This question tends to pop up time and time again, and my answer is always a simple one. If you feel the tenant meets ALL your property investment requirements, then whether they are DSS or not, it should not matter.
The first thing you will want to do, before even considering a DSS tenant is to contact your mortgage lender and make sure that they accept DSS tenants under the terms of your mortgage. Mortgage companies can be funny with situations like this, and you may find they won’t take a single mother on full benefits, but they will take a couple with a foster child.
Once you have got that out of the way, you will need to meet the intended party. You will need to get 3 references off them, and to be on the safe side a credit reference also.
Also, bare in mind that not all single mothers with 4 kids are going to leave the property in a mess, but the more people/children/pets that are living in the property, then the more likely it is that damage may occur. You may want to simply increase your deposit to take this into account.
On the plus side, the main benefit of having a DSS tenant is they are likely to live in your property for a long time. They have probably waited on council lists for years, and heard nothing back, so they will hopefully look after your property and treat it more like a home.
One more final piece of advice, if you do get a DSS tenant, be sure your rent covers your mortgage, plus a bit extra. Stick that ‘bit extra’ into a savings account and forget about it.
This way if you ever do find that you are without a tenant, you have a bit extra cash to tide you over until you get it rented again!