I know there is probably a bunch of info on section 8 rental/investment properties throughout this forum, but the "search" function on this site has not been working correctly.

So, I have a friend who owns a home and wants to buy another to start investing. It seems like he is set on buying a property and renting it as a section 8 rental. but he has no experience in these. Is anyone here involved in this? Pros & Cons?
I understand the initial attraction to this because the government guarantees payment, but I know if the government is involved there has to be lots of red tape.

My client will purchase an investment property either way. I am trying to gather as much info as possible to help him out. And I also want to give him the heads up on common issues that arise from these rentals.

So, nobody knows nothing?

Joey,
I am working with a client right now (investor) that swears by section 8 rentals (he has been an investor for about 5 years) I personally only know what I do hear from him, but my suggestion would be that your friend find a local real estate investor group and join it...there is bound to be a few people there that can help answer some of the questions (wouldn't hurt you to join either just because you are an agent that does deal in REO properties some and networking is always a good thing) I love our local group and have been a member for years, the joint knowledge there on investing pros and cons is tremendous.
Good luck to you both!

http://www.hud.gov/offices/pih/programs/hcv/about/fact_sheet.cfm

Follow this link and you can find your local pha office that admisteres the program for Hud and obtain mor einfo specific to your area.

Shybird, thank you. I will do so.

super realtor, thank you. I already have the fact sheet and have gone thru that info. I was trying to get firtst hand experience from anyone here who has dealt with these personally.

I have 15 units total that are Section 8. I personally love them as my checks are in my po box by the 3rd of every month. I get top dollar for these properties and there is a waiting list should the tenant move out. I got the properties ready made a photo book of each room in the property. When the tenant moves the inspector goes through the property with me and any damage that is not normal wear and tear I get a check for then the unit is cleaned and painted and carpeted if needed and my new tenant moves in. Section 8 is what you make of it. To me it is a cash machine!

Paul,
do you run into common problems, or frequent problems with these tenants?
Do you screen possible tenants? i.e., credit check, background check, check last few landlords?
How much do you have them pay up front? Application fee? 2 months or something similar?

thanks

I love Section 8. I'll take a Section 8 tenant anytime. Do you know with the direct deposit, I get my rent by the 1st of every month - if it's not a weekend?

Section 8 tenants tend to stay longer. Any bad complaints on their records will scare them and void them of their voucher. Most generally, they are good tenants - just like any other.

I say take it...

Hi Sabrina here from Chicago. I am looking to get into investing in property, I help section 8 clients worldwide find section 8 rentals. Any tips, help or suggestions would be appreciated.

I only take Sec 8 tenants now.....Have about 7 properties in Chicago western suburbs. Too many hassles with non-Sec 8 tenants: late payments, excuses, etc, etc..Most of my Sec 8 tenants appreciate the nice homes we offer (mostly townhomes and duplexes and occasionally small single family). When we place an ad for a tenant, my phone rings off the hook and I can usually place them within 30 days.

RichAyers

I am not a fan of the Sec 8 program since I see the abuse of the system in every day real estate while remembering that it is my tax dollars which are paying for the majority of slackers who use Sec 8 as a crutch to never bother improving their life styles.

I see the damage, the multiple occupants, the questionable sales activities, the disruptions to other tenants.

I have heard that many of the newly constructed homes recently purchased (100% financing without regard to how many you are buying) during our just collapsed boom times, were purchased by "investors" who rented them out to Sec 8 tenants because of the "sure money" rent.

The last sec 8 occupied home I listed for sale was only two years old, yet the home was tore up on the interior and harbored every roach in the subdivision. Filthy does not even begin to describe it. Single mother, a bunch of kids, her buffed boyfriend, her able-bodied mother who works for the county all housed under Sec. 8. My tax dollars and yours being squandered and abused.

Show me the proven needy, the elderly, the veterans or the handicapped and I will endorse a rental assistance program in a heartbeat, but the Sec. 8 program is completely out of control and needs to be monitored and administered fairly.

Calif Dreaming,
Must be just your area and it appears that you do not actually own any Section 8 rentals. Seems that everything you wrote is just things you have heard. In all of the years I have accepted Section 8 rentals I have only had a single place that was trashed and that was done by my tenants dirtbag kid! She was so very sorry for what took place and was very ashamed of her kids behavior. I submitted repair invoice and it was paid in less than 15 days and the place was ready for the new tenant in less that 45 days.
Most of the issues you seem to have are not just the tenant but also with the landlord. I always insepect my properties on a quarterly basis. This tends to eliminate many issues and any problems are addressed before they get out of hand.

I have rented to Sec. 8 tenants before, and I've had clients that have rented to them before. Between that combined experience, I would never do it again. This is a combination of California and Texas experiences. They will often offer more than market rent, and a large portion (sometimes 100%) of the rent is supposedly guaranteed by the government. Getting paid isn't really the problem. It's more the damage they due to the property when they leave. I've had them pack the home with 8 people and pitbulls. I'm sure there are some good people on Sec. 8. I just haven't run into them. Supposedly if they trash a house, they lose their certificate and get booted from the program. I've seen them bounce from one Sec. 8 house to another. If there was better oversight, would be a good program. Best of luck.

I have a section 8 rental. I must be the blessed one because my tenant is responsible. There are some months in the past 4 yrs that she did not make rent on time but usually takes care of it by the end of the month or the following month. I also have a regular tenant in a separate property. Again, it is probably my good screening and luck. She has been late several times in the past times. But overall it's good. I am planning to sell that property when she moves out for my personal reasons. Yes, I will have to pour in some good money to change carpet, repaint, etc. but I also recognize that it is harder to sell now. Hence, all that super hardwork. I wont let any buyers not put that house on their consideration list.

The key with the tenant is do they pay,that's all that matters.

If they are consistent and it's late who cares?

My friend that has a property management company has one that pays let every month.You always have to send them the letter saying if payment isn't recieved they will have to start eviction.The lease has penalties and extra fees built in for every day the rent is past due.The person has been paying this way every time for th epast 5 years!!

The owner loves it as they clear a couple extra hundred a month cash flow from it.

I used to think EXACTLY the same way, until I experienced (both personally and my clients) trashed homes once they left that required $10-15K in fix-up costs. Of course this can happen with any rental situation, but I've seen higher incidence of it with Sec. 8 rentals for some reason.

I think it depends on the neighborhoods, as well as the tennant. In the neighborhood with mostly Sec. 8 tennants, you will generally have more problems than in a neighborhood where Sec 8 rentals are less common.

There is a reason why 30-60K homes in some parts of the country rent for 800/mo.

I had a sec 8 apart. building before in Miami Beach. It's quite great. The only problem I had is when a tenant knows the sec 8 rights. The lanlord is always wrong. My example:
I had this tenant that use to cook like a pig. Grease all over the kitchen. He called the sec 8 dpt and I had a control regarding the insalubrity of the unit. He said I rented to him like that. I had to repaint or no more check. I had to Home depot for the $5 'oops' paint. I had a yellow one. I painted in yellow. I had another complaint and another inspection. I had to repaint the kitchen to the tenant's choice of color...Bottom line, I had no rights really...

What a load of bull!

I guess you failed to take the before pictures. Always, Always, Always take a set of digital pictures with the time and date stamp showing the complete condition of the apartment on the day they are given the keys.
If you do this you will have NO problems! If the tenant complains then you just show the inspector the pictures. Then tell the inspectors that you want their section 8 voucher status reevaluated and plan to evict them since they are causing a health hazard!

Good afternoon Paul,
I used to work rentals, managed 30 units the majority of which were Section 8 for five years. There is a blatant abuse of the system and despite following guidelines, the most I could do in two similar situations was have the BEFORE and AFTER pictures put in a file. The young lady had been a full pay Section 8 tenant for 15 yrs and had two children 9 and 7. Guess who is paying for her to have those children?

I inherited the property to manage and it became apparent that she was nothing but a disaster. Yet evicting her was next to impossible since the owner recieved full pay from LMHA every month. The health inspector gave a warning and did not follow up. Neighbors even complained. In the end, the property sustained about $10,000 worth of damages. Everything from walls, destroyed carpet, boarded windows (they broke them and Section 8 asked us to replace them on our dollar), and a large water bill. The water bill, like the trash bill in Lorain follows the property, not the occupant and it's law here that the landlord must pay it.

After we refused to do anything she eventually succumbed and moved. Collection efforts were obviously futile being as the income she recieved was "unearned" income and the pursuit was lengthy at best for nada. The farthest I got with the case workers and the head of LMHA was, "we will put it in their file". 36 pictures of destroyed house along with another 15 of what it it was like prior to. There were two of these incidents I was asked to manage that were like this. Granted, I've had a few good ones as well but by in large more than not we've run into this situation on Section 8.

Local laws and federal regulations have swung the pendulum far in favor of the tenant to the point that owners I've seen in the business for over a decade and longer are throwing their hands up and quitting (voluntarily or involuntarily). My city is over 50% rental property occupied and you're seeing a large percentage go under.

That is tax dollars funding this debaucho in which the government has no real interest in getting these people off the program. The case workers at our local LMHA are also on the program recieving assistance in several cases and if they truly wanted to solve the issue, they would be working themselves out of a job. If the federal government's real motivation was to create independent people, it would certainly take action in that direction. The idea, however, is to create as many helpless dependents as possible and in the inner cities of urban America they are doing a damn good job.

Hi Joey. There are pros and cons to offering your property to section 8. There are many resources out there but here is a post we did on Section 8 that might help.

Great information guys, appreciate it all.