Landlording & Rental Properties

Rent to Section 8 or No?

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This question comes up a lot – and a year or less ago if you had asked me if I wanted Section 8 tenants I would have adamantly said “no way”. Since then, however, I’ve learned a lot more about the pros and cons to Section 8 and now I am much more willing to consider it. Plus, I’ve realized there are some times when it may even be the better way to go.

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The Bigger Picture of Section 8

Most everyone seems to be familiar with the basics of Section 8 tenants. In case you aren’t though, the gist of it is the government offers financial help for low-income individuals or families so they can secure housing for themselves. The government pays a set share of their rent each month and the tenant is responsible for the rest. The government tends to offer a nice pretty penny, if I do say so! At least from what I have seen as far as how much they pay versus the tenants. Anyway…

The general idea with Section 8 tenants is that they are, in fact, low-income and that increases the risk for the quality of their tenancy. It is assumed Section 8 tenants will cause more damage to the property and not take care of it. The reality is this won’t always be the case, and there are a lot of Section 8 tenants who will take immaculate care of a property. However, it is realistic to assume the risk to be higher of getting less-than-stellar tenants than if you were renting in a nicer part of town to higher income individuals. So there is my disclaimer to everything else I say- not all Section 8 tenants are or will be bad quality. Not at all! There is just a higher risk of it happening.

So rent to Section 8 or no? I’m going to list out a few pros and cons that you may or may not be aware of, and from there, you decide! It’s totally up to you as an owner and you shouldn’t do anything you aren’t comfortable with. I do want to make sure you have some education on the topic so you can make a well-informed decision though. And of course none of the pros or cons are guaranteed, they are just potential factors to consider.

The Pros of Section 8

  • Guaranteed rent. Any investor who has had a hard time collecting money from tenants should love this one. Guess what, the tenant isn’t paying you every month, the government is! So you are going to get your check in the mail, on time, each month. To some that may not seem like a big deal but me being one of those investors who has had tenants who haven’t paid, I can certainly appreciate not having to worry about when or if I’m going to get a check!
  • Less vacancies. This one isn’t guaranteed, but it is common for Section 8 tenants to stay in one place for longer than usual tenants. Mostly because they government is paying a big majority of their way, so why move? They won’t be buying a house anytime soon, so it is likely they are considering the property they are in their home and may stay there for quite a good a while. I have heard an opposing argument to this though, which is there can be increased vacancies because Section 8 tenants will often hop around to new houses that are enrolled in the program, again because the government is paying most of their way. So if a new house pops up they like better, they move into it. I’m not sure on that one, but from my experience I’ve seen more of the ‘less vacancies’ case than not.
  • May get you higher rents. I wouldn’t have known this one had it not been for one of my properties in Atlanta. I bought an adorable house in what seemed to be a good area, and it had a rental guarantee for 12 months so I was guaranteed to get the $1025 in rent each month that was advertised at the time I bought it. Turns out the house isn’t in that great of an area and after the tenants walked out with all the appliances and it was sitting vacant, I was told there would be no way it could rent for $1025 (don’t even get me started on venting off about that property management company!). In fact, they said it may be lucky to bring in about $700. I immediately decided if I were to ever go with Section 8 tenants, now was the time. I was stuck with a property in a not-so-hot area anyway, so if I’m going to have lower-end tenants I might as well have them be Section 8 which would probably get me more in rent each month and it would secure that ‘guaranteed’ side of getting paid each month whereas with non-Section 8 low-income tenants, my chances would be sky high of not getting paid.

The Cons of Section 8

I don’t need bullets for this one as there is really only one major con I know of, which is whether or not the tenants will take care of your property. Being left with astronomical repairs expenses after a tenant moves out can kill an investment. Again, not all Section 8 tenants will destroy your house, but it should be assumed to be a higher likelihood than not. At least that way if you plan for it and then you end up with a spanky clean property when they move out, then that’s just a bonus, right?

One way to look at these repairs costs is that if those tenants live in the house for an extended period of time before they ever move out, because they were getting the government help, then all of the money you saved on vacancy expenses can just go towards repair costs when they do move out. So higher-income tenants- lower repairs expenses but higher vacancies. Lower-income Section 8 tenants- higher repairs expenses but significantly less vacancy expenses. Those are total generalizations, but at least they give you an idea of how it may work out. Also, don’t forget that your insurance policy on the property may cover tenant damage, so if it’s really that bad you would get covered after your deductible anyway. I know my insurance policy covers tenant damage.

The only other potential con I have heard for Section 8 is really more location-based. Where is this property you are considering Section 8 for and how will that location affect a potential future resale? I guess the issue really there is more for a debate on whether or not to buy in low-income areas more than it is about Section 8, but I can see where those two would go hand-in-hand so worth thinking about.

Anyone have any input on Section 8 experience, either for or against it?

Photo Credit: stevendepolo via Compfight cc

Ali Boone is a lifestyle entrepreneur, business consultant, and real estate investor. Ali left her corporate job as an Aerospace Engineer to follow her passion for being her own boss and creating true lifestyle design. She did this through real estate investing, using primarily creative financing to purchase five properties in her first 18 months of investing. Ali’s real estate portfolio started with pre-construction investments in Nicaragua and then moved towards turnkey rental properties in various markets throughout the U.S. With this success, she went on to create her company Hipster Investments, which focuses on turnkey rental properties and offers hands-on support for new investors and those going through the investing process. She’s written nearly 200 articles for BiggerPockets and has been featured in Fox Business, The Motley Fool, and Personal Real Estate Investor Magazine. She still owns her first turnkey rental properties and is a co-owner and the landlord of property local to her in Venice Beach.

    Nancy
    Replied about 6 years ago
    I contemplated renting to Section 8 tenants, but was concerned about doing so for the very reasons you mentioned. I would have loved to have read your article back in June when I was advertising the rental, as this would have offered insight on renting to Section 8 recipients. After 100 calls and an open house, I wound up renting to the brother and his fiancé, of the tenant that was moving out – nice, easy transition since I had already met them briefly, several times when they came to visit the brother. I still did a credit and background check, as well as contacting their previous landlord just to be sure. If and when they move out, (I tend to get tenants that stay longer than a year) I will keep the informative information you wrote about in mind. Thanks!
    Ali Boone
    Replied about 6 years ago
    You bet Nancy! Glad you found good tenants for your property. Doesn’t get better than that!
    Ali Boone
    Replied about 6 years ago
    You bet Nancy! Glad you found good tenants for your property. Doesn’t get better than that!
    Ali Boone
    Replied about 6 years ago
    You bet Nancy! Glad you found good tenants for your property. Doesn’t get better than that! Reply Report comment
    La Nae Duchesneau
    Replied about 6 years ago
    Hi Ali, two comments really. Number one is that section 8 tenants will keep their house clean. I tell my tenant for instance “Hey you’ve got to pick up that garbage in the yard or cut your lawn”. If they don’t do it you can report them to section 8. If they don’t comply, they can lose their housing assistance. And believe me, they don’t want that to happen. Also section 8 goes out once a year to inspect their home to make sure it is up to code so things cannot fall into disrepair. The only other thing is it is hard to rent a one bedroom, the applicants who use section 8 usually like 2 bedroom or 3 bedrooms. They tend to have families.
    Michael J Shabazz Rental Property Investor from Atlanta, GA
    Replied over 3 years ago
    Hi La Nae. A Section 8 representative for the city of Atlanta {Fulton Co.) frequents the GA REIA meetings, and to our surprise said that one bedroom housing is in very high demand. She said that the one bedroom apartments are needed for seniors, and the demand is so high that they send her out to encourage investors to purchase those units. I know your article was written in 2013, I wonder if the market has really changed that much.
    Ali Boone
    Replied about 6 years ago
    Great comments La Nae. New information for me on both of them. Just from all the comments here I’ve learned that the program is picky and will throw people out of it. Have you experienced much damage from tenants, outside of just normal cleanliness? And great note about the 1 bedroom thing.
    La Nae Duchesneau
    Replied about 6 years ago
    I don’t have any more damage from section 8 tenants as from regular tenants. I just recently decided I will post first on the section 8 website and go with them whenever possible (like I said 1 bedrooms are a hard sell to them). I like the fact that the government pays their rent and usually they are long term tenants. No leaving in the middle of the night or breaking the leases here. And as for your other question, I have had the bad tenants. It is part of this business and you have got to take the good with the bad. However, I make money doing it. I now do this full time and I wouldn’t trade it for anything. The best thing about this business is it allows you freedom. Time is a priceless commodity and it is mine to spend how I like.
    Ali Boone
    Replied about 6 years ago
    I love it La Nae!
    La Nae Duchesneau
    Replied about 6 years ago
    By the way, secion 8 in Florida just started a website where you can list your properties for free to the section 8 segment.
    Ali Boone
    Replied about 6 years ago
    Oh score.
    Nancy
    Replied about 6 years ago
    Good point. Connecticut has that as well.
    Ali Boone
    Replied about 6 years ago
    I’m guessing most states have it now? Seems logical enough.
    Ali Boone
    Replied about 6 years ago
    I’m guessing most states have it now? Seems logical enough.
    Liam
    Replied about 6 years ago
    I’ve done a lot of research about Section 8 tenants and have decided it’s actually a good idea. I’m in Pennsylvania, and the Section 8 rules for residential properties (up to 4 units), seem to vary slightly by county. Regardless, the Section 8 tenants have to use my lease and if they break the lease for any reason, there is a relatively simple form I fill out, which explains how the lease was broken and any steps the tenants can take to rectify the situation. If the situation is not addressed, the tenants lose their Section 8 status but are allowed to reapply for Section 8 housing. Locally, there is fierce competition to get Section 8 status (at last check, there were approx 400 applicants for the next available opening), so the tenants generally try to keep their Section 8 status. For size comparisons, my county has approximately 154,000 people living here, but there is a large University. The students put pressure on the housing stock for 9-12 months each year. In my experience, the general rules of real estate still apply: keep your asset in good condition, be respectful and firm to all tenants, and you’ll be OK.
    Ali Boone
    Replied about 6 years ago
    Great put Liam! Thanks. And man, nice place to own property sounds like 🙂
    Mark Owens
    Replied about 6 years ago
    From my experience I would love to have 100% occupancy with Section 8 tenants. There are some challenges but they are mostly with the Section 8 employees- not the tenants! In my area, Baltimore MD, the cash flow is in the lower income areas. With Sec 8 the tenants have to not only abide by my rules, but also the Program rules. Most of them don’t want to put their voucher in jeopardy, so they stick with the program. Myself, and many of my friends actually don’t require a deposit from our Sec 8 tenants because there is so much competition for them. At this time, 67% of my tenants are on Sec 8 or a similar program and of those I have had very few issues in the past with collecting their rent portion. With market tenants- Ugh. I like waking up on the 1st of the month and my Sec 8 rent is in the bank before I even get out of bed. That makes dealing with the Sec 8 employees a little more tolerable. In addition, as far as damage to the property goes, my experience tells me that my Sec 8 tenants take better care of the property. (this is just my experience- and my friends) Reply Report comment
    Mark Owens
    Replied about 6 years ago
    From my experience I would love to have 100% occupancy with Section 8 tenants. There are some challenges but they are mostly with the Section 8 employees- not the tenants! In my area, Baltimore MD, the cash flow is in the lower income areas. With Sec 8 the tenants have to not only abide by my rules, but also the Program rules. Most of them don’t want to put their voucher in jeopardy, so they stick with the program. Myself, and many of my friends actually don’t require a deposit from our Sec 8 tenants because there is so much competition for them. At this time, 67% of my tenants are on Sec 8 or a similar program and of those I have had very few issues in the past with collecting their rent portion. With market tenants- Ugh. I like waking up on the 1st of the month and my Sec 8 rent is in the bank before I even get out of bed. That makes dealing with the Sec 8 employees a little more tolerable. In addition, as far as damage to the property goes, my experience tells me that my Sec 8 tenants take better care of the property. (this is just my experience- and my friends)
    Ali Boone
    Replied about 6 years ago
    Interesting Mark. Geez. with all these comments I’m almost even more sold on Section 8 than when I read the article! Very informative, thank you.
    Frank Rizzo
    Replied about 6 years ago
    Here is where you really have to have an understanding of the local regulations. We are located in NYC and I have had other landlords tell me that they do not rent to Section 8. THAT IS A BIG NO-NO. It is considered to be discriminatory against source of income. I have found that some landlords are not familiar with that source of income has become a protected class. Be sure to have knowledge of the law in your area to keep yourself out of harms way.
    Ali Boone
    Replied about 6 years ago
    Oh good put Frank. Definitely not something I had considered, the room for “discrimination”, so great for all to know before anyone gets in trouble for voicing preferences to tenants.
    Frank Rizzo
    Replied about 6 years ago
    Here is where you really have to have an understanding of the local regulations. We are located in NYC and I have had other landlords tell me that they do not rent to Section 8. THAT IS A BIG NO-NO. It is considered to be discriminatory against source of income. I have found that some landlords are not familiar with that source of income has become a protected class. Be sure to have knowledge of the law in your area to keep yourself out of harms way.
    Kyle Hipp
    Replied about 6 years ago
    I think the cleanliness of the property would be about the same risk as any other tenant. I believe one trait that would be missing is understanding how to take care of a property. You must be very clear with expectations as on who is to change furnace filters or where to park or what clean is. Some folks in this catagory simply juat don’t know these things. I have not and do not plan on accepting section 8 tenants. My main reason is 2 fold. Having to deal with the regulations of the program. I keep my properties to high standards and there is a method to my madness but I do not want to have my business options dicated for me. The bigger side of this is that the program is something that can fall victim to political games. With the atmosphere that is currently going around, I see more section 8 programs being cut as is already happening. Even if it is a temporary delay in payment it still hurts and you do not habe many options when participating in the program. I also fear a tenant getting dropped in an event like this and then not being able to get them out because they onow they have absolutely no where else to go. I get I would rather work with someone who has more to lose but that is jist my 2 cents.
    Ali Boone
    Replied about 6 years ago
    Good perspectives Kyle. Definitely considerations worth having! Those are probably less obvious ones that should be considered, so thanks for mentioning them.
    Ali Boone
    Replied about 6 years ago
    Good perspectives Kyle. Definitely considerations worth having! Those are probably less obvious ones that should be considered, so thanks for mentioning them.
    Kyle Hipp
    Replied about 6 years ago
    I think the cleanliness of the property would be about the same risk as any other tenant. I believe one trait that would be missing is understanding how to take care of a property. You must be very clear with expectations as on who is to change furnace filters or where to park or what clean is. Some folks in this catagory simply juat don’t know these things. I have not and do not plan on accepting section 8 tenants. My main reason is 2 fold. Having to deal with the regulations of the program. I keep my properties to high standards and there is a method to my madness but I do not want to have my business options dicated for me. The bigger side of this is that the program is something that can fall victim to political games. With the atmosphere that is currently going around, I see more section 8 programs being cut as is already happening. Even if it is a temporary delay in payment it still hurts and you do not habe many options when participating in the program. I also fear a tenant getting dropped in an event like this and then not being able to get them out because they onow they have absolutely no where else to go. I get I would rather work with someone who has more to lose but that is jist my 2 cents. Reply Report comment
    Kyle Hipp
    Replied about 6 years ago
    I think the cleanliness of the property would be about the same risk as any other tenant. I believe one trait that would be missing is understanding how to take care of a property. You must be very clear with expectations as on who is to change furnace filters or where to park or what clean is. Some folks in this catagory simply juat don’t know these things. I have not and do not plan on accepting section 8 tenants. My main reason is 2 fold. Having to deal with the regulations of the program. I keep my properties to high standards and there is a method to my madness but I do not want to have my business options dicated for me. The bigger side of this is that the program is something that can fall victim to political games. With the atmosphere that is currently going around, I see more section 8 programs being cut as is already happening. Even if it is a temporary delay in payment it still hurts and you do not habe many options when participating in the program. I also fear a tenant getting dropped in an event like this and then not being able to get them out because they onow they have absolutely no where else to go. I get I would rather work with someone who has more to lose but that is jist my 2 cents.
    Kimberly
    Replied about 6 years ago
    It totally depends on what county you are in and their rules. Section 8 may dictate a rent that is less than what you could get for it otherwise. They may say a room that people have used as a bedroom is not a bedroom and not count it towards how much rent you get. Depending on how large the county is, you may get different inspectors every year who make you fix new things. Make sure you know and agree with what you are signing up for.
    Ali Boone
    Replied about 6 years ago
    Thanks Kimberly. How intensive are those inspections?
    Dumitru Anton
    Replied about 5 years ago
    Hello again Fly Lady. The most intensive are in case of children under 6 years old: (even more if you get a “by-the-book” inspector) -no paint chipping (outside walls, windows, doors, security doors or fence, exterior sheds or exterior garage; interior windows, walls, doors; now the catcher: interior of vanities/kitchen cabinets), even at more than 6 feet tall: (danger of choke/ingestion/lead ingestion!!!) -no exposed wires anywhere, (electrocution hazard) -no cracks/voids around power outlets (electrocution hazard) -no mold/leaks damages/fire damage/foul smells…. -no missing / damaged rails when you have stairs (fall hazard) -any brickrail (around the front/back stairs) on the built before 1937 houses has to be at least 26″ tall (fall hazard): you either add brick layers or attach an ironwork rail to isolate/heighten the area -access to the property (no dogs trying to chew you) + an adult (over 18 years old) during inspection – you (the landlord) or your trusty contractor/property manager (formerly dealt with Section 8 before for many years preferably)! (it could save you time against what you read on the violations report and what inspector wanted corrected: ask me how I know…) -no damages to wooden steps/wooden structures/back porch structures -fire smoke/CO detectors working and in their place -no missing/non-working light bulbs hope this helps :-))
    Dumitru Anton
    Replied about 5 years ago
    Just saw I come back 1 year late to the party. Sorry for any inconvenience. Still hope the info I posted helps.
    Joel
    Replied about 6 years ago
    Section 8 and what it pays for vouchers and how the local division operates is key. I disagree about getting kicked out of section 8 etc. Some case workers have huge case loads and could care less if you report things. They will be slow to sanction or take away the tenants section 8 but will be all over you on a ticky tack inspection item. The tenants I have found some will not take care of the space because they are not paying for it. Certain areas the voucher might be more or less for the area than market rent. So you might actually come out ahead not renting to section 8. You will hear various to rent or not for section 8. What I would say is talk to operators in the EXACT area your property is located to see how that local section 8 office operates and the issues involved. Then you can decide if it’s worth your time or not. Someone might have the best section 8 office and rent payout voucher in the world but if it’s not in the state or town where your property is located then that experience doesn’t matter to where you are investing.
    Ali Boone
    Replied about 6 years ago
    Oh thanks for that one Joel. Great counter point to the idea of being able to report the tenants to the program. And a believable one too. I think you are right, the key is knowing how it all runs in the exact location you will be doing it.
    Ali Boone
    Replied about 6 years ago
    Jacob, why not SFRs but you are okay with it for MFRs?
    Ali Boone
    Replied about 6 years ago
    Jacob, why not SFRs but you are okay with it for MFRs?
    Ali Boone
    Replied about 6 years ago
    Jacob, why not SFRs but you are okay with it for MFRs? Reply Report comment
    Jacob Truthsayer
    Replied about 6 years ago
    The pros are that you don’t have to chase a good portion of the rent which can improve cash flow. It may also be easier to rent out larger units with 3 and 4 bedrooms to Section 8 clients. I would go market rent on all units smaller because it is easier. The cons are that a majority of section 8 participants do not care… period. They will tear up your place as they are not paying for it. If you try enforce compliance of building rules, many tenants do not care (or maybe don’t fully understand) that they can lose their voucher. You may have a conversation like this… “please pay your portion of the rent by Friday or I will be forced to proceed with eviction and you will lose your voucher”… response, “I am going on a cruise this weekend” (yes, she did lose her voucher). That is not uncommon. Another recent development is cut-backs due to the sequester. Local housing authorities are left with the problem of trimming 5-10% off their budgets. This has resulted in longer delays in the placement process. Also, my local housing authority has essentially doubled the housing standards and cut their number of inspectors in half which has resulted in an administrative chaos (delayed re-inspection of items that were previously not an issue resulting in abatement of rent payments). I recently witnessed a landlord terminate a quality, long-term tenant simply because he did not want to deal with the housing authority. Don’t even get me started on the rent reasonableness process which totally lacks transparency. My advice, rent to Section 8 if you have to but do not have any illusions. Be very selective and don’t assume that if a person has a voucher they will be a good tenant. The most useful screening tool is if the applicant is working or not (or has a solid work history). I’m sure there will disagreement with that but it is very workable so take it with a grain of salt.
    Ali Boone
    Replied about 6 years ago
    Jacob, do they just not care that they can get thrown out of the program? What proportions of section 8 tenants are like this?
    Jacob Truthsayer
    Replied about 6 years ago
    Ali, Yes, many section 8 tenants do not care and it amazes me every time I run into it. If you get a judgement against a section 8 tenant and present that to their housing specialist, they will automatically lose their voucher subject to an appeal hearing (which the landlord has the right to attend). I would assume the proportion varies with the area. Last year, I saw four tenants unnecessarily lose their voucher for non-payment issues. The way I handle it is recognize what’s happening, explain in a non-threatening, professional manner the consequences of non-payment and then give the tenant the choice. If I invested in single family homes, there is no chance that I would deal with Section 8… none.
    Jacob Truthsayer
    Replied about 6 years ago
    The pros are that you don’t have to chase a good portion of the rent which can improve cash flow. It may also be easier to rent out larger units with 3 and 4 bedrooms to Section 8 clients. I would go market rent on all units smaller because it is easier. The cons are that a majority of section 8 participants do not care… period. They will tear up your place as they are not paying for it. If you try enforce compliance of building rules, many tenants do not care (or maybe don’t fully understand) that they can lose their voucher. You may have a conversation like this… “please pay your portion of the rent by Friday or I will be forced to proceed with eviction and you will lose your voucher”… response, “I am going on a cruise this weekend” (yes, she did lose her voucher). That is not uncommon. Another recent development is cut-backs due to the sequester. Local housing authorities are left with the problem of trimming 5-10% off their budgets. This has resulted in longer delays in the placement process. Also, my local housing authority has essentially doubled the housing standards and cut their number of inspectors in half which has resulted in an administrative chaos (delayed re-inspection of items that were previously not an issue resulting in abatement of rent payments). I recently witnessed a landlord terminate a quality, long-term tenant simply because he did not want to deal with the housing authority. Don’t even get me started on the rent reasonableness process which totally lacks transparency. My advice, rent to Section 8 if you have to but do not have any illusions. Be very selective and don’t assume that if a person has a voucher they will be a good tenant. The most useful screening tool is if the applicant is working or not (or has a solid work history). I’m sure there will disagreement with that but it is very workable so take it with a grain of salt. Reply Report comment
    Jacob Truthsayer
    Replied about 6 years ago
    The pros are that you don’t have to chase a good portion of the rent which can improve cash flow. It may also be easier to rent out larger units with 3 and 4 bedrooms to Section 8 clients. I would go market rent on all units smaller because it is easier. The cons are that a majority of section 8 participants do not care… period. They will tear up your place as they are not paying for it. If you try enforce compliance of building rules, many tenants do not care (or maybe don’t fully understand) that they can lose their voucher. You may have a conversation like this… “please pay your portion of the rent by Friday or I will be forced to proceed with eviction and you will lose your voucher”… response, “I am going on a cruise this weekend” (yes, she did lose her voucher). That is not uncommon. Another recent development is cut-backs due to the sequester. Local housing authorities are left with the problem of trimming 5-10% off their budgets. This has resulted in longer delays in the placement process. Also, my local housing authority has essentially doubled the housing standards and cut their number of inspectors in half which has resulted in an administrative chaos (delayed re-inspection of items that were previously not an issue resulting in abatement of rent payments). I recently witnessed a landlord terminate a quality, long-term tenant simply because he did not want to deal with the housing authority. Don’t even get me started on the rent reasonableness process which totally lacks transparency. My advice, rent to Section 8 if you have to but do not have any illusions. Be very selective and don’t assume that if a person has a voucher they will be a good tenant. The most useful screening tool is if the applicant is working or not (or has a solid work history). I’m sure there will disagreement with that but it is very workable so take it with a grain of salt.
    Alex Craig
    Replied about 6 years ago
    Not a big fan of section 8. The tenants tend to be rude and demanding. We had one move out this week that trashed the house; I asked them to clean up the house otherwise I would not send over their new MHA form for the new house they wanted to move into. They did not want to do this and 6 of them came to my office and threaten to kick my you know what up. They proceeded to act foolish in our building and I had to call the police.
    Ali Boone
    Replied about 6 years ago
    Sorry Alex, I did laugh a little at your story! Although not funny when you’re getting threatened, for sure. Great point about the tenants. I guess the best avoiding methods for those is just serious vetting in the beginning. Even then nothing is guaranteed.
    Jen Kurtz
    Replied about 6 years ago
    I strongly believe that sec 8 experiences will be good if you have a good house authority and also a good tenant. In my experience, I have known some great sec 8 tenants that I have seen work hard, get education, and get themselves better work- to the point where their portion subsidized was reduced or taken off entirely. I had the pleasure to share that with them, to keep a professional relationship but also be friendly enough to create that bond. With that positive relationship as their property manager, they have stayed in their unit. Sure, I have also known some sec 8 tenants to be extremely entitled and expect the world on a platter. But as long as you do what you need to do to provide decent housing that abides by the rules and agreement with the HA, then that is all you are required to do. I’ve worked with a couple different authorities and some are better than others as to response and communication. As with everything else, whether sec 8 or market rate tenants- still screen accordingly, ask for landlord references, use the same application criteria for all applicants, and enforce the same rules for everyone.
    Ali Boone
    Replied about 6 years ago
    I think you’re right on all Jen. Screening is the big part, as with any types of tenants. Definitely a note about the different areas too as far as which authority you have to deal with.
    Ali Boone
    Replied about 6 years ago
    I think you’re right on all Jen. Screening is the big part, as with any types of tenants. Definitely a note about the different areas too as far as which authority you have to deal with.
    Scotty Davis
    Replied about 6 years ago
    I do a few section 8 rentals. I have had most tenants on section 8 stick to the rules and keep the house fairly clean. A section 8 tenant is responsible for finding the housing they want to live in and getting kicked out for a lease violation could mean they are kicked out of the section 8 program. They do not want to risk that. A section 8 tenant will sometimes have a family change at times example: ( a child turns 18 and is not enrolled in college so tenant cant claim child.) and this causes the section 8 program to change tenant from a 3 bedroom to a 2 bedroom home. The section 8 program will do home inspections every year and it is required that the landlord and tenant be present for the inspection. The inspection is a good time for you to bring up any rough housing you are unhappy with. The only thing I can think of that I keep my eye on would be traffic in and out of the rental. Some section 8 sure like to keep alot of company and other tenants if they live close dont appreciate this. Always have a list of rules stating what you expect and have the tenant sign a copy and put in their file. That way when you bring them in check that cant say they did not know. Ok enough rattling on for me. I recommend section 8 but be selective.
    Ali Boone
    Replied about 6 years ago
    Great points Scotty! Great things to consider and work with.
    Steve Babiak
    Replied about 6 years ago
    Only one con in that list!?! How about having to pass an annual inspection? And sometimes having to repair things that were damaged by the tenant in order to pass. And let’s not forget about how/why rent increases happen. And you will definitely have more regulation as a landlord under section 8, with the Housing Authority setting certain requirements.
    Ali Boone
    Replied about 6 years ago
    How intensive are the annual inspections, Steve? How strict are they on the landlords?
    Ali Boone
    Replied about 6 years ago
    How intensive are the annual inspections, Steve? How strict are they on the landlords?
    Ryan
    Replied about 6 years ago
    The biggest con I’ve had going section 8 is waiting for the house to qualify and all the paperwork to be completed. In my area this has been a 2-3 month process in the past. The big issue is that leaving a home unoccupied in an area where section 8 tenants are common opens your rental up to all kinds of possible abuse. Break-ins, vandalism, etc. I don’t like section 8 strictly because of this. After having gone through all of the above I now stay away from it.
    Ali Boone
    Replied about 6 years ago
    Hmmm Ryan, so I guess during that time you can’t be looking for the tenants either, so add even more time to that 2-3 months to find tenants once the property is approved?
    Jessica Sala-Bonin
    Replied about 6 years ago
    I like section 8 tenants…never have to worry about them paying!
    Ali Boone
    Replied about 6 years ago
    Love that Jessica! Love my paychecks.
    Ali Boone
    Replied about 6 years ago
    Love that Jessica! Love my paychecks.
    Robert Steele
    Replied about 6 years ago
    And if you had asked me a year ago I would have still said yes. How long exactly have you been involved in RE?
    Ali Boone
    Replied about 6 years ago
    Who, me, Robert? I’ve only been in it for 2.5 years. What changed in the last year to make you change your stance?
    Sharon Vornholt
    Replied about 6 years ago
    Ali- I didn’t rent to section 8 tenants, but those folks I know that have had success with that program are really picky when choosing tenants whether or not they are section 8. They simply will leave the property empty a little longer rather than “settling”. I believe that is the key to success not only with this program, but with tenants in general . It is my understanding that these folks get kicked out of the section 8 program if they destroy your property. Nice post. Sharon
    Ali Boone
    Replied about 6 years ago
    I agree Sharon. My favorite property manager tends to take significantly longer to find tenants than others I’ve had, but he also always gets perfect tenants who stay longer too! I love it.
    Shari Posey
    Replied about 6 years ago
    We had a great section 8 tenant for about 5 years and unfortunately he passed away or he would probably still be there. The inspections were basic and covered valid issues (like heat and a stove). Honestly, I don’t see any difference between our section 8 tenant and some of the others we have had. I would not hesitate to rent to section 8 again but haven’t needed to because the rental market is really strong here.
    Ali Boone
    Replied about 6 years ago
    That’s great, Shari (about the market, not your tenant passing away). Great put.
    Darleen
    Replied about 6 years ago
    We have a few section 8 tenants. They are a pain to work with, but if we get the rent on time, it’s eventually a good deal. We certainly take into account the amount of damage in the property, and like your post said, hope them to stay long enough so the rent pays for the damages, and still gives us some positive cash-flow.
    Ali Boone
    Replied about 6 years ago
    Yeah, that’s been my thoughts about the damages Darleen.
    Frank O
    Replied about 6 years ago
    Good stuff. I don’t have much experience in renting Section 8 housing, so I will definately use this page for future reference.
    Ali Boone
    Replied about 6 years ago
    Awesome Frank!
    Dawn Anastasi
    Replied about 6 years ago
    Just about to start renting to Section 8 so I guess I’ll see what this experience is like.
    Ali Boone
    Replied about 6 years ago
    Let us know Dawn!
    fred martin
    Replied about 6 years ago
    I have rented to three Sec 8 over the years. The first was great, the next one was trashy but stayed for four years and now the last one is demanding but keeps a pretty clean house. I tend to be able to get a higher market rent so overall it has been worth it.
    fred martin
    Replied about 6 years ago
    I have rented to three Sec 8 over the years. The first was great, the next one was trashy but stayed for four years and now the last one is demanding but keeps a pretty clean house. I tend to be able to get a higher market rent so overall it has been worth it.
    Ali Boone
    Replied about 6 years ago
    Yep, sounds like it’s working for you Fred. I think you just summed up the big possibilities for how it could go! At least the good ones.
    chamorga
    Replied about 6 years ago
    I have a friend who does only section 8 in Misssippi, inspections can be a pain but most of her tenants are multi- year, and she does not do anything but section 8. As a previous poster mentioned, dealing with the employees can be your biggest problem. She has had 2 evictions in 8 years. Not a bad record for a 7 home portfollio. Her biggest problem has been delayed maintenance by the previous owners. I am considering section 8 for my El Paso, TX homes.
    Ali Boone
    Replied about 6 years ago
    Great put Chamorga. Cool to hear an actual track record! Thanks for sharing.
    Lear
    Replied about 6 years ago
    I believe it strongly depends on the city, and state. Most states have efficient tenant removal laws. New York City, god awful, my poor sister had a two year toxic ordeal removing a deadbeat tenant. Me personally won’t do it it’s just too many good quality tenants, to tinker with Section 8 for me.
    Ali Boone
    Replied about 6 years ago
    Makes sense Lear!
    Matt Roe
    Replied about 6 years ago
    I have my first rental property that I am about to put on the market and I am considering section 8. I haven’t done any research yet aside from reading this post. The property is in a rough area where the market rents are about 600-650/mo we did a nice rehab on it and we’re looking to get 700-750/mo out of this one. From what I’ve read above I think we’re going to go section 8 the benefits seem to outweigh the negatives. I feel in rough areas if your getting guaranteed rent on time and possibly someone who will actually take care of the house 1 or 2 out of 2 important aspects of a tenant is better than renting non sec 8 to the same clientele that might not pay on time or take care of the property. I didn’t know that sec 8 could possibly rent for above market value. Where can you find this type of information? (my property is in OK) Also when determining the rent for your sec 8 property do they take into consideration the condition or possible above average upgrades? Or is it strictly based off of the location and number of bedrooms? Reply Report comment
    Matt Roe
    Replied about 6 years ago
    I have my first rental property that I am about to put on the market and I am considering section 8. I haven’t done any research yet aside from reading this post. The property is in a rough area where the market rents are about 600-650/mo we did a nice rehab on it and we’re looking to get 700-750/mo out of this one. From what I’ve read above I think we’re going to go section 8 the benefits seem to outweigh the negatives. I feel in rough areas if your getting guaranteed rent on time and possibly someone who will actually take care of the house 1 or 2 out of 2 important aspects of a tenant is better than renting non sec 8 to the same clientele that might not pay on time or take care of the property. I didn’t know that sec 8 could possibly rent for above market value. Where can you find this type of information? (my property is in OK) Also when determining the rent for your sec 8 property do they take into consideration the condition or possible above average upgrades? Or is it strictly based off of the location and number of bedrooms? Reply Report comment
    Matt Roe
    Replied about 6 years ago
    I have my first rental property that I am about to put on the market and I am considering section 8. I haven’t done any research yet aside from reading this post. The property is in a rough area where the market rents are about 600-650/mo we did a nice rehab on it and we’re looking to get 700-750/mo out of this one. From what I’ve read above I think we’re going to go section 8 the benefits seem to outweigh the negatives. I feel in rough areas if your getting guaranteed rent on time and possibly someone who will actually take care of the house 1 or 2 out of 2 important aspects of a tenant is better than renting non sec 8 to the same clientele that might not pay on time or take care of the property. I didn’t know that sec 8 could possibly rent for above market value. Where can you find this type of information? (my property is in OK) Also when determining the rent for your sec 8 property do they take into consideration the condition or possible above average upgrades? Or is it strictly based off of the location and number of bedrooms?
    Ali Boone
    Replied about 6 years ago
    Hey Matt. I don’t want to say for sure that it’s actually above market rents that you can get from it, but in the cases where people just aren’t wanting to pay what you are asking (like if “market rent” hasn’t caught up to what people are actually willing to pay), you may still be able to get around market. So no relation exactly to market rent, but possibly just a little more out of the tenants. I haven’t dealt with the program directly (I have property managers) so not sure what they base it off of or don’t. I would imagine the location has a lot to do with the quality of tenants as well. Some cities have much higher-paying section 8 tenants (like Chicago, rents are really high so the rents even on a section 8 house are well over $1000/month), whereas some really low-income areas are likely to bring in a different quality of tenant.
    Matt Roe
    Replied about 6 years ago
    I looked up some of the section 8 guidelines in my target city today and found what I thought was some good news to help support sec8. There were a few things that I learned that I didn’t know about, the main ones I liked were: 1. To qualify for the sec8 voucher the city actually does a screen process including a criminal background check. 2. They will supply you with the contact info for any known past or current landlords. 3. The tenant is responsible for any damage done to the property aside from normal wear and tear. 4. Sec8 does rent higher in my city. Needless to say I think I’m going to give it a shot at the least but the pros definitely seem to outweigh the cons.
    Eric
    Replied almost 6 years ago
    I used to be a section 8 landlord, I now have 24 private market rate rentals. It can be good, and bad. Look for a solid credit score, 620+, even with section 8. If not, you run into trouble. Remember, Section 8 tenants get FREE legal advice and filings if you mess up. A common theme for Section 8 is a live-in felon boyfriend, or other extra guests. Lots of trash, they get a new mattress, the old one is yours. Section 8 tenants do not pay for damages, they have no money. You will lose the tenant if you attempt to collect. Section 8 tenants are generally HIGH maintenance, but credit score goes a long was to uncovering bahavioral issues before it is too late. Criminal records mean nothing. You should have bought the porperty, did the bare minimum, and rented. Anything extra you paid to get Section 8 was a waste. A nicer place will not help you with section 8, only more to maintain.
    Tia
    Replied about 6 years ago
    My personal opinion is this. There are more pros than cons, if you do things right. Section 8 tenants have to qualify to live in your property just as anyone else would. If you screen those applicants the same way you would a non Section 8 applicant you should be fine.
    Ali Boone
    Replied about 6 years ago
    I agree Tia.
    Ken Eber
    Replied about 6 years ago
    Sec 8 tenants are told – “if you can find a landlord who will take a 1 bedroom voucher for a 2 bedroom or 2 bdrm voucher for a 3 Bdrm home, and a 3 bdrm voucher for a 4 Bdrm. in other word in my area , which is cheap, translates to taking 400 for a 2 Bdrm house not 495 ETC. And if your stock is up do it. It would be nice if they had a job and not just SSI (for the kids…). Inspections are once a year, YOU pay the repairs – Oh you can charge it back to tenant… right. But what is the turn around cost? VS damages/wear tear? Just fix it and keep tenant. Keep to the voucher size, keep up with maintenance request and keep em happy. Most people are hard working, but i still hear, “Why do i need income Sec 8 pays my rent, and i get food stamps, ssi, and child support…. OH, show them how to change a Furnace filter and cut that expense, HEY, some times people move because the heaing cost went up. when i show places i show them the furnace, Oh really they say – or how a ceiling fan button pushed up take warm air off the ceiling back to you below, or new windows open the upper sash “pull down to allow heat out in the summer”. OK i’m all over the place – EDUCATE YOUR TENANT – Be happy. thanks Handy handymanfortwayne.com
    Ali Boone
    Replied about 6 years ago
    Lol. Good info Ken!
    Michelle
    Replied about 6 years ago
    Really interesting article, Ali. It definitely is something I’ve considered for my rental. I knew personally of a case here in my town where the landlord had a Section 8 tenant who was going on 25 years in his property. She did pass away or would still be there today. She loved the house and took care of it. She didn’t drink or do drugs and she wasn’t demanding of every little thing. She was the perfect tenant. Here the waitlist is 3 years for a tenant to get on the program and this is a town of less than 100k.
    Ali
    Replied about 6 years ago
    Oh wow, that wait list should be enticing for tenants to keep up their status! And wow, if only all my tenants would stick around fro 25 years… Nice!!
    Kathy
    Replied about 3 years ago
    I want to be a tenant but no landlord would take my voucher. I lived in colorado at the same place and job for 5 till I had to move back to Texas. I always had a great background check. I had a great landlord that gave a great reference for and I still get shut down. Fees, application just not understanding why. I want to have my own place that I can call my own. If landlord not willing to do section 8 then they need to stop taking applications, absorbing people in and out. They setting them up to fail. I just want the best for my family. So what I need a little help I’m a single mother wanting to be a good tenant from the right person. It’s a lot of people going to be on the streets.
    joe
    Replied over 5 years ago
    Do you people give any thought to your neighbors? Those hard working homeowners/renters that get no subsidies to pay their mortgage or rent? By renting to section 8 you reduce their quality of life by having to live next to thugs and drug dealers, some only a wall away. The housing values get trashed and their goes years of planning and hard work. You all disgust me. It’s all about money but do ANY of you live in a section 8 neighborhood? If not you have no business making judgments.
    Ali Boone
    Replied over 5 years ago
    Thanks for your response Joe. I definitely don’t think it’s a black and white situation though. There are plenty of section 8 renters that are the furthest thing from drug dealers and thugs. It all depends on your tenant screening process. More so though, it depends on where the neighborhoods are and what quality they are in general. If it’s a neighborhood where thugs and drug dealers would even want to live, that is a different can of worms than a really nice neighborhood (assuming that is where more of the fully-paying homeowners are that you refer to), of which the bad guys are likely not to be living anyway. I don’t think anyone on here was trying to make a judgement one way or the other, the point is to more state facts. What are the pros and cons of section 8 and what are the risks? I don’t think anyone on here would want to lower the quality of a neighborhood by putting low-quality renters in.
    Liam G
    Replied over 5 years ago
    I think it all depends on the neighbors. I have an S8 tenant, who does have problems, sometimes argues with his exwife, and sometimes burns his popcorn. However, I get calls from him because of the neighbor’s dog because the dog is barking constantly. Who is to say the smell of burnt popcorn is worse than the sound of a barking dog? BTW, the neighbors are not section 8.
    Ali Boone
    Replied over 5 years ago
    Lol Liam. Love the burnt popcorn issues. Not one of the standard ones most people hear? I actually love for my popcorn to be a little burnt but definitely not so burnt you can smell it 🙂
    Liam G
    Replied over 5 years ago
    I think it all depends on the neighbors. I have an S8 tenant, who does have problems, sometimes argues with his exwife, and sometimes burns his popcorn. However, I get calls from him because of the neighbor’s dog because the dog is barking constantly. Who is to say the smell of burnt popcorn is worse than the sound of a barking dog? BTW, the neighbors are not section 8.
    Marilyn
    Replied over 5 years ago
    I was on section 8 when I was a single parent and took excellent care of my apt. I’d say it looked better when I left than when I started to rent. Just because you are poor doesn’t mean your a slob. There are bad tenants on and off section 8 but from what I saw, most on section 8 were single parents or on disability. You are right, getting vouchers are not easy and the rent help isn’t something someone on section 8 wants to lose. We are inspected as well to make sure we are keeping the apt in good condition. I don’t know why it would be any different to rent to section 8 than not.
    Ali Boone
    Replied over 5 years ago
    Marilyn, thanks for sharing your side of it! It’s great to hear from an actual tenant and get their input!
    Ivan Paxton from Denver, Colorado
    Replied almost 5 years ago
    I’m thinking about getting into section 8 rentals for SFHs and have 2 questions not yet addresses here: 1. What’s the deal with deposits? Does the tenant have to come up with that themselves or is there help from the county? 2. Would I have to repair appliances? My standard lease agreement says the appliances are provided as a courtesy so if they break the tenant has to repair/replace them. Thanks in advance.
    Ali Boone Business Owner & Investor from Venice Beach, CA
    Replied almost 5 years ago
    Someone else will have to answer these Ivan. I’ve never landlorded myself, only used property managers, and they are the ones who handle all of that so I’m not sure how those are done.
    Jen Kurtz
    Replied almost 5 years ago
    Ivan, Section 8 residents are still responsible for the deposits. The housing authority is not going to cover those and track which one sthey get back, and all of that. When I was working at a very low-income property (with residents that had no extra cash or the ability to get extra cash for deposits), they would typically reach out to local non-profits like Catholic Charities or the VA for assistance on deposits. This usually results in a little bit of paperwork and sometimes they might want to perform an inspection also, before receiving those funds. About appliances, if it is there, it has to function. So if you specify on the RFTA (Request for Tenancy Approval), that you fill out before a section 8 unit is inspected and the resident moves on, that appliances are supplied by landlord then that is what you need to fulfill. If it breaks, you fix it, like most landlords. In all honesty, I havent heard of an agreement where the landlord supplies an appliance but does not repair it if it breaks. I would never agree to that as a tenant. A tenant should be able to expect the unit to function as it did at move-in. Now, if they break blinds or trash the carpet, that is different. They can replace their own blinds or I’ll do it and charge them for it. Ill charge for carpet cleaning too unless they schedule it and pay it on their own. I hope that helps!
    Ivan Paxton
    Replied almost 5 years ago
    That helps a lot. Thanks Jen.
    Jen Kurtz Professional from Pittsburgh, Pennsylvania
    Replied almost 5 years ago
    No problem Ivan, my pleasure! 🙂
    Tiffany Mcmath
    Replied over 3 years ago
    Hi me and my four small kids ported out of Atlanta GA section 8 because I was running from a domestic situation which I explained to the landlord found a house on section 8 been waiting for a month with the whole process up until it was time for inspection and there was 23 items that needed to be fixed majority of them was minor now she’s saying she doesn’t want to rent to me because they want allow me to move in while she fixes the repairs she then told me she’s going with someone with another housing authority because their not going to give her that many problems about things needing to be fixed. I’m disabled with lack of money to find another place because the agreement was to get this home after us both signing the rta we are about to lose our things in the storage and become homeless behind all of this what do I do I feel its not right to me are my kids.
    Cathy Gaupo Investor from Dulles, Virginia
    Replied almost 3 years ago
    Question about Section 8. I read upstream that the property must be inspected once a year by the housing authority and the owner. Does it have to be the owner or could it be the property manager? I am a out of state investor in the property that I would like to buy.
    Ali Boone Business Owner & Investor from Venice Beach, CA
    Replied almost 3 years ago
    Cathy, you’d want to contact the section 8 housing authority in the state the property is in. Section 8 rules can vary between states so it’s hard to answer, and you’d want to be sure you have the most accurate information.
    Jim Yount
    Replied about 1 year ago
    I never rented to SEC8 people. I would tell them we would take their application but there is a non refundable 100 dollar criminal and financial back ground check on them. That was enough to send them in another direction. They are 9.9 times out of 10 trouble.