Tips on using rental properties as Section 8 housing in Atlanta

11 Replies

I understand there are a lot of people who steer clear of section 8 however I am wondering if there are any successful and knowledgeable Investors who are happy with having rental investments serving as section 8 housing. Some questions I have: 

1. Ways to section 8 proof property to limit costly damages (ie: removing carpets or high priced appliances?)  

2. What is the most desirable type of property for section 8 ? (2bd, 3bd, 4bd ? )

3. Easiest housing authority district to deal with in Atlanta metro area (if there is such a thing)

4. Any things you know now that you wish you knew in the beginning with investing with Section 8?

Any other tips would be welcomed. I am interested in how to create a product that would increase the chance of attracting the best type of section 8 tenant.   

I am a landlord vendor with Atlanta Housing Authority.  You are dealing with the government.... other than that, use the same qualifying criteria you use for any other tenant and choose the one that is most qualified.  

I don’t have any tips specifically with section 8 housing, but from all the knowledge I’ve learned here in BP and with other mentors is that the best for your investment is a good screened tenant.

My advice is to visit the city's housing agency, schedule an appointment to speak to a housing representative and find out the in's/out's of the program first hand. In DC, Fridays are dedicated to landlords and once a month, they host a landlord meeting.  This will be the most beneficial.  I will say, it was they stressed SCREEN, SCREEN SCREEN for the most qualified tenant and executing your lease. For the later, she meant "evict"...in DC, eviction is not an easy process...it can take years to evict. 

I will disagree with Todd here. Voucher tenants can be a great opportunity, but you need to be smart about it like you would with any other rental property. I have found that in certain areas it's possible to get better rents with vouchers than you would without, especially if you target certain unit types that are in high demand by AHA (see number 2 below). My experience with the tenants in my voucher units has been great so far. You can screen them just the same as you would anyone else without a subsidy, and you even have some extra protections since AHA will inspect your properties regularly at no charge. Just screen your tenants well, and use a strong lease document - again like you should anyway. To answer your questions:

1. Ways to section 8 proof property to limit costly damages (ie: removing carpets or high priced appliances?)

Same things you'd do on any lower-tier property. I usually try to avoid providing washer/dryer, and will use pretty standard appliances. If there is already carpet I won't pay to have it removed unless AHA tells me to (this would only happen if it was in really bad shape already). Once it reaches the end of its life I'd probably opt to replace with some kind of vinyl.

2. What is the most desirable type of property for section 8 ? (2bd, 3bd, 4bd ? )

In my opinion, 4bd since they are very rare and in high demand. Last year I bought two 4bds and in my talks with AHA learned there was a long wait list for these types of units and thus I was able to negotiate better rents.

3. Easiest housing authority district to deal with in Atlanta metro area (if there is such a thing)

No such thing. AHA covers all of City of Atlanta. Other municipalities have their own housing authorities. I only buy in Atlanta proper.

4. Any things you know now that you wish you knew in the beginning with investing with Section 8?

It's very helpful to have a property manager that is used to working with AHA since there are some quirks (inspections, standards). Rent negotiations with AHA can be a bit of a hassle, but you will quickly learn how to navigate this. Finally, if you are considering accepting voucher tenants start the process of getting certified with AHA as a landlord early. It can take a while, especially if you're located out of state (like I am).

Originally posted by @Sam Mitchell :

I will disagree with Todd here. Voucher tenants can be a great opportunity, but you need to be smart about it like you would with any other rental property. I have found that in certain areas it's possible to get better rents with vouchers than you would without, especially if you target certain unit types that are in high demand by AHA (see number 2 below). My experience with the tenants in my voucher units has been great so far. You can screen them just the same as you would anyone else without a subsidy, and you even have some extra protections since AHA will inspect your properties regularly at no charge. Just screen your tenants well, and use a strong lease document - again like you should anyway. To answer your questions:

1. Ways to section 8 proof property to limit costly damages (ie: removing carpets or high priced appliances?)

Same things you'd do on any lower-tier property. I usually try to avoid providing washer/dryer, and will use pretty standard appliances. If there is already carpet I won't pay to have it removed unless AHA tells me to (this would only happen if it was in really bad shape already). Once it reaches the end of its life I'd probably opt to replace with some kind of vinyl.

2. What is the most desirable type of property for section 8 ? (2bd, 3bd, 4bd ? )

In my opinion, 4bd since they are very rare and in high demand. Last year I bought two 4bds and in my talks with AHA learned there was a long wait list for these types of units and thus I was able to negotiate better rents.

3. Easiest housing authority district to deal with in Atlanta metro area (if there is such a thing)

No such thing. AHA covers all of City of Atlanta. Other municipalities have their own housing authorities. I only buy in Atlanta proper.

4. Any things you know now that you wish you knew in the beginning with investing with Section 8?

It's very helpful to have a property manager that is used to working with AHA since there are some quirks (inspections, standards). Rent negotiations with AHA can be a bit of a hassle, but you will quickly learn how to navigate this. Finally, if you are considering accepting voucher tenants start the process of getting certified with AHA as a landlord early. It can take a while, especially if you're located out of state (like I am).

Thanks Sam, great info. Mind if I ask what property management you use?  

Depends on the area / size of property. I have to use a few unfortunately. I don't think they would want me posting their names on here, but feel free to reach out if you have specific properties in mind and I can let you know if the folks I work with would be able to help you.

If Todd of GTL property management even thinks you are saying anything negative about his company after you terminate him he will have his attorney send this to you:

CGR is also aware that you’ve published defamatory remarks in the landlord forum of BiggerPockets.com. Unless such comments are immediately retracted, CGR will also pursue a claim for defamation. You are also warned against any further baseless, defamatory remarks you may intend to promulgate to your tenants regarding CGR.

Hi Sam,

Sam is pretty spot on with his comments about Section8 in Atlanta.  We deal with about 8 different housing authorities here.  It is difficult to say which is the best b/c they all have their own quirks.  Some are faster to pay rent, others are easier on inspections, and some are quicker on the onboarding/new tenant process. 3 or 4 bedroom houses rent out very easily and in most areas above the market rent when you consider comparables with similar finishes.  In our experience, the section8 tenants tend to stay longer than open market tenants.

Something that we have added into our requirement screening our Section8 tenants is additional income requirements outside of the voucher.  This has helped find people that seem to be a little more responsible and if they do cause damage to the home, it is possible to get money back.  Some property managers here try to get the guaranteed rent by taking tenants that have 0 income.  In our experience, this causes more issues with repairs and the home being torn up than it is worth.

PM me if you have any specific questions about the Atlanta market.

Adam