I have a home that I’m going to be renting out soon, and someone suggested section 8 tenants. I only know a little about section 8, mostly bad stories. But, would anyone like to comment on the subject. Do any of you have section 8 rentals? I would like to hear some of the pros and cons, and anything that might be helpful in my decision.
I dont rent currently to a section 8 tenant, but I do know that you and your property have to go through some red tape to qualify. You get the option to screen tenants before they move in. You also will get your self a very frequent check that you can bet on will make it in the mail when the dust settles from the government. I hear that tenants dont move out often so if you get lucky with one it might work out well for you. I hope this helps some.
I can only speak for section 8 in Cleveland, Ohio, other states could be different…but I doubt it.
Cons to Section 8: Sit back, this may get long…
:banghead - You don’t always get paid on every property
:banghead - Section 8 is more tenant friendly than landlord friendly
:banghead - inspectors have power trips and start giving violations on stupid Sht… er… the trim under the shingles on the front of the house needs to be repainted, even though it’s impossible to see it with the naked eye from the ground.
:banghead - Tenants move out without informing you and section 8 fails to inform you that tenant is leaving, you only find out when you don’t get paid one month and you go into to find out why. “Oh, you didn’t get notice? Well we mailed it to you.” Yeah, bs.
:banghead - Inspector require you to sit and wait during a 3 hour window for them to show up for a home inspection, which they don’t always show up for.
:banghead - Section 8 doesn’t always pay enough for you to make a profit on the house.
:banghead - Tenants believe you are their btch and should do whatever they demand
:banghead - Tenants see you as the rich landlord with unlimited funds
:banghead - Tenants take better care of their cars than they do your home. I honestly don’t know that I have ever seen a vacuum in any of our section 8 tenants homes. That’s no joke either.
:banghead - Tenants can get kicked off of section 8 and you not know, even though section 8 is supposed to tell you
:banghead - If a tenant complains your expected to have a solution in a timely manner; if you complain you’ll be lucky to get a solution at all
:banghead - There is a high turn over at section 8 so your always dealing with new people who don’t know and don’t care.
:banghead - Inspections are every 8 months, unless tenant requests an inspection
:banghead - Landlord is rarely informed of first inspection thus you miss it and fail, three fails and the property loses funding
:banghead - The three inspection are very easy to fail because inspectors really do show violations of stupid stuff.
:banghead - You must have all utilites on and in your name prior to first inspection. If not it’s an automatic fail. A second problem to this is that when you move in the tenant they more often than not neglect changing utilites to their name, meanwhile racking up thousands of dollars in utilitiy bills which you are required to pay. If you don’t pay the utility companies will shut off service which is a violation of section 8 and an instant failure.
:banghead - Co-payments can change monthly without notice to you. They base the co-payments on the tenants job. The tenant will have a job when they move in, then quite after they get moved in to your home. After they quite their job you are unable to collect their copay. It is your responsibility to collect their co-pay, if they don’t pay it then you have to evict, but in order to evict you have to stop accepting section 8 payments for that property. Then the tenant milks the eviction for months then, before the judges ruling, like the day before, they move out leaving you thousands of dollars in damages and missing rent. The courts may rule in your favor but you will never collect form the tenants. You will have better luck getting blood from a turnip.
:banghead There is more but I’m to tired to keep going, but I think you get the point.
Pro’s to Section 8:
You get paid something on time every month. Kind of… Most the time…
Bottom line, section 8 is a royal pain in the ass. It is not a government agency, it is a private business either for profit or as a non-profit who receive their funding through grants, thus they are not required to follow the same rules as government departments.
The only reason we still use them is because even minus the co-pay we still receive more than renting to those who are not section 8. Non section 8 in this area just aren’t worth the headaches of renting too. They’re just as bad as section 8 tenants but they don’t pay at all so you lose all around. At least section 8 pays something most of the time. Plus we don’t hold on to our properties very long. We rehab them, move in section 8 renter and resell the property’s to investors. For now it’s a necessary evil for us.
We had over 50 section 8 properties at the same time…notice I said “HAD”!
WE HATE SECTION 8 WITH A PASSION!
I don’t agree with either of the other posters. I have many Section 8 tenants and find that they are EXACTLY the same as any other low-income tenants. Fortunately, I have not had the bad experience with Section 8 that Foreclosure Negotiator has had (and I’m in Ohio also). The difference may be that I have a good working relationship with the PEOPLE at Section 8, which is IMPORTANT. In fact, I have found them to be very helpful and cooperative.
The good thing about Section 8 tenants is that accepting Section 8 tenants gives you a larger pool of potential tenants to choose from. In my opinion, about a quarter of the American population are too lazy to work and a LOT of these people are on Section 8. Bottom line – accepting Section 8 helps to fill rental units.
The worst thing about Section 8 is that your property must pass an initial inspection and an annual inspection thereafter. If the tenant has a child under 6 years old, they inspect for loose or flaking paint and even paint dust (especially around windows). This inspection is a nuisance.
Otherwise, having Section 8 tenants is just like having any other tenants.
Mike
I agree with propertymanager. Section 8 does not “assign” a tenant to you. You screen the tenant just like they were paying out of their pocket. I guarantee that if they kicked holes in the walls of the place they just left, they are going to kick holes in your wall also. You can turn them down just like you turn down any other tenant.
Foreclosure Negotiator is not wrong but I have some comments on some of his points:
- Section 8 is more tenant friendly than landlord friendly - But tenants are afraid of losing their section 8 benefit. You can use that to threaten the tenant to get cooperation.
- Tenants move out without informing you I drive by all my units at least once per month. The most headstart they can get on me is a month.
- Section 8 doesn’t always pay enough for you to make a profit on the house. Don’t ever rent a house for less than your business plan dictates. If section 8 won’t cover your costs then don’t accept section 8.
- Tenants believe you are their b*tch and should do whatever they demand. A part of screening tenants is looking for that entitlement mentality. If you see it section 8 or not DON’T let them into your house. Look for respectful kids. If the kids are running around like Taz, and as soon as the mother says get over here. If they stop in their tracks and say yes ma’am. That is a start. If she never call them to heal, or she calls them and they act with an attitude they will tear you house up and be mad at you for not fixing it before the sheetrock hits the floor.
- Tenants see you as the rich landlord with unlimited funds. See above
- Tenants take better care of their cars than they do your home. I honestly don’t know that I have ever seen a vacuum in any of our section 8 tenants homes. That’s no joke either. They also can’t afford to pay rent but they all have cable or satellite TV and a big screen TV.
- You must have all utilites on and in your name prior to first inspection. If not it’s an automatic fail. A second problem to this is that when you move in the tenant they more often than not neglect changing utilites to their name, meanwhile racking up thousands of dollars in utilitiy bills which you are required to pay. If you don’t pay the utility companies will shut off service which is a violation of section 8 and an instant failure. I always have utilities on in on my name while a place is empty. I always schedule utilities to be turned off the first day the tenant is allowed possession. The tenant is told this at lease signing and I make sure they know they will be in the dark the next day if they don’t get down there and have the utilities transferred. Do this while they are excited about their new home and have some money before they buy a new big screen TV for their new home. - Co-payments can change monthly without notice to you. They base the co-payments on the tenants job. The tenant will have a job when they move in, then quite after they get moved in to your home. After they quite their job you are unable to collect their copay. It is your responsibility to collect their co-pay, if they don’t pay it then you have to evict, but in order to evict you have to stop accepting section 8 payments for that property. Then the tenant milks the eviction for months then, before the judges ruling, like the day before, they move out leaving you thousands of dollars in damages and missing rent. The courts may rule in your favor but you will never collect form the tenants. You will have better luck getting blood from a turnip. You need to be in Texas. You file for eviction the day the rent if late. When you get to the judge (usually in 2 weeks) the only defense the tenant can show is that they paid. If they can’t then they are out.
It depends on the HA administering the program. Some view the LL as the enemy and will direct the tenant to free legal aid for any disputes. Some are picky on repairs and use the smallest excuse to withhold rent. Some are more reasonable. Get local recommendations for the area where you own property.
I don’t have any Section 8 tenants, but for me the bottom line is this.
There are a lot of people who got very rich renting to Section 8 tenants, and there are a lot of people who got very broke.
It’s possible to make money, just as it is in most businesses, but you have to know the risks, identify them, and manage them.
We hear more about the bad side of Section 8 than the good because people are more likely to talk about something bad than something good.
I stand by every word I wrote in my last post. It’s obvious to me now, that I seem to have picked one of the worst places in the country to deal with section 8. It’s impossible to build any relationships with the people who works at the Cleveland section 8 because as I stated, they have a really high turn over. Even the upper management gets changed at least once or twice a year. I have yet to see a single section 8 employee who has been working there for longer than a few months who really gives a dang about the landlords, the tenants or any other part of their job.
All I can say is that if you’re section 8 does not resemble this, count your blessings and don’t ever come to Cleveland with the plans of using section 8 as a primary source of rental income unless you have plenty of time on your hands and you’re ready to deal with the frustration. It got to the point that we had to have one individual who was dedicated to handling section 8 full time.
It is nice to hear that other section 8 offices are not like this one.
I don’t see anyplace in this thread that the word “assign” is used other than in the quote above…
That is right. That means you PICKED those crazy tenants. If you screened them properly you knew they were crazy when you picked them up. All real estate is local and you probably have a different tenant pool than I do here in Texas, but in general you have a bunch of people to choose from. I use the example of a bus. If you miss the bus (or a tenant), there will be another one coming along soon enough. But as far as screening tenants, remember that people don’t change they act like they have always acted. A tenant doesn’t start as a normal person and then turn into no rent paying hole in the wall kicking, entitlement minded tenant when they walk into your place. They were like that all along. What your job is when they walk up and say they want to rent your house (section 8 or no section 8) is to determine if they are good tenants or bad tenants. Never let bad tenants into your property. Pay the mortgage yourself for 3 months before you do that. You will be able to rent your place in 2 weeks regardless as to how hard you screen.
Just one more bit of psychology in landlording mistakes are made for 1 of 2 reasons. #1 Lazy, #2 Greedy. Either a person is too lazy to properly check out the applicant, and a bad guy slips in, or the applicant waves a large sum of money under your nose and your greed overrides your good sense and you let that scum in…and that is the last money you get from them.
If I do let in a person that I know is bad, I will charge him additional deposit. I will charge him 2 or even 3 months deposit. You may want to check local laws to see if there is a legal cap on deposit size. But in Texas I can charge at least 3 months plus first months rent. If he says no and walks, then he just saved me from renting to a bum that is not only going to kick my walls in but also leave me with not enough deposit to bring the place back. These bad tenants need to rent from somebody else.
I want to thank all of you for your input on this subject. I figured I would hear a lot of good and a lot of bad. But it’s all good news to me, and it’s what I wanted to hear. You all gave me some food for thought from both angles. Thanks again…(I’m in Chicago)…will let you know later about my decision.
That is right. That means you PICKED those crazy tenants. If you screened them properly you knew they were crazy when you picked them up.....A tenant doesn’t start as a normal person and then turn into no rent paying hole in the wall kicking, entitlement minded tenant when they walk into your place.
While I strongly agree with you that screening is important, I do not agree that people can’t change while in your rental. People can and do go bad. People who have no record of past problems can and do start taking drugs; can and do become a drunk; can and do lose their job and decide they don’t need another one; can and do get a divorce and become distraught (taking it out on your property), etc. Until this month, I haven’t had an eviction for several months. One of my tenants decided to spend her rent on alcohol and crack instead of rent. Two other tenants decided to move out without notice (the first time I ever had that happen). One moved out to shack up with her latest boyfriend (which was fine with me because she had two horrible children and the apartment is trashed) and I think the other couple broke up (but left the property in very good condition). I do a very thorough screening and nothing I could have done could have predicted any of these situations. Things like that happen and are just part of the business.
Mike
What is a Section 8 tenant?
Please disregard my last post “what is a Section 8 tenant”