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Author Topic: Why section 8?  (Read 7551 times)

Offline lucymay

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Why section 8?
« on: November 10, 2006, 05:29:02 pm »
I notice a lot of posters here own Sec. 8 properties. Why? (I'm a total novice, so sorry for the ignorant question) Is it due to the lower entry point? Are there advantages that compensate for what I would imagine are HUGE headaches that come from owning and renting this type of property? Personal preference(a niche, if you will)? I always thought it would be better to have a hotel on Park Place than a lot of little houses on Baltic Ave.
Thanks, and sorry again for the 'duh' question.
Michael

Offline Frank Chin

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Re:Why section 8?
« Reply #1 on: November 11, 2006, 12:37:24 am »
Why?? Don't you think the FIRST and most IMPORTANT order of the rental business is getting your rent like clockwork from the most creditworthy customers.

You get rent checks like clockwork from the govenment in section 8, and who's more creditworthy than the Federal govenment. And you get the rent even if the tenant is out of work, sitting home all day watching TV.

Personally, I looked into doing section 8, but didn't care for the area that I have to work in or the type of tenants I'll have to deal with, especially here in the northeast. In some areas, section 8  tenants can be very nice people just fallen on hard times.



Offline lansing_rei

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Re:Why section 8?
« Reply #2 on: November 11, 2006, 10:10:43 am »
We screen sections 8 tenants thoroughly like the rest of our tenants and have a lot of success with the program.  Get good tenants and guaranteed payment of rent.

Offline Iron Range

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Re:Why section 8?
« Reply #3 on: November 15, 2006, 06:35:47 pm »
I have two properties that are section 8.  The other posters were correct in saying the number 1 thing is getting rent every month.  Section 8  always pays, even if the tenant loses their job.

The only bad thing is that a Section 8 inspector has to inspect your property every year.  You then have to fix anything they find.  Things like 1 smoke detector per floor, broken windows, etc.  These are things that should be fixed and brought up to code anyways.
Great Tenants are an Investors Greatest Asset

Offline propertymanager

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Re:Why section 8?
« Reply #4 on: November 15, 2006, 07:37:22 pm »
Well, guaranteed rent is a bit of a stretch.  Section 8 normally only pays a portion of the rent and the tenant pays the rest.  The only portion of the rent that is "guaranteed" is the Section 8 portion.  Even that is not guaranteed.  

Section 8 tenants are just as likely as any other tenants to mess up.  I am evicting one this month.  She had no criminal record when we accepted her as a tenant, but is now doing drugs including herion.  I've also had section 8 tenants leave during their lease term because they wanted to shack up with a new boyfriend and for a variety of other reasons.  

Guaranteed rent?  Not hardly!

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Iron Range

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Re:Why section 8?
« Reply #5 on: November 15, 2006, 08:07:23 pm »
There is nothing in real estate that is 100% guaranted, but section 8 is by far the most likely to pay rent every month.  There are headaches with every property, and section 8 doesn't guarantee to eliminate those headaches.  But if the tenant does not pay their portion of rent then you can call section 8 and they will suspend them until they pay you.

For example I have a tenant who gets $503 from section 8 and pays $337 out of their own pocket.  If they don't pay and I evict them, they will not receive section 8 assistence until they pay me the owed rent.  So going from $358 to having to pay $840 is scary for most of them.  But there are some who just to care and will screw you over no matter what.

You are right in that there are headaches with tenants, but the Section 8 part does guarantee a portion of rent will always be paid, and it gives you a little more leverage on the tenant.

So in the end Section 8 does eliminate the tenants use of drugs or damage to property, but it does at least guarantee if the tenant doesn't pay you can at least count on a portion of the rent paid.  
Great Tenants are an Investors Greatest Asset

Offline propertymanager

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Re:Why section 8?
« Reply #6 on: November 15, 2006, 08:41:09 pm »
You wouldn't really accept only $503 for an $840 rental, would you?  If my tenants don't pay their portion of the rent, I evict them.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Iron Range

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Re:Why section 8?
« Reply #7 on: November 15, 2006, 10:17:40 pm »
I guess what I'm trying to get across about section 8 is that it doesn't guarantee that tenants won't do drugs or distroy property, or even pay their part of the rent.  But it does at least guarantee you will get the part of the rent that section 8 pays.

So section 8 isn't the answer to all problems, but it does help.  I can eat a $300 a month loss for a few months until I get a court order to remove the dead beats. But I can't afford an $840 a month loss for a few months until I remove a tenant through a court order.

One tenant I had paid $35 a month and section 8 paid about $509 a month.  She stopped paying so I went through all the process of evicting her. I never told section 8 she wasn't paying so I keeped getting rent from section 8 all the way up until she was removed.  The few months it took to get her out only cost me $35 a month.  But if this was a non-section 8 apartment I would have lost the full $544 a month. $544 a month for 3-4 months is a couple of thousand dollars vs. a couple of hundred.
Great Tenants are an Investors Greatest Asset

Offline propertymanager

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Re:Why section 8?
« Reply #8 on: November 16, 2006, 06:23:08 am »
Iron Range,

What state are you in?  In most states, you can not evict someone for non-payment of rent if you have received partial rent.  Therefore, you can not keep receiving Section 8 and do the eviction process at the same time.  I have done a lot of evictions and the magistrate always asks when I last received rent.  If you receive ANY rent during the period that you are claiming non-payment, the eviction is dismissed and you must refile.  

Mike  

www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Frank Chin

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Re:Why section 8?
« Reply #9 on: November 16, 2006, 08:46:08 am »

Seeing all the comments here, one point I didn't see mention is if an area is heavily "section 8", regular renters would avoid the area, so you're stuck with mainly section 8 tenants renting there.

When my sister's husband passed away, she needed some assistance, and wound up on "section 8" There was a beautiful complex of building where she lived in, but up close, only the one she lives in has a security guard out front. adults and children congregating outside, noisy, plus graffitti. Neighboring buildings by contrast are quiet and clean by comparison.

She mentioned people with assistance are all channeled to that one building so building management can keep an eye on things.

After here daugher got married, her husband became a contractor and made a good living rehabbing units when section 8 tenants vacate. He says on at least half of them, he does a major overhaul, even new kitchens, or a new bathroom that he was showing me.

Which is why I paid a little more on properties I buy, maybe does not cash flow that well up front, but long term, I avoid many of the issues, and get paid more than one months security to boot.



Offline Iron Range

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Re:Why section 8?
« Reply #10 on: November 16, 2006, 09:07:12 am »
9 out of 10 times an eviction will never end up going to court.  The tenant will know they have used up their landlord and just leave.  But the time period for that to happen takes several months.  During those months you will receive section 8 rent.  If the tenant will not leave the property then you would have to stop all rent and go to court.  But that is not common, most of the times a dead beat tenant will know they have used up all the resource they can and move on to the next victim.  People who are both poor and scum bags like to stay under the radar, they don't want to get the ''Man" involved.



 
Great Tenants are an Investors Greatest Asset

Offline propertymanager

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Re:Why section 8?
« Reply #11 on: November 16, 2006, 03:46:37 pm »
Iron Range,

Clearly you don't have many rentals and haven't been doing this long.  I wish that 9 out of 10 times an eviction never even went to court.  The truth is, if it doesn't go to court, it is NOT an eviction.  Tenants do not care if they've "used up their landlord".   Most deadbeats would live in your unit forever if they don't have to pay rent.  Most successful landlords start the eviction process on any tenant the day after the rent is late.  Poor scumbags don't care about staying under the radar and it does not bother them one bit to go to court and explain to the magistrate what a victim they are.  I don't know where you came up with your information, but it is not correct.

Again, what state are you in?  I don't know of any state where it takes several months to make it to court.  Are you just making this stuff up?

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Iron Range

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Re:Why section 8?
« Reply #12 on: November 16, 2006, 06:46:12 pm »
I invest in the Iron Range of Minnesota.  Like most of your posts you have nothing of substance to say.  Most of the time if a tenant is not paying they will leave without having to go to a court and get a court order and have the police remove them. If you didn't let deadbeats into your place then you wouldn't have so many problems.  It sounds like your the one who is burned out with real estate.  Perhaps you should be doing something else if this is so horrible for you.  

p.s. if you want to be an ass then go to a different site.  People here are like me and our looking for Q&A not negativity.  
Great Tenants are an Investors Greatest Asset

Offline propertymanager

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Re:Why section 8?
« Reply #13 on: November 16, 2006, 09:24:44 pm »
Iron Range,

I'm not trying to be negative, just accurate.

Almost everything you said is factually incorrect.

1. Section 8 rent is not guaranteed.  The tenants can do a bunch of things to cause Section  
    8 terminate their eligibility.
2. Section 8 tenants are not better than any others.  
3. You have not evicted someone, if they don't go to court.
4. It does not take several months to go to court in the vast majority of the US.
5. Most tenants that refuse to pay will not leave voluntarily.

If you are going to post, then at least try to be accurate.

Mike

www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Iron Range

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Re:Why section 8?
« Reply #14 on: November 16, 2006, 09:50:02 pm »
1. You are just twisting words. Section 8 will pay rent every month.  It is obvious that there are ways for a tenant's benefits to be terminated. What is your point?
2. What is your point in #2?  We're not talking about tenants we're talking about section 8.
3. Just because you didn't go to court doesn't mean that they weren't kicked out do to none pmt of rent.  Don't play dumb.
4. What is your point? Again talking about nothing.
5. Most tenants who fall behind on their rent will leave before a court order is needed and the police are called out.  Maybe you need to do more research on your tenants before you let all these deadbeats you seem to have into your place.

The benefit in having section 8 is that part of the rent is always paid on time.  It obviously doesn't guarantee good tenants, because that is your job.  Its your job to find and research tenants.
Great Tenants are an Investors Greatest Asset

 




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