I don't need the additional hassles government regulation brings. Well done. I own my own Peyton Place complete with just about every kind of misconduct and bad life decision that can happen. For that reason, it’s best to keep your portfolio diversified. And if the law does not scare anyone, how about looking and acting exactly like the real estate developers of the last century that helped create the racialized segregation in housing we have today? You can also expect a delay in renting to the tenant, due to Section 8’s initial inspection—during which they may issue mandatory repairs to you before allowing the tenant to move in. Before purchasing property to use as Section 8 rentals, it is essential to be aware that the building must pass an inspection by the U.S. Department of Housing and Urban Development (HUD). But he was dressed in normal clothes so I was like show me some paper work and let me get the old lady out here. And let me add....I have heard from many section 8 renters as well. Why? I never minded the additional paperwork or annual inspections. Thanks for the valuable advice. What a difficult avenue to take. As a 20 year landlord who has rented to over 15 sect 8 tenants and modeled the ROI in those tenants vs non sect 8 tenants, I agree. I have lived in a 2 family for the last 20 years and the two tenants we’ve rented to in that time were both Section 8 recipients. I’ve had excellent low-income tenants living in a rough neighborhood, and do you know what they did? 2- It is very difficult to find quality tenants in low income neighborhoods. Shelly got free legal representation from Neighborhood Legal Services while I had to pay a regular lawyer several hundred dollars an hour. Then, once a month, the housing authority will mail you a portion of the rent or directly deposit it into your bank. Brian, We've never had an inspection issue with any of our properties. Investors used to love Section 8 rentals because Section 8 sometimes paid higher-than-market rents. Maybe it is just one swim lane or maybe the whole pool. I've had a section 8 tenant now for about 7 years and my annual inspection only recommended one small repair over these seven years, and the inspector is a different person every year, so I disagree with point #1. My tenants are great and take care of my properties because they don't want to loose their free money. I was curious about your question, I did find a list of a few organizations that offer home buying assistance grants for low to moderate income individuals: But then it was explained that the process to evict is both timely and costly. Here are the reasons why. Because in my mind I know there maybe some issues. I provide the only "bank" of affordable housing in my community through my rentals in my mobile home park. I hear Dave Van Horn’s fund is closing soon...Hmmm. Ive never had to pay more than a few bucks for a new socket. Keep learning. She notifies me promptly if something needs attention, and there have been very few repairs needed. We currently own 2 SFRs in quiet areas of C neighborhoods (1 an hour away, the other 2 hours away) and rent to Section 8 tenants. I finally hand delivered it 150 mile round trip. The author himself asks for statistics in responses while providing very little himself. It will be interesting to see the unintended consequences of that and how Minneapolis will react when these new policies create problems. I've lived with Roaches for 3 years. Teach me the your methods! You appear ok with following the trail to the tenant so can we take it one step further? Also, those inspections also protect you in case a tenant tries to claim you provided sub-standard housing. Well said. We will see how my experience compares with yours and other experienced Sec 8 investors. Some good tips in this article, but I haven't experienced the tragedies within section 8 that this article describes. I think that ultimately your tenant is only as good as the screening process, and you can have crummy ones from all walks of life. And while there are plenty of good Section 8 tenants out there, my experience has been that it’s just plain harder to find reliable, high-credit, low-impact, respectful tenants in lower-income neighborhoods. I benefit directly, as well I should, for the risks that I have taken to build my business, the responsibilities I have, and the service I provide to the tenants. 1. Vetting your tenants is KEY! What's your point? 2. By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions. You can withdraw your consent at any time. Also, as you predicted, most can not cite statistics, only feelings. A government shutdown can’t mean I don’t pay my mortgage. While this article hasn't completely convinced me to avoid S.8 tenants, I'm wondering if the lower income neighborhoods are for me. ), it's a wealth transfer from tax payers to property owners." I have tenants on Section 8 in the (liberal, tenant friendly) San Francisco Bay Area as well as in Cleveland, Ohio. There really are good people in unfortunate situations. How's that for statistics? Beyond screening reports, talk to current and former landlords, and verify that they are, in fact, the applicant’s landlord. And he calls at least twice a year to tell me that I remain his best tenant ever! BUT there are also a lot of benefits to choosing Section 8 – especially if you work with a property management company that has experience renting to Section 8 tenants. She pays in cash or a money order, and I am certain does not have any savings at all whatsoever, to weather a storm. In all my years of rental property ownership, however, I've only one actual Section 8 Voucher tenant and in that particular case it worked out fine for me. She kept saying she paid the rent -- like the dog ate her homework. Several local housing … List of Sold Projects. NO ONE I know who has ever voucher property has had a good outcome. And every single year, the inspector will find five to 10 items to list. The tenants receive enough of a benefit to keep their heads treading water in exchange for having the public's ire over the wealth transfer directed at them as opposed to the ones getting wealthy from the program, including myself, so perhaps being politically incorrect is not necessary. There is very good sense here and I appreciate the information provided. Good tenants will look for good landlords. Once the inspector approves your property, you will sign a W-9 and paperwork to then begin accepting Section 8 housing vouchers. It seems that the moral if the story is that if you want to do section 8, you are well advised to do your homework first and make sure you understand: This is very expensive. One more thing, I have yet to find a decent Property Manager and now believe the quality of the tenants and local area has a direct impact on the quality of the property management you are able to obtain. If it were not for section 8 vouchers what would happen to the values of those properties? That was my profit margin. That's common sense. If you signed up for BiggerPockets via Facebook, you can log in with just one click! I know this is not the case in all areas. But list was so long and I never seemed to get called. And if he were renting those properties to non-section 8 tenants he'd be losing that amount or more through vacancies and loss of rents because non-housing tenants will just leave every year if the property has that many problems it's more of a case of six in one hand, half a dozen in the other but it certainly is not a result of the section 8 program. They promised to get rid of them if the inspector went on and approved the apt s so that I could get moved in. And I have a front-row seat to all of it. Management is crucial if your planning to visit the property once every 6 months yeah you're going to get screwed. I've always have gotten my deposits back as well, I resent being put in the same group of those single moms who continue having babies by different daddies and sadly not sure who the father is therefore the dad isn't helping to support those kids. I went back home to my mom's after a year and a half due to crime. In her free time, Jessica enjoys writing music, baking, meditating, and spending time with her friends and family. I think it's unproductive to bring politics into an investment decision. However, I'm not too worried about this, as she's lived there for 7 years and I'm keeping the rent competitive to hopefully keep her in place. Section 8 requires an annual inspection of every participating property. Whatever, my spouse had purchased the home during the boom and we were grossly underwater. So only children of Section 8 people damage properties? One of those families recently earned their way out of the voucher and pay privately and the other went from 100% to 50% subsidy. It would let me hold on to the property while it will likely increase in value. Feb 19, 2021. Well written and far more politically correct then I would have been! I've only heard from her maybe two or three times over the years. 7. people call you slumlord... non-LL often call ANY LL a slumlord, they just don't know what they are talking about. It's all about selecting the right tenant. Section 8 Inspection Checklist The inspector's job is to make sure the property meets basic quality standards for housing that provide tenants with a healthy, safe home. I personally would never buy a class C or D property in a crappy neighborhood. Any landlord would be lucky to have myself as a renter! I can't speak to the timing when BP re-released the article, but they do like to stir the pot :-). distracted, I totally understand your frustrations as a landlord because I myself get upset when I see renters who clean their cars out in the parking lot. I then installed steel cages over the condensers. But however you choose to invest, the most important point is that you protect yourself and your investment. So not all Section 8 is bad. They get a job and then quit so section 8 pays more towards the rent. Can’t wait to read more. We quickly developed a knowledge of certain markets and went from there. Many cry that section 8 in many states now does 2 heartbeats a room no matter the gender nor ages. Here's my musts: You forgot to mention: all of the damage the children do to the place, the "baby daddy" that stays there all the time but not of the lease and oh yes, the sense of entitlement because the LL is rich and the LL can afford to absorb any damage or income loss. Other tenants, yes, but a Section 8 voucher is too hard to get to risk loosing it. Section 8 Apartments for Rent and HUD Homes to Buy. Notably, the landlord … so if you get a property manager to deal with your section 8 tenants. I am moving from the Bay area in CA to Wisconsin. So, yes its costing me almost $3000 a year. Sounds to me you need to do a better job of screening section i or not. I currently rent a very nice house, in a nice middle-class neighborhood, to a Section 8 tenant. Resist the temptation. Home » Learning » Section 8 Properties for Sale & Why Buy Now Due To COVID-19. Almost NONE will qualify. Mr. Free, thank you for granting me freedom to debate the merits of the program, and by way of "the saying" entitling me to my own opinion. Trying to "give someone a break" and help them with THEIR problems has cost me over $50,000 in little pieces and has NEVER worked. For what it’s worth, let me summarize my experience. --"Lower-end neighborhoods" is apples and oranges. No one in the building realizes the 80 year disabled lady pays part of her rent with a voucher. I generally take pride in keeping very nice units. Never send funds directly to a seller but instead, use the services of professional title and escrow companies. I may not have money but I do have class. I then got pecked to death by inspectors, ever more stringent anti-landlord laws, and activists calling me a slumlord, even as I lost more and more money from break-ins, turnovers, mandatory inspections, and registration fees. All had children and they had low income. Getting your buddy to pose as your landlord is an old trick, and one that applicants have tried on me before in lower-income neighborhoods. Your complaining about maintance issues. In major urban markets, the waiting list for Section 8 housing may be far greater than the number of available properties. New investors are drawn to lower-end rentals because they’re cheaper, and therefore easier to buy when you’re just starting out. All my other investments were nicer town homes where the HOA pays most utilities. Anytime you walk into a housing authority and ask them if there’s a list you can add your property to for Section 8 tenants, they’re going to point you to GoSection8.com. Make all our communities better than when you started. Even once they (eventually) give you and the renters the green light, you can still expect to wait up to 60 days for the first month’s rent check. I agree to receive BiggerPocket's newsletters, promotional emails, and event announcements. All of the houses I looked at had had the AC stolen. In many instances a tenant may be removed from the program if they owe money to a previous landlord). As landlords we need to STOP renting to sec-8 so there will be an incentive for the system to change. Your mileage may vary. The rules applying to screening in the state. They throw paper on the play ground. Learn how here. Generally, they fairly represented property conditions. It is impossible to be too paranoid in this business. People no longer take responsibility, trash your house, squat, refuse to pay rent and all you end up doing is having to evict. We have built rules around our acquisition criteria and for our ongoing property management (we manage for our own account (use of a good PM software system has helped us)). Most investment property lenders don’t even consider loans below $75,000. Brian, I will state that you have very strong points and DO make a very good case. And I still have roaches so I am now sealing the cracks so they can't run and hide. Section 8 was supposed to be a stepping stone, to help you get back on your feet, not a way of life forever. Any comments , anybody? Yes there are nice sec 8 people. They are profitable, great cash flow and all on rather short term financing (less than 10 years) Section 8 of the Housing Act of 1937 ... tenants' incentive to take good care of the property (PHAs require that tenants not damage rental properties. I would happily convert more of my properties to section 8. We have had properties nearly fully gutted from vandalism. A list of sold Multifamily foreclosure and HUD-owned projects containing basic information has been compiled and is available. And every single year, the inspector will find five to 10 items to list. Do what you can control. He knew you were coming. Different times. They give me tips on how to increase my business, not penalize me. The section 8 pool of renters, and how hard it is to successfully screen so that you can find one who takes good care of your place. I can also add that we've had other rental properties that were not Section 8 that suffered awful expensive damage due to tenant negligence. Go Section 8 isn’t a government-run website, but the government uses it like it is. For landlords, a reliable tenant is worth their weight in gold. To them I have a simple reply: “Go put hundreds of thousands of your own dollars in lower-income housing. The more indestructible you can make your property, the less damage your tenants will do. Evidenced by the fact that I'd rather be me than them. My brother, thank you for having the guts to speak the truth! What can be done? A courageous and excellent article. When you run the cash flow numbers, make sure they work even if you rent to a cash tenant paying market rent. Whether voucher- or project-based, all subsidized units must meet the HQS, thus ensuring that the family has a healthy and safe place to live. It is clear, as stated in comments that there is a huge disparity in regards to location. So the idea that I should be told what qualifications I can or can't use to choose reliable tenants has completely turned me off to buying any properties there. I screened them very strictly and do safety checks for access every 6 months. 5. Important Changes To the Lending Industry COVID-19, How To Start Accepting Section 8 Vouchers At Your Current Property, 6 Markets with Section 8 Properties for Sale, Red Stag Fulfillment’s State-By-State Guide, 23823 Malibu Road, Suite 50419 Malibu, CA 90265 |. I unloaded.... err, I mean, SOLD, that property, asap. Always nice to keep a healthy dialogue with multiple views represented :-).
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