Section 8 rentals issues

4 Replies

Tom Napier,

Section 8 has been great for me and other investors especially in the rougher/ borderline neighborhoods but you still have to go through the inspection process to have the unit approved. This could cost most landlords about a month of rent. Below is my list of positives and negatives for section 8 rentals. 

Positives:

Government pays on time with direct deposit.

Tenants tend to stay longer due to not many landlords offering section 8 housing

Landlord receives at or above market rents in borderline neighborhoods.

Negatives:

The property has to pass the inspection criteria prior to tenant taking possession. One or more months of lost rents whiles waiting on approval and inspection.

Yearly inspections with corrective items.

Perception of lower quality tenants. (Screen all tenants regardless of section 8 voucher or not).

Real estate is about comfort and some people are not comfortable with section 8 tenants. As long as you screen the tenants and have the right amount of vouchers I think its a great niche strategy for filling your rentals with quality tenants.

Originally posted by @Tony Napier :
Been doing Sec 8 rentals in Dayton for a while now. I’m curious as to why more landlords don’t rent their homes section 8. Espically in the rougher sides of town.

 When section 8 goes well it's awesome. The down side is all the red tape you need to go through to get the tenant into the house. Multiple inspections with a goal post that keeps moving. One inspector will come out on say 4 items need to be corrected before the house will pass. The followup inspection will feature a different inspector who will cite 3 separate items outside of the original 4. This continuing cycle turns a lot of people off of the program.

Originally posted by @James Wise :
Originally posted by @Tony Napier:
Been doing Sec 8 rentals in Dayton for a while now. I’m curious as to why more landlords don’t rent their homes section 8. Espically in the rougher sides of town.

 When section 8 goes well it's awesome. The down side is all the red tape you need to go through to get the tenant into the house. Multiple inspections with a goal post that keeps moving. One inspector will come out on say 4 items need to be corrected before the house will pass. The followup inspection will feature a different inspector who will cite 3 separate items outside of the original 4. This continuing cycle turns a lot of people off of the program.

 I’m noticing in rougher areas of where I invest, a lot of landlords would rather set a low rent and provide a par or sub par product, and fix very little. I have even seen a rental advertisement in my area that said not to ask to fix anything prior to move in because that is why the rent is so low.

So, many aren’t doing Section 8 because they are too cheap to do a property right, even though they can get above market rent in my area by doing Section 8. Old habits are hard to break. Slumlording must have some profit to it or people wouldn’t still be doing it.

Originally posted by @Jonathan R. :
Originally posted by @James Wise:
Originally posted by @Tony Napier:
Been doing Sec 8 rentals in Dayton for a while now. I’m curious as to why more landlords don’t rent their homes section 8. Espically in the rougher sides of town.

 When section 8 goes well it's awesome. The down side is all the red tape you need to go through to get the tenant into the house. Multiple inspections with a goal post that keeps moving. One inspector will come out on say 4 items need to be corrected before the house will pass. The followup inspection will feature a different inspector who will cite 3 separate items outside of the original 4. This continuing cycle turns a lot of people off of the program.

 I’m noticing in rougher areas of where I invest, a lot of landlords would rather set a low rent and provide a par or sub par product, and fix very little. I have even seen a rental advertisement in my area that said not to ask to fix anything prior to move in because that is why the rent is so low.

So, many aren’t doing Section 8 because they are too cheap to do a property right, even though they can get above market rent in my area by doing Section 8. Old habits are hard to break. Slumlording must have some profit to it or people wouldn’t still be doing it.

 If the house is in the hood I prefer to go section 8. As the guaranteed rent is worth the section 8 hassle. Leaving the property in disrepair just attract lower and lower quality tenants. Things get real savage real quick when you start going that route. In nicer areas where you've got a better tenant pool the section 8 hassle isn't really worth the extra legwork when you have so many higher quality applicants to choose from.