Would you rent to a section 8?
Most Popular Reply
Andrew FidlerBusiness Member
Real Estate Broker · Toledo, OH · Member since 2011 · 384 posts · 434 votes@Sam B. - I have close to 20 sect 8 houses in Toledo...and I only rent section 8.
(My specific niche is owning and renting in poorer neighborhoods, buying foreclosed 3 and 4 br houses for under $20k and renovating them to sect 8 standards. I don't want the common tenant because they can't and don't pay consistently. It's a gun-totin type of area but I'm quite comfortable there and the trouble has never made the mistake of bothering me.
I actually enjoy the sect 8 arrangement because the tenant is being threatened with loss of their voucher by not paying their portion. IF I have a tenant portion of the rent that is unpaid I serve a 3 day and cc their administrator within the program so they know we have had an issue. Typically the tenant runs to "mommy" with big alligator tears and find the money somehow. Water in toledo is actually the larger issue- it must remain in the owned name and with tenants being billed every third month means they never make a partial payment and ignore the $150 bill that comes every three months. THUS I get shut off notices pretty regularly for our houses and forward them to the tenants. Again, the tenants run to the non-profits in the area and cry about how their water is being shut off and they have kids and it magically gets paid.
Entitlement and poverty cycle and my own personal conservative politics aside- the niche needs to be served, the money spends, and any day that the niche changes is the day I will evolve my business model.)
@Jimmy S. - there is a detailed review once you sign that voucher so I suspect the 6 people in a 2 bedroom house will be stopped at that stage. If anything I have to stop 2 br vouchers being submitted for 4 bedroom houses. It sound like you have a damned nice house in a great area...unlike myself you need to consider sect 8 carefully. I like that the woman works, I would have been happy to rent to her...then again I can repair almost any amount of normal wear and tear for $2k in my houses.
Overall sect 8 is a great investment...tenants stay years and years and you have a 3rd party direct depositing to you and making BOTH the landlord and the tenant play by the rules. Still, plan on putting cash into the annual inspection and definitely plan on $20 for lightbulbs and smoke detector batteries. Sect 8 folks exist- they don't improve nor maintain very well. I have taken care of tenant-assigned repairs many times simply because I am fine laying out $50 to collect another $8,400 the next year in rent.
- I actually arranged for one of my guys to drive a tenant to their annual review because they were out of reschedules and I was mailed by sect 8 that they were being kicked off the program if they didn't make a specific meeting. Again- $20 out laid to keep a 3 yr tenant in place...$25,200 had already been paid to me, why not keep the ball in play!!!
All depends on how you want to own and manage, I am fine with a reasonable amount of hand holding...just part of the niche I'm in.
47 Replies
- Memphis, TN · Member since 2013 · 969 posts · 524 votes12y
GREAT POST @J. Martin
You are the man!!! Exactly what I was thinking!!
- Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes12y
@Jimmy S. I'm inclined to avoid S8 for obvious reasons, but if I were to consider a tenant such as the one you've described, I would draw on the family's behavior.
What is her plan for no longer needing S8? How long will that take? If she's serious about "bettering" heself and her children's lives, she should be able to answer this.
What's the father(s) situation. Are the kids from 5 differnet dead-beat fathers who don't pay child support? Or did the lone father prematurely die? The mother's behavior concerning the men she attracts will tell you alot about her character (and the possible men who may end up residing in your property).
What are the children's ages and how do they treat their mother; especially the eldest? A woman who respects people and herself will teach her children to do likewise; and it will show in their behavior.
- 12yAndrew FidlerBusiness MemberReal Estate Broker · Toledo, OH · Member since 2011 · 384 posts · 434 votes
@Sam B. - I have close to 20 sect 8 houses in Toledo...and I only rent section 8.
(My specific niche is owning and renting in poorer neighborhoods, buying foreclosed 3 and 4 br houses for under $20k and renovating them to sect 8 standards. I don't want the common tenant because they can't and don't pay consistently. It's a gun-totin type of area but I'm quite comfortable there and the trouble has never made the mistake of bothering me.
I actually enjoy the sect 8 arrangement because the tenant is being threatened with loss of their voucher by not paying their portion. IF I have a tenant portion of the rent that is unpaid I serve a 3 day and cc their administrator within the program so they know we have had an issue. Typically the tenant runs to "mommy" with big alligator tears and find the money somehow. Water in toledo is actually the larger issue- it must remain in the owned name and with tenants being billed every third month means they never make a partial payment and ignore the $150 bill that comes every three months. THUS I get shut off notices pretty regularly for our houses and forward them to the tenants. Again, the tenants run to the non-profits in the area and cry about how their water is being shut off and they have kids and it magically gets paid.
Entitlement and poverty cycle and my own personal conservative politics aside- the niche needs to be served, the money spends, and any day that the niche changes is the day I will evolve my business model.)
@Jimmy S. - there is a detailed review once you sign that voucher so I suspect the 6 people in a 2 bedroom house will be stopped at that stage. If anything I have to stop 2 br vouchers being submitted for 4 bedroom houses. It sound like you have a damned nice house in a great area...unlike myself you need to consider sect 8 carefully. I like that the woman works, I would have been happy to rent to her...then again I can repair almost any amount of normal wear and tear for $2k in my houses.
Overall sect 8 is a great investment...tenants stay years and years and you have a 3rd party direct depositing to you and making BOTH the landlord and the tenant play by the rules. Still, plan on putting cash into the annual inspection and definitely plan on $20 for lightbulbs and smoke detector batteries. Sect 8 folks exist- they don't improve nor maintain very well. I have taken care of tenant-assigned repairs many times simply because I am fine laying out $50 to collect another $8,400 the next year in rent.
- I actually arranged for one of my guys to drive a tenant to their annual review because they were out of reschedules and I was mailed by sect 8 that they were being kicked off the program if they didn't make a specific meeting. Again- $20 out laid to keep a 3 yr tenant in place...$25,200 had already been paid to me, why not keep the ball in play!!!
All depends on how you want to own and manage, I am fine with a reasonable amount of hand holding...just part of the niche I'm in.
- Investor · Chicago, IL · Member since 2013 · 451 posts · 96 votes12y
YES
Due Dillegece still applies. Landlords just accept for the money or deny for the rules or deny due to wrongfully stereotyping the type of person that would have a voucher.
Have your section 8 standards for who you would rent to. If your place is kept like it should be you've bypassed most of the rules.
You have a leg to stand in because you have a greater chance of getting paid and armor to fight with because the tenant doesn't want to jeopardize their voucher.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes12y
I mis-posted earlier when I said we were down to 2 S-8 tenants. We are at 3. One tenant gets a grand total of $0.00 from S-8. Yes, she has been back working and from what I can see our last S-8 payment was November 2013. She has maintained (more or less) payments since then. She is a 10 year tenant. Is she struggling a little? More than a little. Will she 'make it?' I hope so. She paid $500 yesterday. We work with her as we do with the other long term S-8 tenant. We are down to a couple. Sometimes humanity trumps a few bucks in business. We could raise the rent or get rid of S-8 all together, but we aren't in a hurry to do so, as long as we have these tenants. S-8 income is not material to our business. We will eventually be out of S-8, but these tenants take pride in where they live and it shows in how they maintain their residence. So we carry on...
- Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes12y
We had one experience with an S8 tenant and hope it's our last. Her entitlement attitude was off the charts, although she was a meticulous housekeeper. She once said she knew she should be working (she was in her early 30s, had one school-age child, and spoke 2 languages), but "didn't feel motivated".
She had no fear at all about losing her voucher, moving family members in and out of the house, and her final act of defiance was getting a pit bull. We served her with a Cure or Quit notice and copied her caseworker. The dog disappeared for a month or two, and her lease was expiring in another month or two after that. She actually told *us* that she wouldn't renew her lease unless we let her get a second pit bull!
She was our first tenant, and I wouldn't recommend a novice landlord starting off with an S8 tenant. They know much more than you do!
- Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes12y
It's irrational to stereotype and entire group people. There are multiple problems with section 8, but if you understand how to screen and keep people in line if needed, it works. The problem is, most are just out for the money and could careless about anything else. Proper screening and somewhat of a decent relationship with the tenants will eliminate most of those problems.
- Real Estate Investor · Troy, MI · Member since 2014 · 139 posts · 23 votes12y
Originally posted by @Mark Cruse:
It's irrational to stereotype and entire group people. There are multiple problems with section 8, but if you understand how to screen and keep people in line if needed, it works. The problem is, most are just out for the money and could careless about anything else. Proper screening and somewhat of a decent relationship with the tenants will eliminate most of those problems.
What nonsense. So if the landlord doesn't want to have to babysit adults, they are just in it for the money? BTW, you know that people do real estate investing make a living, not a hobby. This is a capitalistic society. Making money is the whole point.
- Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes12y
@Benjamin Timmins, my point is that people are taking their individual experience and lack of being able to manage section 8, as an opportunity to scapegoat an entire group of people as horrible. Of course we are all in it to make money, but it's that blind obsession with money only that makes you fail at understanding the situation. If you already have a preconceived notion that you are dealing with some despicable element within society, it impacts your judgment and ability to manage your situation. You love that dependable check but hate and treat the people like animals. That will never work.
- Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes12y
@Mark Cruse Forums work so well because we all can offer our individual experiences, on both sides of the equation, and it helps make a more informed decision for others who may not have thought of that problem or circumstance. I don't see anyone on these forums that has a "blind obsession with money." Even the ones that are for Section 8 on here will acknowledge that it is usually more work, more hand-holding, and just a different experience than having a well-qualified, well-screened tenant. Just because an investor chooses to avoid the problems that, from their knowledge and experience, seem to come with Section 8, does not mean they are stereotyping, and even the ones that are negative say there are good examples of Section 8 tenants along with the bad.
- Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes12y
@Mike D. The OP said it was a 3BR. :-)
@Mark Cruse. I agree with you on the importance of not stereotyping Section 8 tenants, but you lost me on the comment about most people being just out for the money. There are legitimate reasons why some people chose to work with S-8 and others don't. You are right about the importance of proper tenant screening and working effectively with tenants.
@Benjamin Timmins. For me, making money is not the whole point. It is a factor, but I wouldn't be in this business if I didn't care about our community and the people who reside here. Making money is an outcome of good business practices. No baby sitting required.
@Lynn M. Our section 8 tenants are well-qualified, well-screened tenants. They do not require hand-holding or more work on our part that our non-section tenants. We choose to rent to S-8 tenants who meet our minimum criteria to rent. It is easy to work with our local Housing Authority who administers the S-8 program in our locale. In some municipalities that is not the case and if the program became too onerous for me, I could easily chose not to accept S-8. I think S-8 tenants in different municipalities may also learn their good or bad behavior as a result of how well their case managers are working with them. Just a thought.
- Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes12y
@Lynn M.
I call all these stereotypes. In addition, they tend to be dog whistles and justifiable code words aimed at certain ethnicities (i.e inner city). My point is, if you already have this horrible generalized depiction from jump and you do it anyway, I must conclude you are out for money only and most likely will treat your tenants in conjunction with the preconceived sentiments.............
"section 8 people mess your stuff up weather they have kids or not"
"I would rather rent to hard-working responsible people who have something to lose and won't be as likely to trash my place."
"Obviously some section 8 rentals are by sweet old ladies who take good care of their place and are polite and clean, but I've also seen inner-city section 8 where that's not the case."
"Are the kids from 5 differnet dead-beat fathers who don't pay child support?"
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes12y
Originally posted by @Michael Noto:
In the past I have had a lot of trouble collecting the tenants portion of section 8 rent. To the point where if sec 8 doesn't cover 100% of the rent it is very tough for me to consider that tenant.
I am surprised to hear this. Report them to the local HUD office. If the local HUD office is doing their job then this report should cost the tenant their voucher. - Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes12y
Originally posted by @Chris Martin:
Originally posted by @Steve Babiak:
Originally posted by @Chris Martin:
6 people. 1 adult, 5 children. 3 BR. You can't discriminate against familial status, but you may want to ask how 5 children can fit in 2 BR. I'm guessing that the size and arrangement of rooms will accommodate 2 children, not 3. ...
In all seriousness, the living room can be used for sleeping.
I think this can be true. I believe the LR needs a door that shuts the LR off, there must be a closet (coat closet will technically be sufficient) and an egress window/door, which all LR should have. If the LR opens to another room without a door, you could add one. Personally, I wouldn't do this... but to pass S-8 inspection, and HA overcrowding rules (if they apply for your HA), the LR might be an option.
Correct.
This why a "den" does not count as a bedroom. No closet.
Standard is 2 people per bedroom. But the adult might command 1 bedroom alone. So this case is VERY borderline.
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes12y
One more point about S8. It's a Federal program... But it's managed LOCALLY. So a lot depends on what the city office is like. I can think of one city that I would NEVER rent S8 in. Because I would have to deal with the bozos in that office.
I would call the lcoal Housing office and talk to some of the people there. Get a feel for what they are like and how they handle problem tenants.
- Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes12y
Section 8 tenants have been my been best tenants. That is my personal experience.
Frank
- Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes12y
@Frank R, I'm sure your success would be contributed to very good screening and decent to at least fair treatment of the tenants!
- Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes12y
Originally posted by @Franklin Romine:
Section 8 tenants have been my been best tenants. That is my personal experience.
Frank
in that case I cant imagine what your worst tenants must look like
- Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes12y
@Mark Cruse Screening? I call it smoking them out...
I believe everyone deserves high quality service and the best treatment. It doesn't matter if your renting a $400 per month apartment or selling a $500K home.
- Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes12y
Smoking them out. LOL I agree! Yes, everyone deserves decent treatment. That's the best policy.
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