? - Sometimes you can even charge MORE for this type of rent. The more bedrooms, the more you can charge. Check out this HUD website HERE for more information on it.

Now some people might say "Section 8 tenants are more risky"...but that is NOT the case.  An UNSCREENED tenant is more risky.  For Section 8, if they damage your property they will LOSE their Section 8 money.  And Section 8 isn't really bringing out more vouchers right now.  So there is a big incentive to make sure that they are good tenants with you - or else they are out entirely.

I hope all of this makes sense how I am describing it.  Feel free to ask anything additional if you need.  Thanks!

Thank you so much.  Sorry for the late reply, we just had a baby! Do you have any recommendations to what the screening process is like?  Im assuming Credit score, full background check and eviction.  Anything else? 

[Andrew Postell]

@Michael Bishay I leave screening tenants up to my property manager.

[Fiza Ah]

Quote from @Michael Bishay:

Hello all, 

New to the forum and looking for some insight. =) 

Looking to start investing in Section 8 and was wondering if anyone had any horror stories, success stories or advice on where to start. 

Or if anyone has a better place to start. 

Much appreciated my friends!! 

Personally had great experience with Charleston's housing authority. The tenant was inherited though, and apparently absolutely filthy (cockroaches all over the wall). I refused to walk the unit so I had to take my husband's word for it.

This leads me to believe the screening is fairly lax. The list of section 8 tenants is larger than available units, so if you find tenants who meet your criteria, go for it!

[Cristal Smith]

I would love to talk to you more about investing with section 8. I work closely with the Housing Authority of the City of Charleston. 

[Stephanie W.]

Quote from @Michael Bishay:

Quote from @Andrew Postell:

@Michael Bishay ok, so this is a question that won't be too much different than other "non-section 8" questions.  

Generally speaking, we would encourage you to screen your tenants - whether they are section 8 or not.

We would encourage you to collect a deposit - whether they are section 8 or not.

A tenant can certainly be a "good" tenant or a "bad" tenant - whether they are section 8 or not.

Now, if you are targeting lower valued homes...there are "pros" and "cons" to doing that - whether you are renting to section 8 or not.  

So some of these things are universal questions.  The TRUE differences to know about renting to section 8:

1. Your home has to pass an inspection - the inspection isn't difficult and you can reach out to The Housing Authority of the City of Charleston to see the specifics on it.

2. Your rents are always on time - at least, the portion that is covered by Section 8.  Section 8 can provide someone with a "partial" amount.  So they would cover part and then your tenant would cover the rest.  The portion covered by Section 8 is always on time.

3. Higher Rents? - Sometimes you can even charge MORE for this type of rent. The more bedrooms, the more you can charge. Check out this HUD website HERE for more information on it.

Now some people might say "Section 8 tenants are more risky"...but that is NOT the case.  An UNSCREENED tenant is more risky.  For Section 8, if they damage your property they will LOSE their Section 8 money.  And Section 8 isn't really bringing out more vouchers right now.  So there is a big incentive to make sure that they are good tenants with you - or else they are out entirely.

I hope all of this makes sense how I am describing it.  Feel free to ask anything additional if you need.  Thanks!

Thank you so much.  Sorry for the late reply, we just had a baby! Do you have any recommendations to what the screening process is like?  Im assuming Credit score, full background check and eviction.  Anything else? 

 If you are working with section 8 voucher’s recipient they most likely not the greatest profile on paper. The sell that  non-profit agencies do is that there is on-going support for these recipients to improve their credit. Again section 8 recipient are supposed to have high barriers to housing such as a permanent disability or something else. Suggestion: meet with the tenant and their case manager. You get a sense of the person. Btw im speaking from experience in Los Angeles CA. 

[Drew Sygit]

@Michael Bishay you're mistaken if you think buying S8 rentals will make your portfolio easier to manage and more profitable.

You're just trading one set of problems for another.

But, you probably won't heed this advice:(

So, yes, seeing if/how any Class C tenant has trashed their current home, will give you an idea of if/how they will trash yours is a great screening tool.

We've been doing this for almnost 2 decades.

The COVID mainstreaming of Zoom has made it so much easier!

There's your hint...