I have a rental home in zip code 23513 and wanted to know if it's worth switching the home to section eight? I understand that section eight makes those that qualify pay for a small portion of the rent and section eight covers the rest. My concern is will they damage the home, who pays for the repairs (homeowner, section eight, or the tenant), how will that affect the neighbors, will section eight tenant be responsible for all utilities as well? If anyone has any stories to share as well as any other information that would be great!

Originally posted by @Mathew Zorn :

I have a rental home in zip code 23513 and wanted to know if it's worth switching the home to section eight? I understand that section eight makes those that qualify pay for a small portion of the rent and section eight covers the rest. My concern is will they damage the home, who pays for the repairs (homeowner, section eight, or the tenant), how will that affect the neighbors, will section eight tenant be responsible for all utilities as well? If anyone has any stories to share as well as any other information that would be great!

You will always get two diametrically opposing views on section 8.  Its one of the most polarizing real estate conversations.   I am very much for it. The county/city pays you on time.. Always..The first month might be delayed due to administrative reasons, but from then onwards its like clockwork. 

I have 1 Section 8 tenant right now, whom I have vetted like anyone else. They are good people. They pay their own utilities. No issues.  They stay long term unlike 1 or 2 yrs for some other tenants. Eventually, I plan on making all my properties, at least in the state of Virginia, Section 8 properties. 

Also, the county/city does yearly inspections. The tenants are at the mercy of the the city/county approving them for the next year. If they are found in violation of rules like authorized pets, authorized guests, drugs, damage to the property, they could lose their vouchers. Once they lose the vouchers, its not easy to get reinstated.  There is always a huge waiting period.  Huge demand for housing and not enough supply. 

Chinmay J. Thanks for your view point on the subject and I will look a little further into this. Do you manage your own property or do you have a PM? I have a PM helping me and is acting like the in between since I am on sea duty/active duty and can't always be near a phone to help out my tenant. With section 8 I can still have someone PM my property and do their own inspections as well?

Section 8 is just a program. It's about vetting the people, regardless of the program. 

I had 3 tenants on Section 8. One worked her way off the program and she's still in my rental. The other two are pretty boring tenants, they pay their rent and take care of their units. I personally like boring tenants.

Dawn,

You have a point there! I've just heard all negative response to those I know in my area and they say not to go section eight because there's to many headaches with it. I've learned anything with rentals could be a headache or no problems at all just depends on the tenant. How do you vet your tenants?  

i have dealt with both sect 8 and non sect 8.  with sect 8 you do have to go thru the yearly inspections but for the most part it is to your benefit and they are mainly safety related items. i do not see sect 8 damaging your property any more than a non sect 8 tenant.  as a matter of fact, there are more controls put in place with that program.  the tenant or ex tenant cannot owe the landlord money or they risk getting kicked off the program. so if they leave your place damaged, they will have to answer to you and the program.  They also cannot just up and leave the unit or break the lease.  Sect 8 requires they get a written approval from the landlord.  you should definitely screen well.  Also you should take into account that section 8 factors the tenant's portion based on their income and affordability.  Not every instance sect 8 is going to pay the majority of the rent.  I have someone moving in Jan 1st that section 8 will pay $$645 and the tenant will pay $1005. Ideally i would rather sect 8 pay $1300 and the tenant pays $350 but this is a former tenant from years ago that i had a good rapport with.  This is why you still would have to screen well because if the person has a history of paying late, you can be waiting for a bulk of your rent.  Not sure if it is federal or not but in my state, we cannot charge late fees to sect 8 tenants in eviction court.

Ray thank you for your reply! I don't mind the yearly inspections because it will keep me doing my job or my PM and it will insure the section 8 will do theirs! I'm looking to place more controls into my one rental that I have now because I want to invest in more rentals. I definitely know that I have to get better at retaining the history of the tenant and all of their issues and put it all in one place. Thanks for the reply!

Originally posted by @Mathew Zorn :

Chinmay J. Thanks for your view point on the subject and I will look a little further into this. Do you manage your own property or do you have a PM? I have a PM helping me and is acting like the in between since I am on sea duty/active duty and can't always be near a phone to help out my tenant. With section 8 I can still have someone PM my property and do their own inspections as well?

Yes you can have PM. But thing is that lot of PMs don't like section 8. I don't know why. Either they don't have the knowledge of the additional paperwork required, or just have bad taste in their mouths about Sec 8 altogether.  So your job is to find one that does. If they bash Sec 8, don't get discouraged.. Just shrug it off and move along. 

I manage my properties myself. Sec 8 and non Sec 8, but if I were to do this out of state, I will definitely have a good PM. 

I looked heavily into Sect 8... and admittedly, I had a lot of preconceived (and ignorant) assumptions about it. Just like all things, there are good people and bad people, and one of the luxuries that S8 seems to afford you is that payment is on-time and there are a specific subset of rules that can be the landlord's benefit.

My 3rd party PM loves the section 8 program due to timely rent and long-term residents.  I only have a handful of subsidized residents but they are all good, long-term residents.

I currently have 7 out of my 12 tenants that are in the section 8 program. Your have to think of the Section 8 program as your partner. Tenants are tenants and you or your PM will need to screen them base on your mutually agreed on criteria. Section 8 tenants pay 28% of their income towards the rent that gets approved by section 8, no income, then section 8 pays all. It doesnt matter what amount you are asking for your place, section 8 will only approve a rent amount they think is fair based on what they are already paying in the area for other places and adjust that up or down based on the condition of your property on its own and whether or not you include any utilities. 

Section 8 tenants have an incentive to cooperate with you and the program to remain enrolled. When they no longer care about that incentive you will be in a bad place and their lease should not be renewed. If you have a PM who doesnt have any section 8 experience then you need to find someone who does. You dont want the PM learning on your dime.  

section 8 tenants pay the security deposit, they can only be charged a late fee on their portion of the rent of any, you cannot evict the tenant if the housing authority doesnt pay you its portion, any notices sent to the tenant usually need to be copied to section 8 also, yearly inspections are not as bad as they are made out to be if you have a decent property. They can be a pain if you have a lot of violations you never fixed with a market tenant. It takes about 30-45 days to get a section 8 tenant moved in from when you show them the house unless they can get section 8 to move faster with initial inspections and such, they most often want a tenant to move in at the beginning of a month so they arent paying rent at 2 places. 

Originally posted by @Ray Reed :

i have dealt with both sect 8 and non sect 8.  with sect 8 you do have to go thru the yearly inspections but for the most part it is to your benefit and they are mainly safety related items. i do not see sect 8 damaging your property any more than a non sect 8 tenant.  as a matter of fact, there are more controls put in place with that program.  the tenant or ex tenant cannot owe the landlord money or they risk getting kicked off the program. so if they leave your place damaged, they will have to answer to you and the program.  They also cannot just up and leave the unit or break the lease.  Sect 8 requires they get a written approval from the landlord.  you should definitely screen well.  Also you should take into account that section 8 factors the tenant's portion based on their income and affordability.  Not every instance sect 8 is going to pay the majority of the rent.  I have someone moving in Jan 1st that section 8 will pay $$645 and the tenant will pay $1005. Ideally i would rather sect 8 pay $1300 and the tenant pays $350 but this is a former tenant from years ago that i had a good rapport with.  This is why you still would have to screen well because if the person has a history of paying late, you can be waiting for a bulk of your rent.  Not sure if it is federal or not but in my state, we cannot charge late fees to sect 8 tenants in eviction court.

Hard to think about our tax money going subsidize a rent amount ($1650) higher than I have ever paid in my lifetime.  Ray, no reflection on you whatsoever.

@Mike Dymski unfortunately housing is expensive in northern nj. 

It depends entirely on your local administrative system. In my jurisdiction I would leave my units empty indefinitely before I would rent to anyone on government assistance. Every person on welfare in my area has a inflated scenes of entitlement, scamming the system and basically a waste of skin. Obviously that is only my own opinion based on our welfare system.

Biggest issue would be that you can not collect damages from someone that has no money and does not care.

@Thomas

You have a point there but I’m torn on it. If I had a few more rentals under my belt then I would try one rental as a section 8. I’d have enough income coming in that if something happened I could still afford the section 8 house. I guess it all depends on a persons cash flow and what they are willing to sacrifice to get there.

I love sect 8- I can get higher rents in my homes without luxuries (granite etc). My tenants have been long term and the tent come in time. I have a good relationship with my local housing office-sometimes they call me asking if I have any houses to rent to their clients since there is always a need. I find all my tenants on craigslist.

Do you know what the tenants portion of rent will be when they apply? Does the local housing authority make that information known to you, acceptable to ask potential renter what their voucher amount is?

Originally posted by @Brian Faust :

Do you know what the tenants portion of rent will be when they apply? Does the local housing authority make that information known to you, acceptable to ask potential renter what their voucher amount is?

The tenants portion is determined by the need. Some need more help than others.  In my case the county pays $1742 per month, the tenants pay $8.  I have seen the split 80:20, 70:30 etc. 

Julie and Brian,

Thanks for the posts! So far there’s more pros than cons!

Brian I will have to ask those questions. I’m trying to build a property management firm in my area slowly so when I am ready to retire from active duty I will already have this in place and will be able to walk off of active duty right into my PM firm of 150 or more homes!

@Chinmay J. Were you aware of that split before accepting that tenant? I knew the split was based on need and tenant income but wasn’t sure if you knew the exact breakdown on a particular tenant prior to extending lease to them?

As someone else in this thread stated, they’d rather the larger portion of rent be subsidized by housing authority rather than the bulk be on the tenant but I imagine deciding on applicants based on their rent portion/voucher portion would be a violation of Fair Housing in some way.....became curious as I followed the thread, don’t mean to hijack the thread! 😜

Originally posted by @Brian Faust :

Chinmay J. Were you aware of that split before accepting that tenant? I knew the split was based on need and tenant income but wasn’t sure if you knew the exact breakdown on a particular tenant prior to extending lease to them?

As someone else in this thread stated, they’d rather the larger portion of rent be subsidized by housing authority rather than the bulk be on the tenant but I imagine deciding on applicants based on their rent portion/voucher portion would be a violation of Fair Housing in some way.....became curious as I followed the thread, don’t mean to hijack the thread! 😜

This is my first tenant that I have through Sec 8, and quite honestly the realtor representing the tenants told me about the split in the very first conversation. So yes, I was aware. Since 99% of the rent was subsidized in my case, it was a no brainer for me to accept them. Also they had sparkling recommendations from their previous landlord. 

I am not an expert enough to answer your question whether one can make decision purely based on how much percentage is covered by the housing authority. You should consult an experienced realtor in the state where property is located.  But do bear in mind that if they miss their portion of the payment, they can be considered in default and lose their voucher. 

The section 8 people you want are the ones that work to supplement their government income. They work enough to make some money without losing their medical benefits due to their medical needs.

The trick with people on section 8 is finding the individual that wants a better quality of life that's within their means without losing their medical benefits.

Screen section 8 people very thoroughly and check them out on Facebook. Have a second meeting with them at their current residence..

In answer to your question, yes, it is.

The inspections they do are not on your schedule, so you have to give up a day waiting around for them, just like for the cable or gas company.

You can fail the inspection for something like a hole in a screen (if the window has no screens, you pass).  Then they stop paying you until a re-inspection, which you have to wait around for again.

You can fail the inspection if the tenant is too messy.  Again, your payments stop until the tenant cleans up.

You have to get their permission for a rent increase.

In some areas, including mine, they pay less than market rate.

You can approve a new section 8 tenant and hold the unit for them, only for it to fail inspection and they can't move in.  I know somebody who failed because a window was too small.  There's no fixing that!

If the tenant violates the lease and you report it, they stop paying you rent!

Many of them don't work, so they sit around all day thinking of things to complain to you about.

For some reason most of them smoke.  A lot.

There is often a boyfriend who moves in (often with his dog), would never be allowed in the program due to a felony, yet knows the system well enough to get mail delivered at somebody else's address so he has "proof" that he has his own place.

I have one section 8 tenant right now who came with the building and keeps the place clean.  The boyfriend and dog are there but haven't caused any problems yet.  She let the oil tank run dry, so we had to heat the basement to keep the pipes from freezing.  We might encourage her to move on in the spring.

I agreed with many comments posted so far.  Yes, there are the good and terrible people in S8.  You have to vet them just like any other tenant.  I have a friend who receives benefit from S8 that would undoubtedly be on the street with her kids taken away had she not been on the S8 program in my opinion.  An absolutely hard-working individual, like most of us here, who tries to work her way out of the system.  In a way, I think, by providing a place for these individuals we indirectly contribute to our local community by reducing the number of homelessness while providing an opportunity for a better life.  Definitely look for potential tenants who have been working in the same job for at least a year.  It gives you a hint of their work ethics, and thus their level of responsibility as a tenant.

@Mathew Zorn

Yes, you can have a PM.  It may help you but you may not need the expense since rent gets paid every month by direct deposit.

Just to clarify here, the program we are all calling Section 8 is now called HCV, Housing Choice Voucher and HUD hires local agencies to administer the program and issue the HAP, Housing Assistance Payment. This is designed to bring the Tenants housing payment down to no more than 30%of their gross pay. You might get a tenant that doesn't work but you need not. HCV helps working mothers, as well as non-working but also disabled and elderly, have equal access to the program.

Your dwelling will need to regularly meet the standards of the program to qualify as a landlord.  I will gladly answer all your questions if you care to contact me and now I just want to address something basic that most people don't think about.

Your success with HCV will be dependant on 3 things of equal importance:

1. Your careful screening of tenants and a firm hand in managing your property.

2. Cooperation and compliance by the tenant AND often overlooked,

3. Participation and control of the managing agency.

This last is so important!  Some agencies will poke a late tenant in the ribs if they don't pay on time or, kick a client out of the program for failure to pay repair costs or otherwise provide services that help you have good, long term rentals and other agencies will not.  Some won't let the tenant move if they're behind or need repairs and some will. Some offer to counsel for tenants or even pay more for high-quality housing.  I recommend you interview the local agency to learn all you can about their policies, procedures, and rate sheets before you decide to rent to their clients.

I hope this helps!

Mark Elkins