sec 8nswers It's not that complicated folks

[Bob Stevens]

Ok so it seems EVERYONE is making renting to sec 8 MUCH more complicated than it needs to be, not sure why. Maybe some guru is selling courses and telling everyone it is. Well, it's not. So here are answer to most of the questions I am seeing. 

Screen EXACTLY as you would for any tenant. 

When buying a prop, with a tenant already in, YES, get a copy of the HAP, agreement and lease, Call the office and make sure all is in order, DO NOT trust the seller. 

YES, the SD will come to you, if not, NOT your problem, Tell the tenant previous owner never gave to me. 

YES, you WILL fail your inspection, so what, everyone does. They will provide you with a list of items, do them. You have 30 days (in most states)

NO NEVER supply appliances (OH you do not have to) Why? When they break its your problem, when the tenant brings their own, yep, it's their problem.

If they do not pay their portion (if they have one) you say, " hey you are breaking the rules of your program, if you do not pay you will " lose your free ride ". watch how fast they pay. If not, evict, the same way you evict any tenant. 

NO, you do not determine how much sec 8 is going to pay, it's based on the FMR and in some cases they pay more.

If the tenant is not allowing access to do a repair (NEVER in 10 years has this happened to me) you put a 24 notice on the door and go in. ITS YOUR house not theirs. If they still give you a hard time, (not sure why they would make no sense) turn on your phone and record it. Tell them you are calling the office, and they just may lose their free ride. Watch how fast they accommodate you. Folks its ALL about wording, Be tough but polite.

Rent amount, they pay the FMR, and is some cases more. If you get a rent increase and the tenants portion goes up a little and they complain, say oh well you can leave, but the new place will have the same rent amount. So, suck it up and pay the extra X or move to a lower " class" area where the FMR will be lower. Either way I am getting the rent increase.

Best sites to market your property, the Sec 8 site.

Last, you rent to them the same exact way you rent to anyone, just more paperwork. 

Folks stop making it more difficult than it needs to be, buy right, Reno right, rent right, exactly how you would with any tenant.

I hope my suggestions help good luck to all.

[Alyssa Wright]

Couldn't agree more! 

Sure the process takes a bit longer with the extra paperwork but overall, it's a very simple process. I think a lot of the issue comes with the negative stigma that people have about Section 8 and the people on it. 

[Bob Stevens]

Quote from @Alyssa Wright:

Couldn't agree more! 

Sure the process takes a bit longer with the extra paperwork but overall, it's a very simple process. I think a lot of the issue comes with the negative stigma that people have about Section 8 and the people on it. 

 SO MANY are making /thinking its so complicated. 

All the best 

[Greg M.]

Or, you can rent to a regular tenant and not have to deal with the extra paperwork, the lost time/rent, the failing inspections and the power hungry inspectors, the justification for rent increases, and the government. Plus it's all much faster.

I'm sure S8 is great for D-Class properties and the problems that come with them, but for regular units, I'm going to say nope!

[Brian Kloft]

I think a lot of the problems people have with failed inspections and such come from Landlords that don't like to maintain their properties. If you are a good landlord and fix things when there is a problem, like you would with any other tenant, then you won't have any problems. However I know there are a lot of slumlords out there that will only fix something when they are forced to. They don't like Sec 8 because they are forced to every year and they can't bully the tenant into just accepting it. 

The other group of Landlords that can't seem to handle Section 8 are those that are so tight on cash that they freak out if they go a month without rent between tenants. Since you often don't get the first month's rent until the second month, along with the second month's rent; although sometimes you get it half way thru the first month. Those Landlords that are so tight on money will chose whomever can come and give them cash now so that they can pay their bills tomorrow as they have no reserves to float it for 30 days when Sec 8 catches up with everything.

Of all the tenants that I have had on Sec 8 over the many years the only real problems I have had are with those tenants that game the system. It doesn't really affect me, other than as a tax payer. It just really bugs me when I have one of those tenants that are abusing the system and shouldn't actually be on Sec 8 and thus are taking a spot away from someone that really needs it to help get back on their feet. It is a small percentage, but it bugs me nonetheless. 

[Bob Stevens]

Quote from @Greg M.:

Or, you can rent to a regular tenant and not have to deal with the extra paperwork, the lost time/rent, the failing inspections and the power hungry inspectors, the justification for rent increases, and the government. Plus it's all much faster.

I'm sure S8 is great for D-Class properties and the problems that come with them, but for regular units, I'm going to say nope!

 Well sec 8 pays more than cash, in most areas. The only reason you will lose money on rent is if you are incompetent, its a MINOR repair do it. Also, you are not putting sec 8 into 500k +++ homes, mostly for the lower income areas.  I have sec 8 in B - D areas most of them treat the house better then cash tenants.  LOVE IT. They pay the 1st week every month.

All the best  

[Steve K.]

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

[Mary Smith]

Thanks for sharing this @Bob Stevens This was a good read!

[Brian Kloft]

Quote from @Steve K.:

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

 Sounds like another example of RE being local. Most of my Sec 8 housing that I delt with has been in Phoenix AZ. While there are project housing apartments that are not in good areas, sec 8 tenants were able to rent anywhere and with our rapid expanding and relatively cheap housing; they were renting in regular middle of the road blue collar neighborhoods. I rented a lot of brand new houses to sec 8 tenants. My experience was that my percentage of sec 8 tenants that trashed properties was about the same as those that were not on sec 8. It sounds like most of your sec 8 rented properties were in a much worse neighborhood than your other properties. I would guess that if you had non sec 8 tenants in those same neighborhoods that you would have had the same problems with them. Thus the issue was probably more of a issue with being in a lower level neighborhood than who the renter was. 

I had some experiences where the sec 8 tenant was a single mother but her "boyfriend" lived there 11.5 months of the year. He couldn't be there the two weeks that the inspection would happen or she would no longer be low income, since he had a good job, and she would lose her free money (voucher). That kind of stuff is what really drives me the most nuts about the program, the fraud/abuse of the system. It happens on just about any large free money program. However there are also those tenants that I see are getting to raise their kids in a much safer/nicer neighborhood than if they didn't have it; and I have seen some people be able to move up in their career and their portion of rent get higher and higher, over the years, until they got off sec 8. Of course, now that I have some properties on the coast, it drives me nuts every time I see a person that just got their voucher in a larger city decide that now that they have their voucher it is time to go move to the more expensive coastal town. It's like they got their golden ticket so now it is time to go live and relax in a small vacation town. 

[Charles East]

Quote from @Bob Stevens:

Ok so it seems EVERYONE is making renting to sec 8 MUCH more complicated than it needs to be, not sure why. Maybe some guru is selling courses and telling everyone it is. Well, it's not. So here are answer to most of the questions I am seeing. 

Screen EXACTLY as you would for any tenant. 

When buying a prop, with a tenant already in, YES, get a copy of the HAP, agreement and lease, Call the office and make sure all is in order, DO NOT trust the seller. 

YES, the SD will come to you, if not, NOT your problem, Tell the tenant previous owner never gave to me. 

YES, you WILL fail your inspection, so what, everyone does. They will provide you with a list of items, do them. You have 30 days (in most states)

NO NEVER supply appliances (OH you do not have to) Why? When they break its your problem, when the tenant brings their own, yep, it's their problem.

If they do not pay their portion (if they have one) you say, " hey you are breaking the rules of your program, if you do not pay you will " lose your free ride ". watch how fast they pay. If not, evict, the same way you evict any tenant. 

NO, you do not determine how much sec 8 is going to pay, it's based on the FMR and in some cases they pay more.

If the tenant is not allowing access to do a repair (NEVER in 10 years has this happened to me) you put a 24 notice on the door and go in. ITS YOUR house not theirs. If they still give you a hard time, (not sure why they would make no sense) turn on your phone and record it. Tell them you are calling the office, and they just may lose their free ride. Watch how fast they accommodate you. Folks its ALL about wording, Be tough but polite.

Rent amount, they pay the FMR, and is some cases more. If you get a rent increase and the tenants portion goes up a little and they complain, say oh well you can leave, but the new place will have the same rent amount. So, suck it up and pay the extra X or move to a lower " class" area where the FMR will be lower. Either way I am getting the rent increase.

Best sites to market your property, the Sec 8 site.

Last, you rent to them the same exact way you rent to anyone, just more paperwork. 

Folks stop making it more difficult than it needs to be, buy right, Reno right, rent right, exactly how you would with any tenant.

I hope my suggestions help good luck to all.

 This is the way.

[Steve K.]

Quote from @Brian Kloft:

Quote from @Steve K.:

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

 Sounds like another example of RE being local. Most of my Sec 8 housing that I delt with has been in Phoenix AZ. While there are project housing apartments that are not in good areas, sec 8 tenants were able to rent anywhere and with our rapid expanding and relatively cheap housing; they were renting in regular middle of the road blue collar neighborhoods. I rented a lot of brand new houses to sec 8 tenants. My experience was that my percentage of sec 8 tenants that trashed properties was about the same as those that were not on sec 8. It sounds like most of your sec 8 rented properties were in a much worse neighborhood than your other properties. I would guess that if you had non sec 8 tenants in those same neighborhoods that you would have had the same problems with them. Thus the issue was probably more of a issue with being in a lower level neighborhood than who the renter was. 

I had some experiences where the sec 8 tenant was a single mother but her "boyfriend" lived there 11.5 months of the year. He couldn't be there the two weeks that the inspection would happen or she would no longer be low income, since he had a good job, and she would lose her free money (voucher). That kind of stuff is what really drives me the most nuts about the program, the fraud/abuse of the system. It happens on just about any large free money program. However there are also those tenants that I see are getting to raise their kids in a much safer/nicer neighborhood than if they didn't have it; and I have seen some people be able to move up in their career and their portion of rent get higher and higher, over the years, until they got off sec 8. Of course, now that I have some properties on the coast, it drives me nuts every time I see a person that just got their voucher in a larger city decide that now that they have their voucher it is time to go move to the more expensive coastal town. It's like they got their golden ticket so now it is time to go live and relax in a small vacation town. 

 You're correct, my S8 rentals were in much worse areas than the others, so it is more about the location than whether or not the tenant is S8. Now that source of income is a protected status in CO, landlords can't deny a tenant based on the applicant using a voucher so govt. subsidized renters can rent anywhere that they can find something they can afford. There are still areas that are comprised of predominantly S8 rentals however, and they tend to be Class C/D locations. I had some buildings where about half the units were S8. Everything I own now is in Class A/B areas and I haven't had any S8 tenants apply for any of those units.  

[Jay Hinrichs]

Quote from @Brian Kloft:

I think a lot of the problems people have with failed inspections and such come from Landlords that don't like to maintain their properties. If you are a good landlord and fix things when there is a problem, like you would with any other tenant, then you won't have any problems. However I know there are a lot of slumlords out there that will only fix something when they are forced to. They don't like Sec 8 because they are forced to every year and they can't bully the tenant into just accepting it. 

The other group of Landlords that can't seem to handle Section 8 are those that are so tight on cash that they freak out if they go a month without rent between tenants. Since you often don't get the first month's rent until the second month, along with the second month's rent; although sometimes you get it half way thru the first month. Those Landlords that are so tight on money will chose whomever can come and give them cash now so that they can pay their bills tomorrow as they have no reserves to float it for 30 days when Sec 8 catches up with everything.

Of all the tenants that I have had on Sec 8 over the many years the only real problems I have had are with those tenants that game the system. It doesn't really affect me, other than as a tax payer. It just really bugs me when I have one of those tenants that are abusing the system and shouldn't actually be on Sec 8 and thus are taking a spot away from someone that really needs it to help get back on their feet. It is a small percentage, but it bugs me nonetheless. 

as someone who had over 200 Section houses.. I totally disagree with your thought process here.. its the tenants that cause the damage that make the house fail inspections. its not slumlording in almost all cases. Your section 8 tenant 80% of the time or more is a single mother with multiple children.. And we all know you have toddlers and pre teens and they are rough on houses.. Also the tenants simply will not fix ANYthing it breaks they dont care.

A lot of misconceptions with Section 8 IE its guaranteed rent ( not really) tenants lose their vouchers get kicked off the program and wont leave.. U play hell collecting their portion . depending on area.. its not so easy to get them kicked out of the program for not paying section 8 wont do a thing about that.. for some I get it if you have a stable of D and low C class props those are were section 8 generally is because they pay more and nicer props you simply dont need section 8 its only d class that you absolutly need it.

[Jill F.]

Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

[Bob Stevens]

Quote from @Steve K.:

Quote from @Brian Kloft:

Quote from @Steve K.:

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

 Sounds like another example of RE being local. Most of my Sec 8 housing that I delt with has been in Phoenix AZ. While there are project housing apartments that are not in good areas, sec 8 tenants were able to rent anywhere and with our rapid expanding and relatively cheap housing; they were renting in regular middle of the road blue collar neighborhoods. I rented a lot of brand new houses to sec 8 tenants. My experience was that my percentage of sec 8 tenants that trashed properties was about the same as those that were not on sec 8. It sounds like most of your sec 8 rented properties were in a much worse neighborhood than your other properties. I would guess that if you had non sec 8 tenants in those same neighborhoods that you would have had the same problems with them. Thus the issue was probably more of a issue with being in a lower level neighborhood than who the renter was. 

I had some experiences where the sec 8 tenant was a single mother but her "boyfriend" lived there 11.5 months of the year. He couldn't be there the two weeks that the inspection would happen or she would no longer be low income, since he had a good job, and she would lose her free money (voucher). That kind of stuff is what really drives me the most nuts about the program, the fraud/abuse of the system. It happens on just about any large free money program. However there are also those tenants that I see are getting to raise their kids in a much safer/nicer neighborhood than if they didn't have it; and I have seen some people be able to move up in their career and their portion of rent get higher and higher, over the years, until they got off sec 8. Of course, now that I have some properties on the coast, it drives me nuts every time I see a person that just got their voucher in a larger city decide that now that they have their voucher it is time to go move to the more expensive coastal town. It's like they got their golden ticket so now it is time to go live and relax in a small vacation town. 

 You're correct, my S8 rentals were in much worse areas than the others, so it is more about the location than whether or not the tenant is S8. Now that source of income is a protected status in CO, landlords can't deny a tenant based on the applicant using a voucher so govt. subsidized renters can rent anywhere that they can find something they can afford. There are still areas that are comprised of predominantly S8 rentals however, and they tend to be Class C/D locations. I had some buildings where about half the units were S8. Everything I own now is in Class A/B areas and I haven't had any S8 tenants apply for any of those units.  

We have a various government programs in all areas in Cleveland. The best area and the worst.
” as long as I’m getting a free  house I might as well live in the best area” 

all the best 

[Bob Stevens]

Quote from @Steve K.:

Quote from @Brian Kloft:

Quote from @Steve K.:

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

 Sounds like another example of RE being local. Most of my Sec 8 housing that I delt with has been in Phoenix AZ. While there are project housing apartments that are not in good areas, sec 8 tenants were able to rent anywhere and with our rapid expanding and relatively cheap housing; they were renting in regular middle of the road blue collar neighborhoods. I rented a lot of brand new houses to sec 8 tenants. My experience was that my percentage of sec 8 tenants that trashed properties was about the same as those that were not on sec 8. It sounds like most of your sec 8 rented properties were in a much worse neighborhood than your other properties. I would guess that if you had non sec 8 tenants in those same neighborhoods that you would have had the same problems with them. Thus the issue was probably more of a issue with being in a lower level neighborhood than who the renter was. 

I had some experiences where the sec 8 tenant was a single mother but her "boyfriend" lived there 11.5 months of the year. He couldn't be there the two weeks that the inspection would happen or she would no longer be low income, since he had a good job, and she would lose her free money (voucher). That kind of stuff is what really drives me the most nuts about the program, the fraud/abuse of the system. It happens on just about any large free money program. However there are also those tenants that I see are getting to raise their kids in a much safer/nicer neighborhood than if they didn't have it; and I have seen some people be able to move up in their career and their portion of rent get higher and higher, over the years, until they got off sec 8. Of course, now that I have some properties on the coast, it drives me nuts every time I see a person that just got their voucher in a larger city decide that now that they have their voucher it is time to go move to the more expensive coastal town. It's like they got their golden ticket so now it is time to go live and relax in a small vacation town. 

 You're correct, my S8 rentals were in much worse areas than the others, so it is more about the location than whether or not the tenant is S8. Now that source of income is a protected status in CO, landlords can't deny a tenant based on the applicant using a voucher so govt. subsidized renters can rent anywhere that they can find something they can afford. There are still areas that are comprised of predominantly S8 rentals however, and they tend to be Class C/D locations. I had some buildings where about half the units were S8. Everything I own now is in Class A/B areas and I haven't had any S8 tenants apply for any of those units.  

We have a various government programs in all areas in Cleveland. The best area and the worst.
” as long as I’m getting a free  house I might as well live in the best area” 

all the best 

[Regina Blake]

Hi, yes this is all great information. I must say as an Ohio Realtor that Ohio is a great place to invest in real estate. If you have any questions, please feel free to give me a call. Thanks!

Regina Blake-Ohio Realtor

[James Wise]

Quote from @Bob Stevens:

Quote from @Steve K.:

Quote from @Brian Kloft:

Quote from @Steve K.:

I used to have S8 properties and for the most part I agree with your sentiment: it doesn't have to be as bad as the stigma around it might lead one to believe. I never had any issues waiting on paperwork or the bureaucracy side of it like I had been warned about. I actually never failed an inspection!

However I sold those properties, as when I looked at the numbers compared to my other properties in better locations, I realized I was making a lot more money on those other properties. Even though they had less pro-forma cashflow in the magic spreadsheet, they were actually more profitable overall. This is because of less vacancy/turnover, rents increased much faster, less tenant damage, less maintenance and repair costs, and most important of all MUCH higher appreciation due to being in more desirable areas that actually improved instead of staying stagnant like many S8 areas. 

Other than making less money overall, some of the other downsides of my S8 experience were the following:

1. It's a sad way to make money IME. A very high percentage of my tenants (in fact, almost all of them) were single mothers. Many of them had drug or alcohol issues. Many of them had abusive boyfriends who took advantage of them. 3 of them died in my units from drug overdoses. 1 drank herself to death. I dealt with a lot of domestic abuse situations involving children... some of my S8 tenants only had to pay $7 for their portion of rent every month, but I still felt bad taking that money from them. 

2. S8 tenants never have good credit, savings, or anything to lose if they trash your property (besides their voucher, not always enough to make them care in my experience). In my other properties with high-earning tenants, I can get a judgment and garnish their wages, threaten their pristine credit that they actually care about, go after their savings, etc. Not so with S8, I'm paying out of pocket even if the place is completely destroyed (happened to me a few times unfortunately, and not by people in the program but usually their friends or relatives). 

3. There is always a lot more people living in the property than the person in the program. First the approved tenant moves in: perfect applicant, single mom with one kid, no pets... soon her adult kids move in with their kids and then her ex moves in with his kids and their kid's kids and their pitbulls and mastiffs...  most of the problems I had were not with people actually in the program. You have less control for this reason, and the property gets way more beat up. You can screen all you want and evict all you want, but it's hard to control when they invite people in so it's unavoidable unless you live next door or something. Having that many people in the property puts a lot more wear and tear on it, even if the people give a crap (but many don't, in fact many are entitled with no respect or appreciation). I had to deal with a lot more issues than I've ever had in non-S8 rentals like extensive property damage and also bed bugs, roaches, drain lines completely clogged up by grease (I learned what sewer worms are, look it up), spray paint art on walls and food on ceilings, noise complaints, police at the property, removing dead bodies, etc.  

4. As mentioned above, S8 properties tend to be in bad locations. I reiterate this because I have made the lion's share of my money in real estate by investing in "up and coming" locations as they transition from borderline to popular parts of town. The problem with S8 buildings is they can hold an area back that would otherwise be in the "Path of Progress". If there are a lot of S8 buildings in an area, it'll never be nice. I've seen gentrification spread right up to a block of S8 buildings, and then go around that block leaving it right where it was and will probably always be (undesirable). 

Appreciation is where the real money is at IME, and S8 is an appreciation killer. Buying in areas with a lot of good jobs and desirability is the key to growing wealth from rapid appreciation. S8 renters simply don't have good jobs, or they wouldn't be on S8. People live there because they have no other options. Property values are usually flat for this reason, compared to better locations where more people actually choose to live. So S8 not longer fits my strategy personally. 

 Sounds like another example of RE being local. Most of my Sec 8 housing that I delt with has been in Phoenix AZ. While there are project housing apartments that are not in good areas, sec 8 tenants were able to rent anywhere and with our rapid expanding and relatively cheap housing; they were renting in regular middle of the road blue collar neighborhoods. I rented a lot of brand new houses to sec 8 tenants. My experience was that my percentage of sec 8 tenants that trashed properties was about the same as those that were not on sec 8. It sounds like most of your sec 8 rented properties were in a much worse neighborhood than your other properties. I would guess that if you had non sec 8 tenants in those same neighborhoods that you would have had the same problems with them. Thus the issue was probably more of a issue with being in a lower level neighborhood than who the renter was. 

I had some experiences where the sec 8 tenant was a single mother but her "boyfriend" lived there 11.5 months of the year. He couldn't be there the two weeks that the inspection would happen or she would no longer be low income, since he had a good job, and she would lose her free money (voucher). That kind of stuff is what really drives me the most nuts about the program, the fraud/abuse of the system. It happens on just about any large free money program. However there are also those tenants that I see are getting to raise their kids in a much safer/nicer neighborhood than if they didn't have it; and I have seen some people be able to move up in their career and their portion of rent get higher and higher, over the years, until they got off sec 8. Of course, now that I have some properties on the coast, it drives me nuts every time I see a person that just got their voucher in a larger city decide that now that they have their voucher it is time to go move to the more expensive coastal town. It's like they got their golden ticket so now it is time to go live and relax in a small vacation town. 

 You're correct, my S8 rentals were in much worse areas than the others, so it is more about the location than whether or not the tenant is S8. Now that source of income is a protected status in CO, landlords can't deny a tenant based on the applicant using a voucher so govt. subsidized renters can rent anywhere that they can find something they can afford. There are still areas that are comprised of predominantly S8 rentals however, and they tend to be Class C/D locations. I had some buildings where about half the units were S8. Everything I own now is in Class A/B areas and I haven't had any S8 tenants apply for any of those units.  

We have a various government programs in all areas in Cleveland. The best area and the worst.
” as long as I’m getting a free  house I might as well live in the best area” 

all the best 

 Generally speaking, Section 8 tenants are low quality people. If your housing is in the Ghetto, Section 8 tenants provide the least amount of risk as the majority of tenants willing to live in these areas are low quality. If most everyone is low quality, you want the one who's got the guaranteed rent check coming in. If your housing is in a low crime area with the majority of housing being owner occupied, Section 8 tenants provide the most amount of risk as people who can afford to live in these areas are generally much higher quality people than your typical Section 8 tenant.

[Bob Stevens]

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland. 

[Colleen F.]

@Brian Kloft I can relate to those calls from new voucher holders that want to get out of the city. we get them all the time as we are also by the beach. I always check the HUD amount because often our apartments are more than HUD S8 lists as FMV. I believe it would also be more work for me with more wear and tear because most of the tenants are not working so in a utilities included unit they use more water and we have a well.

The big one is that since S8 won't do a pre-inspection I am never sure if the age of the building will cause issues. Not a slumlord but it is a historic building and we don't have overhead lights so that is a definite fail. I also think we might have a couple more building age relate issues but the paying tenants like it just fine and stay multiple years so I often wind up sending S8 tenants away especially when they want to make an hour drive because they have a city voucher. 

[Jill F.]

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

[Bob Stevens]

Quote from @Jill F.:

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

 1srt off no need to speak with me in this manner. Of course you do not take sec 8 in the best areas, I never said that. I would never put sec 8 in Chagrin Falls.  I said in CLEVELAND and burbs they are paying more which is true. Slumlord, hmm I don't think so. GH, MH, CH, EULCID is hardly the slum. You are not getting more rent with a cash tenant in those areas no matter how nice you make them. We just got 1450 for 3/1 in GH, not getting any more with a cash tenant, but what do I know I have only done about 80 in N Collinwood, and 500 overall in all the burbs. BTW N Collinwood you will get 1200-1300 for a 3/1 not sure where you are getting 1k from. I could have granite, SS appliances, tile baths and floors, etc, you are not getting more with cash.  I just got 950 for a 2br top floor duplex. 800 for a 1 br in EAST Clev.  Bottom feed, I will take my 20% net caps all day.  wow such an attitude for no reason. 

Good luck 

[Jay Hinrichs]

Quote from @Bob Stevens:

Quote from @Jill F.:

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

 1srt off no need to speak with me in this manner. Of course you do not take sec 8 in the best areas, I never said that. I would never put sec 8 in Chagrin Falls.  I said in CLEVELAND and burbs they are paying more which is true. Slumlord, hmm I don't think so. GH, MH, CH, EULCID is hardly the slum. You are not getting more rent with a cash tenant in those areas no matter how nice you make them. We just got 1450 for 3/1 in GH, not getting any more with a cash tenant, but what do I know I have only done about 80 in N Collinwood, and 500 overall in all the burbs. BTW N Collinwood you will get 1200-1300 for a 3/1 not sure where you are getting 1k from. I could have granite, SS appliances, tile baths and floors, etc, you are not getting more with cash.  I just got 950 for a 2br top floor duplex. 800 for a 1 br in EAST Clev.  Bottom feed, I will take my 20% net caps all day.  wow such an attitude for no reason. 

Good luck 

lets keep in mind we all have Bias  and Bob's bias is Section 8 Cleveland as that is how he makes his living owning and selling these types of assets in multiple markets..

Jill on the other hand is an owner operator in Akron with a ton of first hand experience self managing these assets in basically the same market  Akron and E cleveland are only what 15 20 minute drive from each other.  

There is no sugar coating  section 8,  its a specialty niche and one Earns every penny they make in that niche. And from what I have seen from owning over 200 section 8 doors personally from Detroit to Jackson MS.. is the Juice simply was not worth the squeeze.. so we own Zero today. And most of the clients I do fix and flip funding for in the same markets wont deal with these assets either been there done that and they like market rent and market tenants.. Its a choice one makes once they have owned both types of assets for any number of years..

[James Wise]

Quote from @Bob Stevens:

Quote from @Jill F.:

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

 1srt off no need to speak with me in this manner. Of course you do not take sec 8 in the best areas, I never said that. I would never put sec 8 in Chagrin Falls.  I said in CLEVELAND and burbs they are paying more which is true. Slumlord, hmm I don't think so. GH, MH, CH, EULCID is hardly the slum. You are not getting more rent with a cash tenant in those areas no matter how nice you make them. We just got 1450 for 3/1 in GH, not getting any more with a cash tenant, but what do I know I have only done about 80 in N Collinwood, and 500 overall in all the burbs. BTW N Collinwood you will get 1200-1300 for a 3/1 not sure where you are getting 1k from. I could have granite, SS appliances, tile baths and floors, etc, you are not getting more with cash.  I just got 950 for a 2br top floor duplex. 800 for a 1 br in EAST Clev.  Bottom feed, I will take my 20% net caps all day.  wow such an attitude for no reason. 

Good luck 

 Hot damn.....Shots fired lol.

[Bob Stevens]

Quote from @James Wise:

Quote from @Bob Stevens:

Quote from @Jill F.:

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40thl-OV percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

 1srt off no need to speak with me in this manner. Of course you do not take sec 8 in the best areas, I never said that. I would never put sec 8 in Chagrin Falls.  I said in CLEVELAND and burbs they are paying more which is true. Slumlord, hmm I don't think so. GH, MH, CH, EULCID is hardly the slum. You are not getting more rent with a cash tenant in those areas no matter how nice you make them. We just got 1450 for 3/1 in GH, not getting any more with a cash tenant, but what do I know I have only done about 80 in N Collinwood, and 500 overall in all the burbs. BTW N Collinwood you will get 1200-1300 for a 3/1 not sure where you are getting 1k from. I could have granite, SS appliances, tile baths and floors, etc, you are not getting more with cash.  I just got 950 for a 2br top floor duplex. 800 for a 1 br in EAST Clev.  Bottom feed, I will take my 20% net caps all day.  wow such an attitude for no reason. 

Good luck 

 Hot damn.....Shots fired lol.

 LOL your DA BEST!! , So uncalled for from this person, NO CLUE who she is. But totally misread my post.

[Bob Stevens]

Quote from @Jay Hinrichs:

Quote from @Bob Stevens:

Quote from @Jill F.:

Quote from @Bob Stevens:

Quote from @Jill F.:
Hud "fair market rent" determinations of "reasonable" rent are based on the 40th percentile of rents for a "moderate" apartment in a given small market rent (zip code) area. I don't compete on price. My apartments are nicer than the median or average apartments in the markets where I compete, and as a result easily command more rent than section 8 will pay. I am generally above the 75th percentile of rents in my markets so my apartments always fail the HUD "reasonableness" requirement. The section 8 business model just doesn't work with my business model. They want to pay me $670 in a neighborhood where I have a line of people willing to pay me $825 and in another area $1050 where I get $1295. No thanks.

 Sex 8 ALWAYS pays more, much more then cash tenants in Cleveland and the burbs. I just got 975 for a 2 br in N Collinwood, MAX cash 750. 850 FOR 1 BR in East Cleveland vs maybe 600. 1400. Not sure how you fail, reno is the same way for cash. I have done more than a thousand, move in and outs and countless reno/repairs in  Cleveland.

You are wrong. How many Section 8 tenants do you think are in the Redwood apartments? (Hint: 0, because they charge too much. Section 8 will deem their asking rent "unreasonable")

I'll explain it again (speaking s-l-o-w-ly): Section 8 uses the HUD guidelines for fair market rent which are based on the 40th percentile of a moderately priced apartment in a given zip code. Section 8 published rents include all utilities and are adjusted down for utilities not paid by the landlord. Section 8 pays more to SLUMLORDS renting less than the average apartments. https://www.huduser.gov/portal/datasets/fmr.html

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2024_code...

The small area FMR for N Collinwood (44119) is $1000 gross (all utilities included)

Landlords (like me and redwood) with nice rental properties, will not take section 8 because they do not pay enough rent. BTW: The 75th percentile rent for market rate apartments with only w/s/t included even in N Collinwood is $1064. If you had nice places you'd be able to get more rent- Have a nice bottom feed.

 1srt off no need to speak with me in this manner. Of course you do not take sec 8 in the best areas, I never said that. I would never put sec 8 in Chagrin Falls.  I said in CLEVELAND and burbs they are paying more which is true. Slumlord, hmm I don't think so. GH, MH, CH, EULCID is hardly the slum. You are not getting more rent with a cash tenant in those areas no matter how nice you make them. We just got 1450 for 3/1 in GH, not getting any more with a cash tenant, but what do I know I have only done about 80 in N Collinwood, and 500 overall in all the burbs. BTW N Collinwood you will get 1200-1300 for a 3/1 not sure where you are getting 1k from. I could have granite, SS appliances, tile baths and floors, etc, you are not getting more with cash.  I just got 950 for a 2br top floor duplex. 800 for a 1 br in EAST Clev.  Bottom feed, I will take my 20% net caps all day.  wow such an attitude for no reason. 

Good luck 

lets keep in mind we all have Bias  and Bob's bias is Section 8 Cleveland as that is how he makes his living owning and selling these types of assets in multiple markets..

Jill on the other hand is an owner operator in Akron with a ton of first hand experience self managing these assets in basically the same market  Akron and E cleveland are only what 15 20 minute drive from each other.  

There is no sugar coating  section 8,  its a specialty niche and one Earns every penny they make in that niche. And from what I have seen from owning over 200 section 8 doors personally from Detroit to Jackson MS.. is the Juice simply was not worth the squeeze.. so we own Zero today. And most of the clients I do fix and flip funding for in the same markets wont deal with these assets either been there done that and they like market rent and market tenants.. Its a choice one makes once they have owned both types of assets for any number of years..

 Agreed, however there was no reason to "attack " me. I simply stated sec 8 pays more than cash in Cleveland and the burbs which is true. Not sure why she went on a tyrant. No biggy I have moved on.. 

[Michael Smythe]

Agree that S8 often pays more rent than cash for Class D and some Class C areas. Definitely NOT Class A and rarely Class B.

We struggle with newbie investors that buy a Class B rental and fix it up real nice - but they've listened to some fake guru online about S8 and want us to put them in their nicely fixed up property. We'd prefer getting them a cash tenant who will take better care of the property!

OPINION: S8 program should only give voucher holders 6 years max on the program and require them to attend college or trade school to improve their income. Should also require financial literacy programs, so they learn how to budget, save and fix their credit.

I don't like my tax dollars supporting "free loaders" for decades.