@Craig Hormes aaaaah, the age old question, is sec8 good or not, it's right up there with which came first, chicken or egg, and I suspect you will find just as much argument on each side of the fence.
Ok, first things first, some credentials. I have actually worked with Sec8 investing, that's a HUGE first point because in my experience 95% of people arguing against Sec8 have never actually had a Sec8 property, and of that 5%, again in my experience, all of those investors had 1 or at most a few and are citing negative tenant experiences not Sec8 program experiences. I was a consultant with a private equity fund, traveled throughout midwest doing Sec8 investment properties, to the tune of about 1,200 units. I have some other experiences as well, point is I am speaking from 1st hand knowledge. I currently manages 248 units NOT Sec8 but mostly C/C+ properties and guess what, it's the exact same tenant base as Sec8 just without the voucher program.
Rule #1, Tenant Screening is tenant screening, regardless of who's paying rent. If your a lazy landlord and do garbage work, well, GIGO (Garbage In Garbage Out). There are bad people out there, in every income bracket. If you blindly accept tenants because they have a Sec8 voucher yes you have a higher than average chance of experiencing a Landlord nightmare. All you have to do is follow the tried and true standard protocols for tenant screening, thats it, and I have found tenant quality is higher on average than with standard rentals because those Sec8 voucher holders have something more to lose, at least in my markets where it is a 5-7yr waiting list.
Rule #2, Embrace the Program. I have heard those few landlords wail and cry how much of jerks the program is because "boo hoo I have to get a property condition inspection", well guess what, you should be doing that anyway. And the missing stair tread, you should fix that anyways, mold growing in the shower, again, should fix it anyway. Every time a person has argued about getting "bullied" on fixing a property, when I press for the required repairs, they are always legit, things any intelligent landlord should have done anyways. Yes, I am being a bit harsh here, but it's earned and needed because slum-lording is NOT REI, it's just slum-lording plain & simple. The Sec8 program has some great resources if you just embrace it, there is free and nearly free $ available via various programs to improve properties and even purchase and develop properties, their is staff available to lean on when a tenant becomes a problem who will go out and assist in enforcement (ok, not technically but I am speaking to what happens, when a sec8 agent calls a tenant saying they are violating program rules and will get kicked off if they don't cut it out, thats enforcement assist to landlord). Any landlord should embrace the municipality they are operating in, it's a win-win, and sec8 is the same, embrace the system and get them on your team!
Rule #3, Make a Rental BUILT Like a Rental. I don't know why but I consistently get the deer in headlights look when I try to explain the reasoning and engineering of purpose-built construction and preparing a unit to be a rental, so I will use a comparison. When you go and rent a vehicle, it is obviously a rental because there is always some "things" different, right. Things are a bit more simplistic, there are instructions and tags, things are made dummy-proof, for all the reasons this is done to vehicles is why it should be done to rental properties. Trim and millwork should be simplistic and strong, I use 6"-8" solid wood rounded edge baseboard, why, because it takes a beating and endures and protects walls. Interior doors are SOLID core, with 3" screws, I am a big guy and I test them by literally hanging off them, because my doors last and it's the best couple hundred bucks spent ever, 1 and done. Use re-keyable locks and change keys ever tenant turn, simple. Look there is a lot more but point is, purpose-built units = much better cash flow via reduced service requests, less maintenance, less overhead, allowing more focus on business building than business managing. And I believe happy tenants attract happy tenants.
As to the financials, some areas have amazing rent payments calculated, some are ok, some are idiotic as they are so far below market that it's a no-brainer of a NO. If your one hold back is just fear of tenants I say DO IT, just act as if they are regular tenants and i am willing to bet your going to love the experience, especially in today's situation as guaranteed rental income, how do you beat that. BUT make sure the #'s work, don't try to fit a square peg in a round hole.
Fact is an ever-growing % of Americans are falling into the "affordable housing" segment, a scary % actually. Much of the negative personifications of Sec8 tenants comes from the 80's, it really does )dating myself here, lol), and I can tell you nothing could be further from the truth. My best tenants ever, we are talking entire REI career, my entire top 10 list are interestingly enough all Sec8 tenants, no joke. They were great people who had little means, most on my top 10 were actually via age or disability (yeah all you naysayers, didn't think of disabled persons did ya). BUT my top Landlord nightmares were ALSO Sec8 tenants, like the cement down the drains guy (yes, actually happened), and guess what, all of those were our fault as we screwed up in tenant screening, I had a leasing agent actually marketing for tenants at a shelter and just blindly taking anyone with a voucher and pulse, no surprise it ended badly.
In Summary, really vet the advice you accept on Sec8, if it comes from informed 1st hand experience or from "talk" and opinion. Do the work, Sec8 or HNW, whatever, do the work. And ALWAYS listen to the math. And DO-THE-WORK, lol.
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