Section 8

11 Replies

I am rehabbing a 2 bedroom 1 bathroom single family residence in Sacramento.  What are your experiences in government subsidized housing (section8)? None of our other properties are section 8 but we are thing about it for this one. The market rents are about 800-1100 month.

My experiences have been all positive with section 8.


Originally posted by @Hugo G. :

I am rehabbing a 2 bedroom 1 bathroom single family residence in Sacramento.  What are your experiences in government subsidized housing (section8)? None of our other properties are section 8 but we are thing about it for this one. The market rents are about 800-1100 month.

Seems to depend a lot on what the local housing authority is like. Some can be really quite nasty, others (like ours) seem to be really good. Inspectors can vary a lot as well, from downright ugly to really very helpful (thankfully ours is a really nice guy).

Having said that, if we had met the other housing inspector at our office, we may have just pulled all our properties from s8 as the guy is a *******.

The housing authority will determine the rent they will pay. You can haggle a small amount, but you won't be getting the highest in the area by a long way.

Well then rehab per Sec 8 requirements if you will be considering Sec 8 applicants.

Sacramento's Section 8 program is pretty good overall.  I have had many tenants using the program.  The biggest issues are they are understaffed and working with them directly isn't user friendly.  They do require the initial inspection before they start paying so I have allowed tenants who want to live in my homes pay the rent until section 8 gets their inspector out to the property.  They usually stay 3-4 years and unless you do annual inspections there are usually a few issues with the houses when they move out.

Their annual inspection program is pretty poor.  They send out appointment notices and are pretty difficult to change unless you can get the number to the inspector who is actually going to your house.  I definitely recommend going to the inspections as you won't get a good description of any issues from the tenant and once you get the notice of inspection from Section 8 it's not clear on what the issue is and it's very difficult to find out exactly what the issues are so that it doesn't fail the 2nd inspection.

Message me if you have specific questions.

If inspection fails for whatever reason(s) how does that affect your full rent being paid on time all the time, in any way?

@Account Closed If you fail the initial inspection they will not pay rent until you fix all the issues and they come back and reinspect.

So for example if your tenant moves in on June 1st and the inspection is the same day and you do not pass section 8 will pro rate the rent for that month until they return and you pass. So if they return on June 15th and you pass you will receive a check for 15 days worth of rent not the entire 30 days of the month.

As for the annual inspection they give you 30 days to correct any issues or will stop paying rent.

Yet another reason why I dont consider Sec 8. Too much what  call beaureacratic(sp?) red tape! It's complicated enuf screening tenants income, creditworthiness, etc against each other.

Waiting on the sec 8 application/approval etc with 1 tenant can potentially throw off or delay finding the best tenant each time there is turnover and a new vacancy to fill. 

Even just last nite talking with colleagues managing sec 8 rentals, there is always something coming up that the inspector 'found' that needs to be fixed, ie, the latest was one new unit whose prospective tenant applied and was approved, is missing an oven after a kitchen (hey, what if you don't want to provide an oven, but just a drop-in cooktop?!)

another was that the LIGHT SWITCH isn't grounded (i know they check each outlet for grounding, but light switches? how did they even check that, they opened up all the switches in the house?) 

the last was that there needs to be a carbon monoxide AND smoke detector inside and outside of every bedroom. this one i need to start a new topic for though as for california they'res new rules often coming out (i believe the latest will be effect July 2015, but the previous recent revision i think was Jan 2014 or something?) ugh

We are thinking about section 8 for a duplex we are rehabbing.  We have no poblems with inspections because everything is new and upgraded and according to code.  We just want clean and neat tenants.  Section 8 is paying 1,010 and we were thinking $900 because it is almost a C+ town.  Its only a 2 bedroom so we don't want 1 person on the lease and 5 moving in.  I guess we are nervous about section 8 and want our property kept up because we are putting a lot of money in it.  We also have 2 private garages.  Anyone have any idea how garages factor into section 8?

Not sure about the garages but I have had decent luck with Section 8 tenants.  My complaint is the long wait time for initial inspection and approval (was about a month) and the inspector (only inspector in my area) is VERY moody.   Sometimes the nicest guy in the world and very helpful, other times making me fix odd things.   I will say they pay well for my area, and I have never had any problems with inspections or after the 2nd inspection with them not paying me full months rent.   And my rent check it always direct deposited to my account on the 3rd.

@Barbara G.

I would ask for 1050, then after inspection and the inspector doing a rent evaluation in your area, they will come up with a price they will pay.   You can always go down, but once you say 900, they wont pay more.   At least that's the way it is in my area.

I've been considering doing section 8 in a neighboring town that isn't all that great of an area, safe enough though.  You can find houses for $50k-$100k in fair shape.  Just focus on the stuff that needs fixing to pass inspections and should rent through section 8 around $1000 per month.  With the $500 or so profit a month I'd put $250 toward getting more property, and the other $250 toward the almost guaranteed repair that would need to be done at the end of the lease.  If the tenant leaves and there's no damage I get a bonus.   But if I have a nice property, that I put serious money into I probably wouldn't do section 8.  I've read too many horror stories.  Cash flow needs to be serious for section 8 IMO.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here