Section 8 or not? - Posted by Tom

Real Estate Investing Section 8
#1

Posted by BR on November 03, 2000 at 05:07:20:

First, I do not recommend SEC 8…been there, done that however, the inspections never were much of a problem for me. My apts. are kept in Very Good Condition for the most part. Also, HUD has a printout of all the requirements that must be met for inspection purposes. The items listed are basicly all they care about. I would just make sure the items on the printout were up to snuff before the inspector arrived. I would however, leave one ‘cracked’ receptacle cover for him/her to ‘find’, and replace it on the spot with the one that just happeded to be in my back pocket.

#2

Section 8 or not? - Posted by Tom

Posted by Tom on November 01, 2000 at 15:06:23:

Could some of you point out the pros and cons renting to Section 8 residents. Thanks!

#3

Re: Section 8 or not? - Posted by BR

Posted by BR on November 03, 2000 at 04:46:28:

I don’t like getting into this subject much…let me just say ‘you can do better’.

#4

Re: Section 8 or not? - Posted by JPiper

Posted by JPiper on November 02, 2000 at 12:10:25:

I have a Section 8 house next to a house I recently bought. There had to have been at least 100 (or more) dirty diapers laying around my property. Come to find out, the Section 8 tenant was throwing these out a second story window onto my property.

I contacted the landlord, who showed up to give his tenant “one final warning” about her activity. But frankly, he has other problems with the property as well. I mean, when your tenant is throwing dirty diapers out the window I suppose you can assume that there habits follow through to other areas as well.

To be sure, this landlord gets his payment on time. But he’s getting killed in every other way with his deal. And frankly, when I see section 8 properties they all look to have problems. Let’s just say that many times something you get for free or very little you don’t care about.

I’ve never done a section 8 deal…and don’t plan too. I hear some people swear by them though.

JPiper

#5

Re: Section 8 or not? - Posted by Eduardo (OR)

Posted by Eduardo (OR) on November 01, 2000 at 17:43:24:

Tom–

Some of my best tenants have been on Section 8. I have one that has been with me for eleven (yes, your tax money at work!) years. She pays her portion of the rent and doesn’t bother me with complaints. You just have to screen them good–like you would anybody else.

One of the best aspects, in my opinion, is the annual inspection. Unlike Mark below, I want to know if anything is wrong in one of my units. When they find something (usually small safety-related items), I fix it and that’s that. The tenant’s usually clean house before the inspector comes, another plus, and sometimes they’ll fix potential problems themselves. I’ve made it a point to get to know the inspectors and am on great terms with them. Ever month I get the HUD rent checks like clockwork. Again, the main thing, screen the tenants well, otherwise the program works fine.

–Eduardo

#6

Re: Section 8 or not? - Posted by Mark (SDCA)

Posted by Mark (SDCA) on November 01, 2000 at 16:18:36:

Pros:
Guaranteed rent from the government. My check arrives the 1st or the 2nd of the month ALWAYS.
May be able to get above market rent.

Cons:
Can get tenants with an “entitlement” mentality. Tenant screening is still a must.
Normally, there are a limited number of “vouchers” available so there may be a limited pool of tenants.
Must write a HUD approved lease. No month to month for
new tenants.
Annual HUD inspections of the unit. The inspectors are a major pain. They WILL find something wrong.
You have to deal with the bureacracy if there is something wrong with your check. It often takes me a month or more to get a supplemental check issued.

Personally, I would go Section 8 on an apartment but not a house. I can get better tenants in a house.

Mark

#7

Re: Section 8 or not? - Posted by Mark (SDCA)

Posted by Mark (SDCA) on November 02, 2000 at 10:28:12:

I probably didn’t elaborate enough on my point about the annual inspection. At least the inspectors I have encountered are semi-competent at best. One actually broke one of my bathtubs and then flatly denied eventhough the tenant watched him do it. And of course his boss backed him up.
My point was not that I didn’t want to know if anything was wrong with my units; certainly I do.
My point about the inspector is that even if NOTHING is wrong with the unit, the inspector will “find” something and fail the unit. These have nothing to do with safety or habitability.

Regards,

Mark