by The Dharma Bum » Thu Aug 15, 2013 9:41 pm
Yeah, well, bad tenants are part of the game. That can happen to any property.
A HUD home is a FHA foreclosure. They try to sell them to owner/occupants but if no one buys them after 30 days they sell them to investors. It sounds like an investor bought the home and rehabbed it and then rented it out, possibly through the section 8 program. I help clients do this quite often. I am a registered HUD dealer and have sold quite a few of these properties.
All section 8 is really is a voucher that pays the rent. If any landlord wants to accept a section 8 applicant they can fill out the form and submit to the inspection and then the applicant can move in. So the recipients can rent any property that will accept a section 8 voucher. Although some properties cater to the section 8 market specifically it's pretty common to negotiate a deal for a non section 8 property to accept a voucher.
There's a big shortage of them here. It may be different in Chicago. It sounds like there's quite a bit different of a market, being a lot of high rises instead of single family residences. However the federal housing regulations surround section 8 will be the same. They aren't lax at all about enforcing those inspections. I list over 150 properties that my property management company handles and a couple of dozen or so are regular section 8 properties so I do deal them on a semi regular basis in my day to day operations. My firm mainly deals with investors so I work with these properties regularly.
I think it's a pretty good program and there is a tendency to lump all the recipients in with a few bad apples. I haven't really had much trouble with section 8 rentals. Not substantially different than any others really.
I think it's a good program and recommend section 8 properties for any portfolio. It's a guaranteed rent check every month. And since I run a background check I'm able to filter out many of the bad apples. Competent property management really does help maintain a property's value. It's pretty essential.