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Why Won’t You Rent to Poor People?

Ben Leybovich
4 min read

It just so happens that I’ve been writing a lot lately about the role of Section 8 in our business, and my articles seem to have stirred-up a fair amount of conversation, specifically the article entitled Why Real Estate Investing May Not Be a Good Business 10 Years From Now from about a month ago which received an obscene 226 comments…  Wow – I guess people have a few opinions when it comes to the housing subsidy; unfortunately most of the opinions are not good!  Let’s see if we can clear some things up.

I am going to indulge myself in a bit of “straight talk” in telling those of you who will not consider renting to a tenant qualified with Section 8 that you are wrong – flat out!  Let me ask you – when the hell did a high-paying job or presence of money become indicative of character? Because this is precisely the implication here.

You are so quick to judge and assume that all people who get help are leaches, bums raping the system.  There are a lot of those – sure there are, and I’m not suggesting you rent to them.  I’ve turned over 14 units in the past few months and only one of them ended up rented to a Section 8 tenant.  Why did I rent to her – because having checked her out I’ve made the call that she is a good person, and I don’t turn away good people simply because they can’t earn enough to qualify for my units and are forced to get help from Section 8…

My point is and has been:

There are good tenants who are subsidized and there are bad; there are good tenants who make good incomes and there are bad.  I kicked out 4 people in 6 months in that 10-plex that I bought in February and none of them were Section 8.  Many of us are quick to draw a parallel between a person receiving the subsidy and them being an irresponsible, lazy bum.  This has not been my experience.  Let me tell you a couple of stories…

Section 8 Tenant

The tenant I mentioned above is my first Section 8 tenant in seven years of being a landlord.  So far everything looks top notch.  My rents are due on the 1st and are late on the 6th.  She deposited her portion into my bank account on the 4th, which is when she gets paid.  She texted me, as I asked her to do, making me aware that the money had been deposited.  And naturally Section 8 wired their portion, which by the way, happens to only add up to about 20% of the total rent – the tenant is carrying most of the water on this one.  She works a lot and she and her daughter are quiet and respectful by all accounts.  In short, she appears grateful to be there and there are no indications of any problems thus far.

On The Other Hand…

I had just finished remodeling one of the units in the 10-plex, and received an application.  It was a good application.  The applicant had no evictions, bankruptcies, foreclosures, or any other substantive blemishes on his record that I could reasonably pick at.  He works for a big employer earning a salary of around 70k, which is obviously enough to buy a house let alone rent one of my units.

I approved the application and we set up an appointment to sign the lease.  Do you think he showed up?  You would think that a person who has his stuff together enough to hold onto a 70k job would have the common decency to call…

And, if you can believe it, about a week later the idiot tried to call me on another unit; needless to say I had a bit of fun on that call…

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?

Fast Forward a Few Days

I received another application on the same unit.  This guy indicated, and I verified, full time employment earning close to $20/hour.  He pulled up to his appointment in a newer model vehicle that seemed well taken care of.  In short, all of the gauges pointed in the right direction, so I approved the application.  Without boring you with the whole story, let me simply tell you that 3 days into his occupancy I took the eviction packet to my attorney.

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?

As it turned out, I did not go through with the eviction because the tenant did come current in the end and I chose to let things be – this time.  I am not holding my breath for the future on this one though.

And Then There Was the Nurse!

She was a licensed registered traveling nurse.  I spoke to her superior and saw the pay stubs – more than enough.  She looked clean; in retrospect much too clean…

I later found out that local drug enforcement unit had my rental house under surveillance because she apparently had a hobby of drug trafficking.  As you can imagine an eviction took place – have you ever cleaned cocaine out of a sewer line…?

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?


Indeed, ladies and gentlemen, income is a very poor indicator of what’s in one’s soul.  Section 8 is a government program which subsidizes a portion of rent for people who qualify based on insufficient income.  Personally, I will not voluntarily rent to someone who is healthy and able to work but does not; call it a matter of principal.  But, I have no problem with someone receiving a subsidy if full-time employment is not enough to live with basic human dignity.

Granted, the government is not very good at weeding out abuse which results in a lot of unscrupulous people taking advantage of this program.  This is unfortunate, but your job as a landlord is to discern the good apples from the bad, and money is only about 15% of the equation.

What do you think; are you sticking to your guns of NO SECTION 8?

Photo: Thomas Hawk

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.