I have some rental properties, and the government would like to turn a couple into low-income housing. Is this a good idea, or should I find my own tenant?
In these types of situations, you’re generally talking about Section 8 housing. This means government-subsidized rent, and the person living there is in a lower-income bracket. I put a few of my properties on Section 8 years ago, when I first started out in the real estate business. I can tell you from personal experience, it’s a good news-bad news scenario.
If you own a property in a lower-income neighborhood, and you put it into the Section 8 subsidized housing program, the good news is that you’ll always get paid. This is because the federal government sends you your money. Unfortunately, the good news pretty well ends right there.
The bad news is that some Section 8 folks have a real entitlement mentality and can be unreasonable to deal with on some issues. It’s also really hard to get them out of the property once they’ve taken up residence. Of course, not all people who participate in this program are like this. But you’ll run across your share of rough folks, irrespective of their race or the area of the country. More than anything, it’s the impact of the economic situations surrounding their lives.
Another piece of bad news is that the government puts lots of stringent conditions on the property. That wasn’t so difficult for me, because I always kept my places in really good shape. But if you go this route, I promise you’ll come across all kinds of guidelines and regulations, some of which are silly and not very realistic.
I got tired of the Section 8 experience pretty quickly, and I don’t own any property in that program today. If it were me, I’d just go find my own tenants. I know some things have probably changed since my time in the program. But if it’s like most things that are government managed, the change hasn’t been for the better!