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I knew having a tenant was a mistake... Anyone ever rented to section 8 tenants?

Discussion in 'Chit-Chat' started by PolterGeist, Aug 16, 2005.

  1. PolterGeist

    PolterGeist

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    my parts run has been postponed.

    Seems the friend of my wife's who was in town for 6 weeks for a job and needed a place to stay... bounced her rent check. :mad:

    It'd be one thing if I was made of money, but I'm not. I'm shelling out $30,000 a year to UW Medical School, on top of day-to-day expenses...

    So I was counting on that check for my travel money....

    Oh well...

    We've contacted the girl and she's embarrased and ashamed, but so far has not yet coughed up the dough...

    This makes me think twice about renting our house in Illinois out and using that money to get a place in Madison... Imagine if I had to pay rent of my own or a mortgage with that rent money?

    A friend of mine is a professional landlord. He owns about 40 properties in town--everything from tiny little places in working class neighborhoods to fancy places in ritzy neighborhoods.

    He says lots of the time he rents them out section 8. He says it's great cause:

    1) The gov't pays top dollar
    2) The gov't checks NEVER bounce
    3) They always pay on time
    4) The tenants take very good care of the home, since there is a months and even years long waiting list for Section 8, and if they trash the place they lose it.

    Anyone ever rented Section 8 Before? Any horror stories?

    We're sick of commuting. However, our house in Illinois is paid for, and even if we sold it at full market value, we would not be able to get anything at all (let alone anything comparable) in Madison without getting into debt. Madison's real estate prices are pretty high right now...

    SO I was more in favor of renting the place in IL that is paid for free and clear and renting a place in Madison....

    Thanks for any input,


    Steve
     
  2. PHBeerman

    PHBeerman

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    When my wife and I were first married we managed some apartments which about a half were slated for HUD financed low-income housing. My advice, don't do it. Unless you want your house trashed.
     
  3. PolterGeist

    PolterGeist

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    Yeah, I know. :) I really don't want to do it at all to be honest....

    You never can tell... My parents had a gorgeous house in a great neighborhood that they rented to a Doctor. They had trouble collecting rent on a few occasions and the house (the apple of my mom's eye) got trashed. My mom damn near had a mental collapse when she saw what they had done to the place.

    Conversely, they once rented to a woman who subsequently lost her job, her kid got cancer, and all sorts of bad stuff befell them. They always managed to pay the rent on time, and when they did move out, the house was meticulously cared for.

    My parents had more bad luck renting than good, and eventually sold all the houses they had accumulated over the years and got out of the landlord business alltogether.

    I don't know what to do-- for every horror story, there's a good one -- you know?

    Steve
     
  4. LongIsland60

    LongIsland60

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    I have managed rental properties for about 9 years. You get scumbags in every income and racial group. I have had good experiences with section 8, though I hear many horror stories. When people get handouts and are not held accontable there can be an effect of not caring about or understanding responsibility of property. The most important thing to do is screen all your tenants. Visit their current residences to see how they live, if you can. Call job references and at least 2 prior landlords. the current ones might say anything to make their bad tenants YOUR problem.

    RE: your friend's list of pros - 1, 2, and 3 are right on. I will disagree with 4. It may be true, may be not. Yes, there is a waiting list, but I don't agree with that statement about not trashing the place. It all depends on the tenant.

    Learn all you can about your local landlord/tenant law. Do everything to protect yuorself. Get advice from your friend - buy him a dinner and/or whatever it takes to make him know you want his help and advice.

    There will always be problems - that is the nature of the business, however you can reduce your risk and also make money. Address problems quickly when they are small. Do not try to be nice. It is all business. Sometimes it is better to pay people to leave than to get into a pissing contest. You WILL have your oen horror stories, but the benefits (hopefully) will outweigh the negatives.

    The bottom line - section 8 is fine, and can be desirable - just know the tenant(s) and reduce your risk. Managing rentals is not for everyone. Owning property is a great way to gain wealth and protect against inflation.

    You can perhaps offer your friend money to manage (or help you manage) for some time. 10% is the market rate here for rental management. Good luck.
     
  5. PHBeerman

    PHBeerman

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    Good people are good people no matter what their economic status is. When I used to paint and hang wallpaper, the person that I worked for only had 1 client in those 3 years that he had to threaten with a lien in order to get paid. That client also owns every McDonalds within 100 miles of Boise Idaho. Dude was a real gem.

    Apartment renters are a different beast than house renters. In apartments you get low-lifes. Houses usually attract a better renter. However, with interest rates as low as they are, you have to wonder about anybody who does not own a home.
     
  6. zetasig

    zetasig

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    Agreeed below #4 is the wild card.

    1) The gov't pays top dollar
    2) The gov't checks NEVER bounce
    3) They always pay on time
    4) The tenants take very good care of the home, since there is a months and even years long waiting list for Section 8, and if they trash the place they lose it.


    You need to make the choice of what you are doing with your properties. if you are emotionally attached to them, dont rent them out I would have reservations renting my parents place out even if its a hole.
    If you buy the place to rent it and make a little money, then having the place trashed is part of the risk you run. 4x8 sheets of drywall are $7.50 at lowes. . Thats what a security deposit is for. Periodically check in on the place. I always mow the lawn and take care of the snow. It gives me reason to stop by at lease weekly, and make sure my property is okay. Also relieves me of some of the liabilty of slip and falls on ice..... If something is f'ed up address it then and there, not at the end of the lease.

    My dad had several 8's Always agreed with rules 1-4. Never got emotionally attached.
     
  7. LongIsland60

    LongIsland60

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    Agreed on the good people comment - that's what I was trying to say. Definitely renters are in a worse economic situation (in general) than owners - they are on the whole less financially responsible than homeowners. (this is a generalization - before people start jumping all over me) Many of the people who rent from me have "nicer" cars and until a couple years ago had far more toys and "stuff" than I did. As a landlord, these are your customers. Offer a good product and make sure you market and service only the "best" customers. I have not met the "perfect" tenant yet - at least not one who has rented from me. The criteria are - in no particular order:

    - 2 months security
    - pay rent on time and in full
    - maintain/keep property nice
    - be respectful of the landlord
    - be respectful of the neighbors
    - communicate - inform landlord of issues immediately

    I may have missed a couple - but if you can find all these you are set. I have never gotten all in one tenant - many times it is a tradeoff. Lately though, I am getting better and just wait (while the house/apartment is vacant) and hold out as long as I can for the "best" tenant I can find. As Mr. Beer points out - the most desirable people to have as tenants are most likely homeowners themselves and not looking to rent.