There are houses in a closeby, low-income neighborhood that range anywhere from $10,000-$40,000. I now have an income from my job that will make it possible to save and pay cash for some of these types of houses.
I want to do some research on Section 8 to find out how that whole deal works. You guys know of any good places to get some info?
You should contact your local housing board. They should have a landlord package for you. That will get you started.
You definitely want to have some knowledge of your state’s landlord/tenant law as well as a good understanding of fair housing rules.
It all sounds more difficult than it really is; just a little time consuming to start.
Be aware that it could take a couple of months for your first Section 8 check from the Government to show up. But that first check should catch you up to current and then it will arrive on time each month.
Wish you Good Success
Thanks. I’ll do that
Also, if anybody has rentals that are on section 8 I’d love to know how it’s worked out for you.
Screen them like any other tenant!!! There are good renters and bad renters even in that pool. Additionally, Section 8 has rent limits and inspection requirements. Our local housing authority has a class for landlords looking into Section 8 once a month. Good luck!!!
Here in Cleveland there is a mandatory new owner briefing class. It lasts about 2 hours and they walk you through all the steps. This may be applicable in all states. I was in a class of about 25 and there were questions about everything.
Most important thing is what they offer is almost always much lower than what you can get on the open market. This is caused by the utility allowances they deduct. With this particular house, I chose to take lower guaranteed money and still turn a small profit.
Well that stinks. I heard from people (who don’t really have experience w/ sect. 8) that you usually get higher than market rent. I’d probably rather the lower amount also since it’s guaranteed.
Shaun,
The rent is NOT guaranteed with Section 8. Most Section 8 tenants are required to pay part of the rent and they do fail to pay their portion of the rent. In addition, Section 8 tenants (just like regular tenants) do an infinite number of stupid things and get kicked off the Section 8 program. In addition, Section 8 tenants have all the normal issues that any tenant has. They will move out in the middle of the night to live with a new shackup boyfriend; they will spend their money on a big screen TV from the Rent-An-Appliance store instead of paying their portion of the rent; they get involved in drugs and prostitution; etc, etc, etc. The point is that there is NOTHING guaranteed about Section 8.
In addition, Section 8 rents can be higher or lower than normal rents. You need to check with your area for each Section 8 potential tenant to see what Section 8 will pay.
Good Luck,
Mike
You are very correct Mike. Every case stands on it’s own merits. However in my case the only reason I went Sec 8 was
- The tenant is a personal family friend that we can vouch for.
- Her portion of the rent is zero
3 I had a SF that was vacant and she wanted to move from a Sec 8 apartment to a house. Other than those facts, I will keep flipping. Would not do Sec 8 again. (Don’t have the stomach)
So Mike, do you prefer to have your lower income properties on Sect. 8 or do you not use it?
Shaun,
I have a bunch of Section 8 tenants and a bunch of Non-section 8 tenants. The Section 8 tenants are exactly like Non-section 8 tenants. The only real difference between the two types of tenants is the Section 8 inspection, which is a pain in the butt. So, I accept Section 8 tenants because it helps to fill units. If I could fill all my units without Section 8 tenants, I would do so.
Mike
shaun,
If you want to learn more about sec 8 you can go to http://www.gosection8.com
I just finished having a 4-plex renovated in san antonio and two of my tenants are sec 8. We passed inspection without a problem - it cost me about $200 to upgrade a few things. For instance I needed space heaters, deadbolts, and I can’t remember what the other stuff was.
Both are paying market rents - 550/mo for a 1 bedroom. One of the vouchers gives an allowance from housing to pay $80/mo utilities - so I’m actually getting 630/mo. the only catch is, even though it’s separately metered, I have to pay for utilities.
joe
$80 for utilities per month is not a profitable amount for you. I would estimate with reasonable usage by a somewhat responsible tenant you could expect water/sewer to run $25 and electric $55. There goes your $80, right? So now you might make a few pennies off this utility allowance, but what happens when your tenant realizes they don’t have to give a crap about utility usage because they’re not paying for it? Your few penny profit just went negative.
If it were me, I’d let them keep the utility allowance and make the tenant responsible for their own utilities. You already have a bonus with having separate meters anyway. Many smaller buildings don’t have utilities separated. Take advantage of this fact and protect yourself against an uncaring or vindictive tenant.
That’s true, but the tenant has agreed to pay the difference if they go over that $80
I have section 8 and non section 8 tenants and as I look for more tenants would rather have those with some form of government subsidy. I rely on my rents for income and I don’t want to hear about how a tenant lost his job, how his company cut his hours, or any one of a thousand excuses. In these trying times, it is assuring to know checks will be there. I have had rentals for over 20 years and my worst experiences have been with non section 8. If a section 8 tenant screws up, they lose their eligibility which they don’t want to do. Also, regular annual inspections will keep you abreast of any issues within the home and the inspectors know what was damaged by the tenants.
You should contact your local housing board. They should have a landlord package for you. That will get you started.
You definitely want to have some knowledge of your state’s landlord/tenant law as well as a good understanding of fair housing rules.
It all sounds more difficult than it really is; just a little time consuming to start.
Anyone aware of any Section 8 landlord groups or seminars in cleveland?
I’ve never heard of a Section 8 landlords group. I would suggest joining your local REIA. Any local REIA should have plenty of landlords who take Section 8.
Mike