Sect 8 vs Free market

[Kirtley Whittington]

Hey guys, I have a question regarding sect 8 vs free market tenants. Do you find that sect 8 tenants are a better choice for lower end properties? It seems that sect 8 tenants will be more likely to stay longer than free market tenants. Also, in theory, they will take better care of the unit because they can loose their sect 8 privileges if they destroy the place. My property manager specializes in sect 8 housing and knows the system well. The guaranteed rent is a big plus too. Thoughts/comments?

[Andrew Fidler]

I was surfing sect 8 discussions and may as we'll revive this one since I can add to it.

I have over 10 sect 8 houses in a $30k retail 3/1 neighborhood...sect 8 pays about the same that free market tenants do...$700 a month.

Having been at this for going on 5 yrs, sect 8 houses rent and STAY RENTED normally by the same tenant. My first house has been continuously rented sect8 since dec 2010 to the same tenant (who just left in jan 2014...another sect 8 tenant took the place before February so new tenant in place without a break in rent!)

I suspect that the paperwork required by sect 8 means a lot of tenants won't move on their own...also the lease renews annually and they have a 30 day window to force the landlord to LET them move. Otherwise the tenant will have to ask me to let them leave (had one on the 15th of November ask to move...yeah right...before 45 days of holidays and then 60 days of cold where people don't want to move! That one got refused!)

Free market tenants...they pay their first months rent and deposit FAST- like before they get keys. Then life catches up with the mechanics, waitresses, cashiers, etc who make up my neighborhood and they default before the year is out. ($700 rent...$100 gas...$100 electric...$75 water...mow the lawn. It piles up fast). I ran this game 4-5x with a few evictions taking 60 days to get my houses back and quit free-market rent entirely.

Sect 8 has it's down side...you will wait 60 days before you get your first deposit...and when the first falls on a weekend you won't get paid till Monday at noon or midnight (when you have bills coming due and more than $10k that is supposed to clear SOMETIME, you will start to sweat!). Your inspections will vary...I feel it's based on the individual...if they get a good first impression and like you then they do a basic walk --- you pass...if they trip on a sidewalk crack and have to knock more than once you are about to be written up for 20 minimal fail items and have to add 2-4 weeks to your rent delay because you go to the back of the line for the reinspection. (I pay my crew a first-time pass bonus for this reason). Lastly sect 8 is a black hole of bureaucracy...it's hard to get answers and it's almost harder to get people to return your calls. Expect them to want action when they contact you and plan on calling voicemail a couple of times before you get a response. ( I think this stems from the fact that the tenants all have Obama phones and can drive the administrators crazy if they made themselves available via phone...my pickiest tenants are those who pay NOTHING for their home including utilities)

Oh and sect 8 isn't fair...plan on getting regular notices you are being cc'd on stating tenants failed to attend renewal meetings and are being kicked from the program...you get to evict the tenant after that because they don't have any money, only government support (and don't sweat this too much either...sect 8 is full of big stick threats with grace periods and appeals, so a January 1st notice of cancelled voucher gets reinstated on the 15th and feb 1st the tenant has to pay $250 of the $700 rent starting march 1st and February 15 you get a letter stating the tenant won their appeal and the fill amount is paid by sect8 again and nothing is changed. I've never lost a tenant due to tenants failing their duties (I did drive one to her appeal at the last minute because she didn't have a ride and I was about to lose $5k in income if she missed it)