Do you accept Section 8 Tenants

Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes

I am asked on my rentals if I take Section 8 tenants. I never say no, I always say it depends on the financial numbers. I have never had a Section 8 tenant apply. What has been your experience with Section 8 tenants?

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Gail K.

Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes

We no longer deal with this program. We did once. Even with clients in the program who are employed we found this was not the best choice for us. You might rent to say, a four member family only to find that, later, they have allowed unemployed relatives to move in with them greatly increasing the wear and tear on your property.

In our case adult female children had a tendency to pop out offspring as if they were a PEZ dispenser, often producing a child with every man they casually dated, then dropping off the children at "grandma and grandpa" to raise. When questioned about this ever increasing population one is often told these little ones are "just visiting"...until you happen to see them being dropped off by the local school bus one afternoon and realize they are now permanent residents in your rental property.

If you choose to work with this program it would be important to monitor who is actually residing in your rental property carefully.

Gail

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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
I do because most of the time the #'s make sense to do so. If your rental is in Palatine, or more accurately Cook County, it is against the law to discriminate against section 8 voucher holders or have different requirements for sec8: http://www.illinoisrealtor.org/legal/issues/sectio...
Common ways around that are if the unit won't qualify based on condition and you won't make repairs to have it qualify, or if you have a security deposit and the voucher holder can't afford it (although you have to charge EVERYONE the same deposit).
My somewhat limited experience (compared to some others here) is that its like dealing with any other tenant. The tenant can take great care of the unit or destroy it, criminal activity or none, etc - so the background check and rental history shouldn't be skipped just because the gov't is cutting the check. Credit isn't as important, but again, if you are in cook county the proper way to follow the law is to treat the voucher like any other W2 income so your tenant should be screened the same as a cash tenant.
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Kenneth GarrettPro Member
OP
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
@Matthew Olszak
Great insight Matthew. Thanks for attaching the cook county guidelines.
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Matthew T.
Investor · Springfield, MA · Member since 2010 · 277 posts · 84 votes
9y
Hi @Kenneth Garrett I am a landlord in Springfield, MA. I have been working with subsidized tenants since I was 16. At one point I had over 85% of my units were subsidized. For us this was not the best mix. We found that our maintenance costs far out weighed the "guaranteed" rent. We are now closer to 50% but we still accept all applicants but typically given that our apartments are renovated well we can get market rents which most subsidies will not pay so unfortunately so some applicants that means they do not income qualify.
Section 8 or not section 8 the number one thing I would say is to screen well and the same for all your applicants.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y
It will depend on the area you are operating in. You are partnering with the government so it is Landlord beware.
Your property would be a C quality or lower so your tenant base is limited regardless. You decide whether you want to rent to low income working people or those living off the state.
In my area the welfare system rewards those that have no desire to work and have learned to work the system. They are not worth taking the risk on since the government in no way takes responsibility in regards to protecting the landlord.
Landlord beware as with any tenant. Set your screening standards and stick to them.
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Gail K.
Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
9y
We no longer deal with this program. We did once. Even with clients in the program who are employed we found this was not the best choice for us. You might rent to say, a four member family only to find that, later, they have allowed unemployed relatives to move in with them greatly increasing the wear and tear on your property.
In our case adult female children had a tendency to pop out offspring as if they were a PEZ dispenser, often producing a child with every man they casually dated, then dropping off the children at "grandma and grandpa" to raise. When questioned about this ever increasing population one is often told these little ones are "just visiting"...until you happen to see them being dropped off by the local school bus one afternoon and realize they are now permanent residents in your rental property.
If you choose to work with this program it would be important to monitor who is actually residing in your rental property carefully.
Gail
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Kenneth GarrettPro Member
OP
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
@Gail K.
Wow Gail. Sounds like you have had some very difficult experiences. I appreciate your insight, I will keeo those comments in mind.
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David Song
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
9y
I have one section 8 tenant. Old veteran. Great tenant.
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Randall Brown
Investor · Santa Cruz, CA · Member since 2016 · 71 posts · 39 votes
9y
I think we have 10 to 12 section-8 families. Only 3 of them don't lie about who actually lives in the property.
"Single mom with kid" has a voucher? It's guaranteed that at least the baby daddy will live there, possibly an entire additional family.
People from some cultures/ countries have no problem putting an entire family into each bedroom.
As noted above, it's impossible to prove occupancy. They are always "just visiting".
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Shaun Patterson
Property Manager · West Palm Beach, FL · Member since 2012 · 296 posts · 143 votes
9y
As said previously it depends on your tolerance and the area that you are renting in. I have a friend of mine who is renting to a section 8 family in a community where the homes normally run 350 k+ He is able to pick the best of the best section 8 tenants since his property sells it self (most properties in the section 8 program aren't your first choice). But the process can be bothersome especially if you have never been approved to rent your property to section 8 tenants before. On the homes with section 8 we usually have cameras set up. We tell them its for security but we also let them know that it records 24/7. This spooks most of them into keeping the people "stopping by" to a minimum
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Kenneth GarrettPro Member
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Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
Thanks for the comments. Clearly there is a pattern with the BP community who have dealt with issue in the past. Appreciate the feedback.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
9y
Where investors get the disconnect is even though section 8 is a national program it is called various things throughout the country and ran locally.
So some investors saying it is great and others can't stand it has to do more with the availability of quality tenants in the area and the organization running the local programs there.
Some case workers are very lazy, do not enforce the rules, and stick it to the landlords with section 8 deadbeat tenants. In some areas you get more rent to regular tenants than section 8 but other times section 8 pays more. So there are a lot of variables that could make an investor think no or yes.
Problem with section 8 is it does not motivate to get them off the system. Any job they go get the money is then taken off of section 8 they receive. The more they work the less assistance they usually receive.
I have seen section 8 tenants say WHY work when section 8 takes money from me? I can sit on my *** at the house and say I can't find a job and do nothing. The system penalizes me for trying to get back on my feet etc.
I think if they are making strides to get off of section 8 a system of rewards for bonuses might be better. The goal is to get them self sufficient and off the system. Asking them to self motivate while penalizing them at the same time seems to be a failed system.
Some areas have great section 8 tenants and case workers. This is why an investor gets confusing mixed reviews for section 8.
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Kenneth GarrettPro Member
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Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
@Joel Owens
I couldn't agree more. The government assisted programs were intended to be short term assistance not to remain on them for your entire life or generation to generation. The government doesn't owe you anything. You owe yourself to be self sufficient. When we need help it is there for all of us.
Mixed reviews, you are correct. Trying to pick the proper tenant is always the challenge no matter what the situation is.
Thanks Joel.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y
The risk with section 8 is never really knowing how your local system is policed and if the policing will drastically change with staff or policy changes. Remember you are in partnership with the government and not in complete control of your business.
At best accepting section 8 is a crap shoot making it safer to avoid if other applicants are available.
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Dan Schwartz
Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
9y
Wow, Gail Kaitschuck Did these super humans have a less-than-nine-month gestation period for their offspring? What a remarkable phenomenon! "In our case adult female children had a tendency to pop out offspring as if they were a PEZ dispenser, often producing a child with every man they casually dated, then dropping off the children at "grandma and grandpa" to raise."
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Jim Shepard
Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
9y
Gail Kaitschuck A "Pez dispenser"! LMAO!!! Thanks I needed a good laugh today.
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Account Closed
Investor · Indianapolis, IN · Member since 2015 · 117 posts · 39 votes
9y
Section 8 rents are not guaranteed. Only the govt. portion is somewhat guaranteed if the tenant remains in compliance. I have had to evict section 8 tenants because they didn't hand in their paperwork. Some tenants had a bigger income whereas the govt portion was only $140. Still had to chase the tenant down for their portion. Also be aware that section 8 city of Chicago and section 8 Cook county are separate entities. Chicago pays a higher rent than market whereas the suburbs ( in my experience) have been below market. Not worth the hassle.
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Chuy Gonzalez
Investor · Long Beach, CA · Member since 2012 · 313 posts · 190 votes
9y
I haven't so far. im in a "c" (but improving) area . I had a crappy pm company that I got rid of last year...my new company is great. My new company gets me great people that are willing to live amongst all the other section 8 places adjacent to mine. Rents are growing exponentially here in socal, (1500 for a 2 bed is a bargain)...so i don't really feel the need to try it. When i advertise a unit, I get at least 10 decent applications the first week...I even got a nurse (wipes moist eyes...) So i probably wont ever try it.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
9y
When I was a landlord in Hoffman Estates, IL I was routinely contacted by potential tenants, asking if we accepted Section 8 vouchers. I simply answered "We are not approved for section 8."
This seemed to satisfy them, they would hang up and presumably call the next listing.
It was not a lie, I wasn't approved. I also hadn't applied, which may have had an impact on my approval...
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Bob B.
Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
9y
I don't rent to section 8's.
There it once but got tired of watching them drive up in nicer cars than I drive.
I also realized that if someone is at home all day they are creating more wear and tear on the house.
I know there are good people on section 8, but I have plenty of qualified applicants that get up and go to work every day and most of the time take care of the house.
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
Originally posted by @Mindy Jensen:
When I was a landlord in Hoffman Estates, IL I was routinely contacted by potential tenants, asking if we accepted Section 8 vouchers. I simply answered "We are not approved for section 8."
This seemed to satisfy them, they would hang up and presumably call the next listing.
It was not a lie, I wasn't approved. I also hadn't applied, which may have had an impact on my approval...
@Mindy Jensen
That's the key - the phrasing. I've had folks ask in the alternative if I've had a sec8 inspection already and how did it go. For those that've passed in the past (there's a mouthful), its a great selling point to say it passed. For those owners that don't want sec8, most applicants hang up or don't show up if I say, "It hasn't ever been inspected so I don't know". There's usually enough lower hanging fruit for them to go after instead of having to go through the approval process just to have the unit not pass for one big reason or another.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y
No. I have nothing against Section 8 but I don't personally want to deal with the program or the requirements. I am also biased towards working class individuals who always find a way to get up and go to work in the morning, even if it's part time work or less than ideal conditions. People who have a work ethic tend to be good renters, because they tend to be good people. It's easy to sit around and cry about your problems, it takes some personal fortitude to go try to do something about it. Those are the people I want to rent to. I know lots of people work and still get Section 8, and get trapped into that system - I get it. But a decent number of people also figure "Why bother?" and sit at the house, too.
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Shannon Slade
Forney, TX · Member since 2013 · 119 posts · 101 votes
9y
Nope, don't want to support this broken program. One person has the voucher with a live-in friend with a job, making more money than an honest family.
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Heather Walton
Lafayette, LA · Member since 2017 · 1 post · 0 votes
9y
Even though many have reported negative experiences with section 8 I am still interested in doing it as a back up plan in the event that my rental stays vacant for a while. I am in Louisiana and was told by another landlord that even though the FMR in my area is about $1,100 for a 3 bedroom section 8 would only pay about $800. Have any of you experienced this?
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Jason Monroe
Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
9y
@Kenneth Garrett,
When I was looking at units in the Indy area which is sorta kind relevant-ish one of the biggest challenges is the amount of wear on the property if you have 2bd 1ba units then it can potentially make sense for section 8 as the amount of wear on the property can be managed by the fact that there just isn't that much space in the unit.
In larger units one can potentially have high wear which can result in cynical attitudes like that of @Gail K.
In the Indy area property managers, owners and tenants seem to collude together. Tenents don't pay their portion the owners and property managers know this but because the area has such high tenant mobility they choose to not care.
Then at the end of the lease term the property manager asks them if they want to re-new. The tenant say yes and the owners / property managers tell them the debt is forgiven and the whole cycle happens again.
Other than that
In rent controlled markets that require"just cause" eviction and increases are controlled by Consumer Price Index (CPI) you WANT section 8 tenants. As the property manager / owner can raise it in accordance to the schedule that housing sets which will typically track the market better than CPI.
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Michael Thompson
Indianapolis, IN · Member since 2014 · 206 posts · 127 votes
9y
@Jason Monroe ,
Sounds like you had a bad experience in Indy and potentially a bad PM? Section 8 in Indy has stipulations and hurdles for sure but they can be overcome. I managed a few but my owners lost interest not because the tenants didn't pay but because of the property inspection process. It wasn't consistent and lead to a few thousand dollars in fixes every turn which killed cash flow. I can assure you I wouldn't recommend my owners keeping the same tenant if they owe a balance. Tracking down late rents every month is not a fun process so you have to stay consistent and willing to evict.
If I decide to accept section 8 owners again it would be dependent on a few items one included the condition of the home to start.
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