Section 8 housinf

How funny you should ask!
Y'know that when your focus is on one thing, you become in tune to everything about it.
I was in a waiting room today and I overheard a man talking to a friend about the fact that his house has been in foreclosure for a little over a year (grateful to have been able to stay in the house for all of that time) but now has received, I think he said, a 60 notice. I am guessing that this must mean a 60 day notice to vacate?
Not quite what you asked I know, but his friend started to talk about rental properties. One house where he knew the owner, the other house was in his neighborhood ... from what I heard, the section 8 tenants had, to paraphrase, 'destroyed' those beautiful homes!
I TRULY HOPE THAT THIS IS NOT THE NORM, and I was very surprised to hear this. I am sure that this is not everyone. (Yes, I'm a believer in the good in people) However, I do not have any first hand knowledge about this. Anyone else?

Angela

I asked that question a while ago. The answer i got made sense. I was told if you think about it. There are good and bad renters no matter if they are section 8 or regular people. You have to weed out the bad renters.
I have a cousin who's friend specializes in section 8 renting. He is making a fortune with it.

In my opinion, and from personal experience, Section 8 housing is definitely the way to go, under the right circumstances.

As you well know, this program is for lower income families who are in need of public assistance. If you are investing in the lower income neighborhoods with very high rental density, which is where some of the very best deals are, this niche is ideal.

It's not unusual to purchase properties for 50 cents on the dollar that only need light to medium cosmetics. It's also not unusual to pick up properties that need a total rehab for 25-30 cents on the dollar. These can be real money makers if handled right. REOs are perfect for this scenario. There are tons in these areas.

The property does not have to be in perfect shape, as if you were retailing, but there are certain standards that must be met. Your local housing authority can provide you with a landlord package that explains the whole process and the housing standards etc.

When you advertise for a Section 8 tenant be prepared to get flooded with calls. There are more participants than properties available. Screen them as you would any other tenant with the exception of their income - it doesn't matter because someone else is paying the rent. Just make sure their voucher is enough to cover the rent you are asking.

Upon approval the tenant will give you a packet of info to fill out, then they will turn it in to the local housing authority for processing. The hosing authority will schedule the inspection of the property and note any violations. If there are violations, you will need to correct the problem(s) and have them reinspect. That's why it's best to know their requirements beforehand so you can correct any potential problems before the initial inspection.

Once the property is approved and the paperwork completed, your tenant moves in and you start collecting automatic rent checks the first of every month.

Most of our tenants do not mistreat the properties. They realize they can lose their voucher if we file a complaint. Two complaints and they are out of the program.

The rental amounts we collect are usually at a premium but can't be excessive. The housing authority sets guidelines on rental rates, but in my area they are sometimes 20% higher than standard rentals. They can be very lucrative.

I guess the only disadvantages would be the areas are not always the greatest and the houses are generally older and sometimes require more maintenance, but if you weigh it all out, it's not that bad.

CTP

Hope this helps

Thanks for the info. I'll have to check it out.

I agree with B.C. I know people who are excellent tenants on section 8, but then there are one that are hoorible. It is best to just check references. The great thing about it is the money is guaranteed!

Thanks VDIAZ,

That's the part I really like. I didn't realize I get to choose the tenannts.

Thanks

A good way to improve relations with any tenants is to reward them with something for being a good tenant, thus with a possible overpayment by the govt for rent, refund the overpayment in maybe some type of gift card like from a grocery store or gas card, where they won't be tempted to use straight cash for something ridiculous or illegal.

That's a good idea. Definitely something to think about if I do it. Is that something that usually happens, overpayment?

I agree with the above. A couple of other things to keep in mind though. If the voucher doesn't cover the rent you are charging, the tenant is expected to pay the difference. My experience is that they have very little incentive to do so. If they don't pay, you can complain but that's about it.

Also, you are stuck with the tenant for a minimum of a year, unless their are extenuating circumstances such as dealing drugs, totally trashing your place, etc.