Landlording & Rental Properties

7 Reasons NOT to Invest in Section 8 Properties

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
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A handsome young businessman tries to call the boss over the phone while sitting with his colleague in front of a laptop.

The quality of your renters determines the quality of your returns.

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In over 15 years of landlording, I’ve found that to be true time and time again. And while there are plenty of good Section 8 tenants out there, my experience has been that it’s just plain harder to find reliable, high-credit, low-impact, respectful tenants in lower-income neighborhoods.

Many people instinctively object to that statement out of political reflex. To them I have a simple reply: “Go put hundreds of thousands of your own dollars in lower-income housing. Once you’ve accrued firsthand experience with it, we’ll compare notes.”

(The comments on this article should be fun!)

The hardest lessons I’ve learned as a real estate investor came from investing in hard neighborhoods. Many of those lessons I wish I’d known when I first started out—they would have saved me tens of thousands of dollars in losses.

I no longer invest in Section 8 rentals because of those lessons. Here are the reasons why.

Related: 7 Lessons I Wish I’d Known When I Started Investing in Real Estate

1. Annual Inspection

Section 8 requires an annual inspection of every participating property. And every single year, the inspector will find five to 10 items to list.

Why? Because it’s their job to list something. It proves to their supervisors that they’re actually visiting and inspecting every property on their list.

This is all well and good for keeping the bureaucratic cogs turning, but that doesn’t make it any more fair to you as the property owner.

I had a property where I’d spend $2,000-$3,000 on inspection-related repairs like clockwork every single year. Occasionally the inspector would point out a useful property repair or update. Most of the repairs were invented as busywork.

That $2,000-$3,000/year? That was my profit margin. Gone, every single year. I never earned a profit on that particular property.

Buyer beware.

fence with metal grid in background

2. Eviction Delays

Section 8 tenants are notoriously difficult to evict.

When they fail to pay their portion of the rent, or violate the lease in some other way, Section 8 requires extra steps from you to file and complete the eviction process. It varies by jurisdiction, but it could mean extra notice given, extra forms completed, an extra hearing, or an extra review.

I’ve had evictions take 11 months before. Meanwhile, the tenant laughed all the way to the bank with nearly a year of free rent.

3. Initial Renting Delays

Eviction isn’t the only thing that takes longer when you’re dealing with a bureaucratic machine like Section 8.

You can also expect a delay in renting to the tenant, due to Section 8’s initial inspection—during which they may issue mandatory repairs to you before allowing the tenant to move in.

Section 8 must approve the rental agreement and all other leasing paperwork. Even once they (eventually) give you and the renters the green light, you can still expect to wait up to 60 days for the first month’s rent check.

Nothing happens fast with Section 8.

4. Financing Challenges

At purchase prices below $75,000 or even $100,000, it’s difficult to get financing.

Lenders earn nearly all their revenues as a percentage of the loan amount. A $50,000 loan comes with the same amount of work as a $500,000 loan, but the latter brings in 10 times as much revenue.

Most investment property lenders don’t even consider loans below $75,000. And redlining laws notwithstanding, you better believe that underwriters pay closer attention to properties in lower-end neighborhoods.

I should know—I started my career working at a mortgage lender. From the lender’s perspective, these loans involve more work, less revenue, and higher risk. It’s a losing combination from their standpoint.

5. Higher-Risk Tenants

Get indignant if you want. But it’s true: lower-income tenants tend to be higher-risk tenants.

That risk comes in several forms. One of them is the risk of rent defaults; even the Federal Reserve reluctantly concedes that there’s a correlation between income level and credit history. And beyond lower average credit scores, lower-income renters tend to have less in savings to weather emergencies, as well.

Read: higher risk.

But defaulting on the rent isn’t the only risk. My experience has been that lower-income renters tend to be harder on their homes than middle- and upper-income tenants. Less gentle, less respectful of the properties. And that goes doubly for Section 8 tenants, who have less of their own skin in the game.

Critics can accuse me of generalizing. Yes, I am—because that’s the only way to discuss broad trends among millions of people.

Sad businessman leaning on glass

6. Lower-End Neighborhoods Come with Other Risks, Too

The tenants themselves aren’t the only risk in lower-end neighborhoods.

I’ve had excellent low-income tenants living in a rough neighborhood, and do you know what they did? They moved out as soon as they could afford it. I don’t blame them.

They complained about crime, which I sympathized with but could do nothing about. It caused high turnover rates, and as experienced landlords know, turnovers are the most labor-intensive and expensive point in the tenancy cycle.

Higher turnovers mean more work and lower returns as a landlord.

And the renters weren’t the only victims of crime—my properties got vandalized, broken into, and stolen from regularly. The most common incident involved dismantling the central air conditioning condenser to steal the copper tubing inside. That was $3,000 down the proverbial drain, every single time, because insurance wouldn’t cover theft in these neighborhoods.

I then installed steel cages over the condensers. Local lowlifes sawed through them and stole the copper anyway. I eventually stopped bothering to install central air conditioning in those neighborhoods.

In the end, I stopped investing in them altogether.

7. People Call You a Slumlord

The same people who lament the lack of affordable housing in one breath turn around and call you a slumlord in the next when you buy lower-end housing. Then they try to pass increasingly stringent regulations against you—all without ever investing a dollar of their own in affordable housing.

It’s a lose-lose proposition for real estate investors. This is precisely why there’s a dearth of affordable housing in the US: it’s neither economically viable nor politically viable for investors.

In my youth, I had grand visions of going into low-income neighborhoods and improving them, with beautiful renovations and amenities like central air conditioning. I then got pecked to death by inspectors, ever more stringent anti-landlord laws, and activists calling me a slumlord, even as I lost more and more money from break-ins, turnovers, mandatory inspections, and registration fees.

If activists want more affordable housing, they can invest their own money.

If You Must Invest in Section 8 Rentals…

New investors are drawn to lower-end rentals because they’re cheaper, and therefore easier to buy when you’re just starting out.

Resist the temptation. They may cost less to buy and look like they have better cash flow numbers on paper, but they come with hidden costs like higher turnover rates, higher property damage and repair costs, higher vacancy rates, and higher eviction rates.

But if you dismiss everything I outlined above for political reasons, stand by your principles by investing your own money in Section 8 rentals. Just make sure you protect yourself better than I did by following these tips.

Attractive woman reading good news from business partners on laptop

Make Sure the Numbers Work for Cash Tenants, Too

Investors used to love Section 8 rentals because Section 8 sometimes paid higher-than-market rents.

While that’s largely changed in recent years, in some districts it still happens. Regardless, you can’t count on those higher rents.

When you run the cash flow numbers, make sure they work even if you rent to a cash tenant paying market rent.

Screen Applicants Aggressively

In higher-risk neighborhoods, you need to be extra thorough when screening tenants.

Beyond screening reports, talk to current and former landlords, and verify that they are, in fact, the applicant’s landlord. Getting your buddy to pose as your landlord is an old trick, and one that applicants have tried on me before in lower-income neighborhoods.

Importantly, also inspect their current home, with as little notice as possible. You want to see how they live day-to-day, how well they keep their home on an average day.

Because that’s how they’ll treat your property.

Related: 7 Advanced Tenant Screening Tips (So You’re Not Fooled by Wolves in Sheep’s Clothing)

Tenant-Proof Your Property

The more indestructible you can make your property, the less damage your tenants will do.

Do everything in your power to tenant-proof the property, from replacing carpets with invincible luxury vinyl tile to coating the walls with glossy, wipe-clean paint.

Collect the Highest Security Deposit You Can

No matter how well you tenant-proof the property, you still risk damage.

Protect yourself and your property by collecting as much of a security deposit as possible.

Inspect the Unit Every 6 Months

By conducting semi-annual inspections, you achieve several goals.

First, you can spot needed repairs and other property issues early. Second, you can spot lease violations and nip them in the bud.

But perhaps most importantly, you send a loud, clear message to your tenants that you care about the property, that you’re paying attention, and that you enforce the lease rules.

Sound like a lot of work? It is. Welcome to landlording.

Don’t Drag Your Feet with Evictions

If the tenants do violate the lease, send an official eviction warning notice immediately.

It reinforces the message that you do not tolerate violations, and that the rent should be their first financial priority, not their last. Tenants will push your boundaries, and it’s your job as a landlord to defend them if you want your tenants to respect them.

Besides, as outlined above, the eviction process takes a long time with Section 8 tenants. They’ll have ample opportunities to bring the rent current or fix the violation before the eventual put-out date.

Final Thoughts

There are better ways to buy real estate with little money down than buying Section 8 properties in low-end neighborhoods.

I can’t tell you how many people have spit personal accusations at me over my arguments above. For some reason, people get very personal over it. Yet they never dispute the argument itself with, “I disagree because I’ve found Section 8 properties a sound investment for these reasons.” Instead they try to silence opposing opinions by attacking the dissenter: “People like you are the reason there’s not enough affordable housing in this country.”

I don’t invest in Section 8 properties anymore. I don’t recommend that you do either, unless you go out of your way to learn the strange world of low-end real estate investing. It’s a unique niche, and one that most investors find they don’t have the stomach for.

But however you choose to invest, the most important point is that you protect yourself and your investment.

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Disagree? I’m all ears to opposing opinions. Just keep your arguments grounded in economic and investing terms, not political or personal terms!

Let’s talk in the comment section below!

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their living expenses. Through his company at SparkRental.com, he offers free rental tools such as a rental income calculator, free landlord software (including a free online rental application and tenant screening), and a free masterclasses on how to reach financial independence within 5 years.

    Joseph M. Rental Property Investor from Sacramento Area, CA
    Replied 2 months ago
    You forgot to mention: all of the damage the children do to the place, the "baby daddy" that stays there all the time but not of the lease and oh yes, the sense of entitlement because the LL is rich and the LL can afford to absorb any damage or income loss. I too, no longer rent to Sec-8 or tenants that rely on Gov't handouts to live. I feel for you regarding stealing the copper from the AC. That is a very painfull loss that you hardly ever recoup.
    Michael Steven Harris
    Replied 2 months ago
    I went through a period where I lived in low income/disability housing. There are some things I'd like to add. Management is crucial if your planning to visit the property once every 6 months yeah you're going to get screwed. Visit the property at least once a month. Two, make your property clean and durable you will have little trouble attracting the high quality low income tenant, trust me they will find you. There are so many properties with absent management and trashy appearance that it is not overly hard to stand out as a cut above. Now is this the totally passive investment many people dream of having? No, but then not much comes in this life without at least some work.
    Ryan Schroeder Rental Property Investor from Saint Paul, MN
    Replied 2 months ago
    I absolutely agree on all of your points. Like you my early investments were in affordable housing. In all my years of rental property ownership, however, I've only one actual Section 8 Voucher tenant and in that particular case it worked out fine for me. However, for the preponderance of tenants during that period the cost in time and money exceeded the actual rent received (and I spent a lot of time in court getting UD's on tenants who wouldn't leave but had no interest in paying rent). So I upgraded and will never go back. I also agree that a good share of the activists know not of what they speak. They see landlords as greedy and do not understand what it takes to conduct constant repairs due to damage created by tenants for whom they advocate. Minneapolis just adopted a number of rental licensing changes targeted toward limiting the ability of property owners to conduct background checks. It will be interesting to see the unintended consequences of that and how Minneapolis will react when these new policies create problems
    Wenda Kennedy JD from Nikiski, Alaska
    Replied 2 months ago
    I provide the only "bank" of affordable housing in my community through my rentals in my mobile home park. And that includes some Section 8 tenants. A lot of things in this article are true. Managing rental units for low-income tenants gets bazar at times. I'm thinking about writing a book about my experiences as the LL. I own my own Peyton Place complete with just about every kind of misconduct and bad life decision that can happen. And I have a front-row seat to all of it. I wonder if anyone would believe my stories...
    Adam Geber from Mattoon, IL
    Replied 2 months ago
    Wenda you should store an article outlining some of your experiences here on BP!
    Marina Spor Investor from Buena Park, California
    Replied 2 months ago
    How do you verify that the previous landlord reference is the actual landlord and not a buddy?
    Stanley Furman
    Replied 2 months ago
    Look online for eviction/housing matters and research prospects names. Photograph their driver's license to make sure they are who they say. Look online for arrest records/convictions. Call the assessor and see if the recorded name of the owner is the same as the one on the application. Get the actual owner's address. It is impossible to be too paranoid in this business. I've talked to a "current landlord" who told me how wonderful this person was, and I asked him "than why are you evicting him"? Silence.....then "How did you find that out"?
    Emily Garriott Rental Property Investor from Greenville, SC
    Replied 2 months ago
    Make sure to actually look up the phone number they give you and research it, do some stalking and look for red flags. Check tax records of past property/landlord and make sure it matches up, etc.
    Mark JOhnson Investor
    Replied 2 months ago
    As an experienced landlord of 19 years, I can assure everyone the author hit the nail on the head. Well written and far more politically correct then I would have been! Good job.
    Ronald Bibb
    Replied 2 months ago
    As an experienced landlord of 12 years, I can assure everyone the author DID NOT hit the nail on the head. How well it is written does not speak to weather or not it is true. And while you would choose to be far less politically correct, keep in mind that section 8 is not a wealth transfer from taxpayers to "low income" individuals (what label would you use since your not politically correct?), it's a wealth transfer from tax payers to property owners. The tenants receive enough of a benefit to keep their heads treading water in exchange for having the public's ire over the wealth transfer directed at them as opposed to the ones getting wealthy from the program, including myself, so perhaps being politically incorrect is not necessary. Point number one and three are the authors only universally accurate points. The other points, including point one, taken collectively speak more to the type of properties he invested in rather than section 8 tenants as a whole. What kind of property has 2k in annual repairs from housing inspectors who barely know what they are doing in the first place?? Half the time their "annual inspection" consists of walking in, asking the tenant how things are going, and saying "ok, thank you". Approximately 60% of my portfolio is made up of section 8 tenants in the Dallas Fort-Worth area and while there are certainly the stereotypical housing tenants, experience has taught me how to navigate the program with excellent results. Beginning with the choice of property and ending with the choice of tenant, and it's that simple. I purchase property in C class area's that can be rented to either housing or non-housing tenants, and I require my tenants who are not on disability to work full time. Those two simple things and I've only evicted one housing tenant in 12 years (and that was my fault because I should have never rented to her in the first place). I have no doubt the author is sincere in his experience and I'd imagine there are variances state by state, but readers need to keep in mind that this is one man's experience and should be taken as such. Once you learn what your doing, section 8 tenants are a goldmine and will stay and help you build wealth for 5-10 years before they move on. That's my experience so did I hit the nail on the head?
    Scott Nelson Real Estate Investor from Naperville, Illinois
    Replied 28 days ago
    I was going to reply to the author but then decided that I'd just reiterate what you said. We have 7 Section 8 units and have had great results. I believe the quality of the property does matter as we keep our properties up-to-date and similar to other properties in a middle-class neighborhood. I believe the author came across an inspector with a grudge or possibly his properties needed to be repaired. We've never had an inspection issue with any of our properties. I would advise to be careful who you rent to and look for tenants that plan on staying a long time.
    Marie Ryden Rental Property Investor
    Replied 2 months ago
    So I like your defense of section 8 tenants- I have a townhouse that is in the best neighborhood and am considering renting to section 8 tenents. Teach me the your methods!
    James Free Rental Property Investor from Fort Collins, CO
    Replied 2 months ago
    " section 8 is not a wealth transfer from taxpayers to "low income" individuals (what label would you use since your not politically correct?), it's a wealth transfer from tax payers to property owners." However sympathetic to Section 8 tenants you might be, this sentence is flat-out untrue. The property owner is not being given a gift. He is being paid rent in exchange for residence in his property. You might as well argue that every government employee or contractor's salary is a gift from the taxpayers, too, if you're going to ignore the product or service being provided in exchange for the compensation! No, it is the tenant who is getting the gift. He is getting the value of his rent and doing absolutely nothing in exchange for it. You are free to debate the merits of the program, but as the saying goes, you are entitled to your own opinions, but not your own facts.
    Ronald Bibb
    Replied 2 months ago
    Mr. Free, thank you for granting me freedom to debate the merits of the program, and by way of "the saying" entitling me to my own opinion. I did not know that questioning the necessity of making it a point to be politically incorrect when talking about section 8 tenants equated to being sympathetic, I simply said it was not necessary, but as the saying goes: you learn something new every day. If it's ok with you sir I'd like to argue that your government employee analogy is a false equivalency and reassert my premise that the section 8 program is a wealth transfer from tax payers to property owners. In your example, the employee is given a salary in the form of currency which can be spent as he or she pleases. I would agree with your analogy if the section 8 tenant were also given money and were free to use it as he or she pleases, but their "gift" is in the form of a voucher that can only be spent one way: with the landlord. And the idea that it is a "gift", to the degree that it is, furthers my point (in my opinion of course). Hopefully you would agree that a reliable method of determining who benefits in a financial transaction is to follow the money trail to it's end. You appear ok with following the trail to the tenant so can we take it one step further? If the voucher can only be used with the landlord then the tenant is, in effect, a pass through to the landlord. I never argued that the tenant did not benefit, my argument is that the ultimate benefit goes to the landlord, and that the tenant benefits in a way that is ancillary by comparison. Evidenced by the fact that I'd rather be me than them. I have no problems with this arrangement. I benefit directly, as well I should, for the risks that I have taken to build my business, the responsibilities I have, and the service I provide to the tenants. That does not, however, detract from the point that a portion of their rent comes from a tax payer and it given to me, i.e. the taxpayer's wealth is transferred to me. I agree that the landlord is being paid for residency in his property, however how well do you think that process would work in the property profile the author speaks of without the program? If it were not for section 8 vouchers what would happen to the values of those properties? The "working poor" (was that politically correct?) wouldn't be able to pay the rents that the government does. If the answer is that the values would go down, then can a case be made that propping them up through the government paying higher rents thus making those properties more desirably traded among investors than they otherwise would be and the landlord wealthy in the process is a wealth transfer from the tax payers to the landlord? And since you have no appetite for made up facts, your assertion that "he is getting the value of his rent" is not quite accurate. The tenant pays 30% of their income towards rent and the taxpayers pay the rest. In my portfolio I have tenants where housing pays the majority, and tenants where housing pays $25, it probably averages to housing paying roughly half across the board. Of course it could be that I'm just full of crap so I'd like to learn more from your perspective sir. Where have I brought in my own facts?
    Geraldo Holter from Chattanooga, TN
    Replied 2 months ago
    James free I wish we had a like button to like this twice.
    Ronald Bibb
    Replied 2 months ago
    Dear Mr. Holter, Why stop at two likes? Lets go for 5 or 10. Anything worth doing is worth doing right. No need to bother with thinking for ourselves, lets just go all in on following the crowd. Don't forget we're having a meeting at the pavilion tomorrow at 12 pm sharp. Make sure you get there early to get a seat cause we're serving cool aid!!! Be there or be square. Sincerely, Jim Jones
    Mike Mo Investor from Houston, Texas
    Replied 2 months ago
    Love it Ronald. I’m looking to start a small portion of section 8 and would love to connect Er and learn some of your tips/tricks for correct property criteria!
    Ronald Bibb
    Replied 2 months ago
    Sure Mike, I'd love to. Just messaged you.
    Tamika Jones
    Replied 2 months ago
    Well I am one of the many working a "good" job, but still low income individuals you are discussing. However, I was never on Section 8 because the wait list was so long. I ended up going into public housing. Granted I had a full time job with benefits, but I also was a single mother with a car note, insurance, day care and we still had to eat. No I didn't qualify for food stamps. Why did I live in public housing because rent a nice apartment in a decent location with two bed rooms was way more than I could afford. Yes I could have picked up another job and never saw my son. What kind of mother would I have been? My rent was paid on time every month, I had great credit and the apartment stayed clean. I went back home to my mom's after a year and a half due to crime. What can be done? I want to own properties and I want to help people who have been in my shoes. Any advice? Where are the conversations? Outside of the box thinking?
    Michelle Dhanda Property Manager from Dorchester, MA
    Replied 2 months ago
    Maybe find a friend or colleague who could pool resources with you. Also, I have seen some government deals for first time home buyers, if you thread that needle: work but don’t make too much. If you’re anywhere near Massachusetts, I know a couple of real estate agents who love finding that first home/investment for people who didn’t grow up owning a home or having a cushion of family wealth but instead had to pull themselves up the hard way.
    Julie Bergen from Alameda, California
    Replied 2 months ago
    Hi Tamika, I was curious about your question, I did find a list of a few organizations that offer home buying assistance grants for low to moderate income individuals: https://studentloanhero.com/featured/first-time-homebuyer-grants-programs/. Single moms are super-heros. I hope you can find a way into home ownership. Best of luck.
    Account Closed
    Replied 2 months ago
    The author is telling the truth. I have lost so much money on my section 8 rentals. The appeal of real estate investing is control, but sadly you lose control with these types of investments. I have personally found 3 major factors: 1- you are not only renting to tenants, the local (often abusive/corrupt) local government also has a stake in your property. They are always finding new repairs and threaten you with cutting off the rental income if you don’t comply. In my area I have an inspection once every 3 months as they manufacture new repairs to justify their existence. This is very expensive. 2- It is very difficult to find quality tenants in low income neighborhoods. Even if you manage to do this, you must realize you are renting to the extended family and hangers in too, e.g, the baby daddy, derelict uncle, etc who will all move into your property despite not being in the lease. 3- the residents in the surrounding area will vandalize your property and you will have to spend extra money on burglar alarms and other defensive measures. I once had a vacant apartment in a small quad and the local neighbors would break in so they could go there and drink, get high etc. We boarded it up to keep them out and they actually used a chain saw to break down the wood and break in. We had to rent a steel prison door to keep the degenerates out and this was very expensive. I have so many examples and could write a book. I found there is a lot of money generated but you don’t get to keep much of it due to the reasons above. I have one property left and set a goal to cash out by spring and invest in another area. It’s not worth it. One more thing, I have yet to find a decent Property Manager and now believe the quality of the tenants and local area has a direct impact on the quality of the property management you are able to obtain. Has anyone else found this to be the case?
    David Krulac from Mechanicsburg, Pennsylvania
    Replied 2 months ago
    Brian, This post, as well as your other posts is well thought out and full of valid points. I've been a section 8 LL for 30 years. but it is always a small portion of our rental business 10% or less of our rentals. 1. annual inspections... we've never had a $2,000 inspection bill, sometimes the inspection item is something like tenant has poor housekeeping, which is a tenant action item not the LL 2. eviction delays... we've never had section 8 delay an eviction 3.Initial rent delays... we have had some delays due to the initial Section 8 inspection prior to renting, but it has always been less than a month, and soemtimes as quick as less than a week. 4. financing challenges... Agreed its just as much work for the lender to lend $30,000 as $300,000, and obviously they want to lend more. But on the other hand the returns are higher for the LL also. We bought a 3 br house for $32,000 and rented for $950. We bought a 5 br house for $36,000 and rented for $1,250, and we bought a 4 br house for $55,000 and rented for $1,200. At the first example the tenants stayed for 3 years, second example the tenants stayed for 5 years and the last example the tenants stayed for 12 years. 5. low income tenants are greater risks.... agreed, but that applies to section 8 as well as non-section 8. Many tenants have no reserves, a hump in the road causes big problems. Old car needs a new transmission. Even tenants in higher priced rentals and neighborhoods have the same issues with poor budget techniques, poor purchase choices, debt and no reserves. That crosses economic lines. 6. lower end neigborhoods...agreed none or our rentals section 8 or non-section 8 are in the d neighborhoods, B- neighborhoods , but we do have one in an A property in an A neighborhood. 7. people call you slumlord... non-LL often call ANY LL a slumlord, they just don't know what they are talking about. Here's my musts: 1. most of our S-8 tenants have full time jobs, one was an LPN (nurse), another a state worker, another pre-school worker. All had children and they had low income. Other tenants were senior citizens, single with no dependents, and disabled people. 2. in all our rentals we look for people that are going to stay for a long time with no vacancy. we've had tenants stay 30+ years. and a Section 8 tenant stay 12 years. We just sold a house that the only tenant moved there in 1994 . They paid $289,400 and there was never a day of vacancy and never a late rent.
    John Underwood Investor from Greer, South Carolina
    Replied 2 months ago
    My experience with section 8 tenants has been great. I have never had to do an eviction. The inspections never result in more than $200 in repairs. My houses are in decent areas to good areas. Section 8 rent comes in like clockwork each and every month. Section 8 pays 110% of market rents in my area. My tenants are great and take care of my properties because they don't want to loose their free money. I would happily convert more of my properties to section 8. I don't like how long it takes to find a good section 8 applicant even though there are hundreds on the waiting list. I am very happy with the program and my section 8 tenants.
    Katherine Earle New to Real Estate from New Berlin, WI
    Replied 2 months ago
    I appreciate hearing your experience. I have had to deal with being in poverty all of my life and about to own my first rental soon. I, too, have a passion to help those who have experienced financial challenges and want to take a stab Sec 8 housing. I have heard many different opinions and I wonder if the differences relate to the areas and tenant screening techniques. I am moving from the Bay area in CA to Wisconsin. Will I buy a $2500 property in crime central of Milwaukee? No, but I see heading up north along the coast where they just make less money and don't experience nearly the same crime. We will see how my experience compares with yours and other experienced Sec 8 investors. Thanks again for the heads-up!
    Leon Howard from Merrillville ln
    Replied 2 months ago
    Everything you said in your article is so true!!
    Fahima Hilal Real Estate Agent from rutherford, New Jersey
    Replied 2 months ago
    Is the experience of renting out your property to Sec 8 tenants in a decent area different from actually buying the property in a low-income area and renting out to Sec 8? II think what Brian is saying is about having a property in a low-income neighborhood . Am I right ? Any comments , anybody?
    Catherine Richardson
    Replied 2 months ago
    So only children of Section 8 people damage properties? You want replies based on economics only b/c your article is plain and simple - discriminating. I have worked with so many affluent people that live like pigs and don't think making payments on time applies to them. If your experience is what you have written, you should just keep your comments to yourself.
    John Wigglesworth
    Replied 2 months ago
    He was right about one thing. He knew you were coming.
    Ronald Bibb
    Replied 2 months ago
    Yet he was wrong about just about everything else. What's your point?
    David Grabiner Investor from Chattanooga, TN
    Replied 2 months ago
    You have conflated section 8 with low income areas. You are correct Lower income areas are higher risk but the beauty of Section 8 is you can use it in any neighborhood. In fact in some more affluent zip codes you can get more from section 8 than you can from market rent. As far as evictions in Chattanooga there are no special steps to complete an eviction. We also only have i selections 0nce every 2 years and they have always been reasonable. For anyone interested I have done several videos about the pros and cons of Section 8. You can find them on my IG @diy_landord.
    Rick Hamell from Portland Oregon
    Replied 2 months ago
    Check your local laws though - my city does has rules in place that all landlords must accept Section 8 tenants.
    JC Cole from Baltimore, MD
    Replied 2 months ago
    Currently renting a property via Section 8. Rent is significantly higher than at normal rents in my area ($1575 vs $1100-$1200/month). The neighborhood is probably C-class, it has it’s rough areas, but the house is in a great, quiet area. You don’t need to do Section 8 in a terrible area, but use it strategically where it makes sense. Using a property manager who specializes in Section 8, so they are highly diligent in the areas you suggested in the article. Also have an HOA that polices the outside portion. Have had a great experience with it, may do it again if the right opportunity arises.
    Michele Emerick
    Replied 2 months ago
    We live in South Florida and in a nice neighborhood. One of the houses was a section 8. They were loud. My kids were afraid of their kids because they threw rocks at them. Sometimes there were 5 people living there and sometimes 10 or 12. I seriously hated it at the time because of the threat to my children and the law enforcement activity that was prevelent at that address. Now, however, as an investor I am grateful for that experience. I would rather sit on money than invest it in section 8 housing. Last night I was reading an article about the issues with high rent in this country pricing people out. I do feel badly for those who are trying really hard to better themselves, but this is America the land of opportunity. There is plenty of money to go around. You just have to educate yourself through books (reading or audio) and talking with others about how they made it. I read a quote one time that said, "Sometimes the best helping hand is the one at the end of your own arm." Thanks for the great article. Kept my attention until the end.
    Bryan Jones from Colorado Springs, CO
    Replied 2 months ago
    There is very good sense here and I appreciate the information provided. Pure numbers will show you that it can be incredibly hard to succeed in Section 8 housing. I believe location is a very large factor. As you predicted, the perpetually offended have surfaced to lambaste the article. Also, as you predicted, most can not cite statistics, only feelings. I do appreciate the detailed comments from those that have actually made it work and it is good to see that it can, in fact, work. What a difficult avenue to take.
    Ronald Bibb
    Replied 2 months ago
    Can you give experiential examples on how pure numbers will show you that it can be incredibly hard to succeed in section 8 housing or are you just saying that? Can you site the statistics for that in the manner you are requesting from people "lambasting" the article? I have 28 rental units in the DFW metroplex, 60% of my units are housing tenants. All of those units provide over a 20% cash-on-cash return (some as high as 50%), I've had one move-out this year and that was because the tenant's voucher was upgraded from a 2 bed to a 3 bed, I've evicted one section 8 tenant in 12 years and it took the same amount of time as all other evictions. I've never had a repair from an inspection cost 2K, they more average $200-$300 when you fail, and failure every year has been non-existent in my portfolio. I have some units that have not failed in 5+ years. How's that for statistics? Now where are yours? The author himself asks for statistics in responses while providing very little himself. The only real one he provides references 2K in inspection repairs every year and if that's true I'd say that speaks more to the properties he's buying rather than the section 8 program. And if he were renting those properties to non-section 8 tenants he'd be losing that amount or more through vacancies and loss of rents because non-housing tenants will just leave every year if the property has that many problems it's more of a case of six in one hand, half a dozen in the other but it certainly is not a result of the section 8 program.
    Stanley Furman
    Replied 2 months ago
    As a genetically-programmed "nice guy" and a landlord for over 40 years, I've learned a LOT of lessons. Trying to "give someone a break" and help them with THEIR problems has cost me over $50,000 in little pieces and has NEVER worked. EVER! Section 8 reduces self esteem, produces a sense of entitlement and reduces the tenant's desire to respect the property in which they reside. They don't respect themselves, don't respect their neighbors, and most certainly don't respect the landlord. This creates a dynamic where the emotional cost of any income derived exceeds the value of that income. Unfortunately, there are people who genuinely need assistance, but what I've seen is that upon receiving that assistance, their motivation to "pull themselves up by their bootstraps" is severely diminished. Their perspective on the landlord is that it is THE LANDLORD who is "sucking off the system", since it's much more comfortable to take out their self-loathing on the landlord than to see their reality for what it is. As others have said, the money is simply not worth the emotional and financial stress that comes with dealing with the majority of Section 8 recipients.
    Cece Jones
    Replied 2 months ago
    Well said. I think those blaming the author for choosing poorly haven’t come in contact with true scam artists or others that have had renters for over 10 years at a time. Totally different scenario. Also in FL, miami at least, the process and inspection IS a nightmare, unless your friend is the inspector (or often provided by the realtor who sold you the property or often a silent partner with the property management company). It is clear, as stated in comments that there is a huge disparity in regards to location. And I can’t stress this enough, having tenants for 10 plus years doesn’t even get you close to relating. And finally, again, blaming the author for failing to screen or maintain properties is an obvious misunderstanding of other markets. Being simply unable to imagine or empathize tells of one’s tunnel vision and lack of varied experience.
    Scott Smith Investor from Austin, Texas
    Replied 2 months ago
    Great article on Section 8. Started in lower income areas because the prices were low and the numbers were good (on paper). However, I had so many issues of things being stolen, broken into, tenants not paying, etc. I bought two properties section 8 with long term tenants. These two people I had in the property called me more than all of my other residents combined. I had one inspection where everything was fine (passed with no issues) then about 4 weeks later housing sent me another letter stating that I had to fix a list of things. Apparently the resident contacted them, complained about some items and stated they wanted to move. So, housing sent me that last letter. Once this and the other resident moved out I realized how many things they "expected" me to do for them on a continuous basis and decided it really wasn't worth the constant letters from housing and headaches. So, no more housing. In fact, I am getting out of rentals all together (except short term) and focusing on seller financing. Less repairs, better cash flow, helping people who work hard and save their money. Works better for me.
    Susan Maneck Investor from Jackson, Mississippi
    Replied 2 months ago
    I haven't had nearly the same the amount of problems you have had with section 8. I invest in working class neighborhoods in the south part of Jackson, MS where I also live (in the same neighborhood, I might add.) I have not had man
    Elisa Lowe Real Estate Agent from Columbus, OH
    Replied 2 months ago
    Love this!
    John Dennis Real Estate Agent from Woodland Hills, California
    Replied 2 months ago
    Realizing that everyone's experiences are slightly different, and dependant on the areas too, I personally have never had any issues with Section 8. In fact a lot of the time I completely forget about my LA Section 8 condo. It was a trial move maybe 6-7 years ago. I have had one tenant that whole time, she has never been late with the rent. I've only heard from her maybe two or three times over the years. The inspections have never been that bad, probably the max was a $200 repair, nothing at all for the last 3-4 years.
    Susan Maneck Investor from Jackson, Mississippi
    Replied 2 months ago
    Sorry, my post got away from me and for some reason it isn't allowing me to edit the original post even though I made it only a minute ago. I have not had the problems you have had with section 8 housing. The biggest headache I've seen is with the initial inspection awhile to schedule and it is not safe as you said, to leave houses empty in these neighborhoods. But follow-up inspections have not usually been a problem for me. Sometimes they want something done and sometimes they don't, but when they do the cost of the repairs is in the hundreds, not thousands. I can't tell you whether evictions are harder because I've never had to evict someone with a section 8 voucher. Other tenants, yes, but a Section 8 voucher is too hard to get to risk loosing it. I don't find they are any harder on my property than those without a voucher. As for financing, well I'm buying houses in the 15-40K range so usually pay cash and refinance later with a first-place HELOC from WF. The rents I get are between $675 and $900 a month. Currently I have only one tenant with a voucher. He is blind and she has lupus. Ironically she is the only one of my tenants with a credit score over 600!
    Derrick Jones from Moreno Valley, CA
    Replied 2 months ago
    Well written article and great points from those who have been there and done that. I'm a newbie so I am taken it all in at this point.
    Ky Trang Ho
    Replied 2 months ago
    Thank you for sharing your experience. I was considering taking Section 8 tenants again but after reading this I am going avoid it like the plague. My first three sets of tenants were all Section 8 and they made It the clown look like a cub scout leader. One time one of my Section 8 tenants, whom I’ll call Shelly, failed to pay rent for two months. When I evicted her, she sued me for wrongful eviction. She kept saying she paid the rent -- like the dog ate her homework. She had no proof because she paid her portion with money orders from Nix Check Cashing or the Post Office. Shelly got free legal representation from Neighborhood Legal Services while I had to pay a regular lawyer several hundred dollars an hour. I spent hours talking to Shelly hoping that a woman-to-woman talk could get her to drop her lawsuit. I even called numerous low-income housing buildings and non-profit agencies to find Shelly and her seven kids another place to live. Unfortunately, they were all full and had years-long waitlists. I had no idea we were on the brink of the housing crisis we see today. During the first court hearing, I had to compromise with Shelly by eating one month’s rent and letting her pay the other missing month’s rent in increments over the ensuing months. Otherwise, she would have insisted on having a jury trial, which would have cleaned me out. To my surprise, Shelly failed to live up to her end of the bargain. We went back to court a second time. And the judge gave her three months to move out. The deadline came and went. Shelly pulled a Mahatma Ghandi and refused to leave. The sheriff had to come lock her out and escort her family out of the building. In the end, there were no winners. Shelly and her seven kids lost a newly constructed home in a nice neighborhood while I was out the rent she owed plus the legal fees. I didn’t pursue her in small claims court, even though I could have easily sold the judgment to a collections agency. I didn’t want to exacerbate her problems. I also wanted to forget about the whole ordeal and move on. I just wanted to be liberated from all the negative energy.
    Justin Miller Investor from Mobile, Alabama
    Replied 2 months ago
    Section 8 is a niche. I’ve been in it for 5 years and have 14 properties of my 19 total are section 8. They are profitable, great cash flow and all on rather short term financing (less than 10 years) It’s not for everyone but it can be profitable. We are also getting better with out systems. It’s not as hands off but the return is great. My goal is to scale up and hire in house management. That’s really where you have to be with section 8 for it work as passive. It’s almost impossible to find good section 8 managers.
    Bernard Pearson from Teaneck, New Jersey
    Replied 2 months ago
    Thanks for the feedback it will help me as I will be venturing into Section 8 Land Lording. I too am starting out so do want to make this a small part of our overall portfolio and add in diversity in some B Grade neighborhoods also. GR8 post. I will be checking out your Website and master class also.. Eager to learn more.
    Imran Ahmed
    Replied 2 months ago
    never been a landlord but everything written makes total sense! Thanks for the valuable advice
    Ken Goodman Investor from Los Angeles, California
    Replied 2 months ago
    Two of our rental properties are Section 8 in Baltimore County, Maryland (not Baltimore City.) So far, we have had a very good experience. We screened the tenants very carefully and they are terrific. Never late with rent and they take good care of the properties. Working with the voucher program has been alot easier than I thought. Alot of forms in the beginning, but none of the horrible delays we were warned about. I can also add that we've had other rental properties that were not Section 8 that suffered awful expensive damage due to tenant negligence. It's all about selecting the right tenant.
    Andrea Palmer Rental Property Investor from 12804
    Replied 2 months ago
    I think there is something to be said about noting the difference between a Section 8 property, and a Section 8 tenant. I currently rent a very nice house, in a nice middle-class neighborhood, to a Section 8 tenant. She is a good tenant in that she keeps the property neat and clean. She notifies me promptly if something needs attention, and there have been very few repairs needed. She is light regarding wear and tear. She not a good tenant in that, if her portion of the rent increases due to her increased income, she is typically 5-7 days late on the rent. She pays in cash or a money order, and I am certain does not have any savings at all whatsoever, to weather a storm. One month she was a week late because her daughter's birthday had been that month. It's pretty clear she is one banana peel away from financial ruin. So far she's been with me for 3 years, and it's been going reasonably well. While renting to a Section 8 recipient is very risky, it's also not a guaranteed flop. On the other hand, I previously had a property that I rented to only full-time employed, vetted, self-pay cash tenants. The property itself was nice but in a run-down, nasty part of town. I could not, for the life of me, get good tenants. They appeared to be good on paper, with references, credit score and full time jobs. Then they quickly revealed themselves to be dirt bags. One tenant even sublet the property out--I saw my own property listed for rent on Craigslist and went over to find another person living there, with a pet. I unloaded.... err, I mean, SOLD, that property, asap. The Section 8 housing authority in my area is very helpful to landlords, and I have a good relationship with the director. I know this is not the case in all areas. I think it has a lot to do with the neighborhood you buy in, thoroughly vetting the tenants, and the quality of the Section 8 housing authority in your area. While every point in this article is valid, I still think there are some occasions when renting to a Section 8 tenant could be beneficial to a landlord.
    Elise Hazzard Property Manager from Saint Petersburg, FL
    Replied 2 months ago
    I read this as I sit in a city council meeting in st.petersburg,fl. The last agenda item, that many are here waiting for, is for a new Tenant Bill of Rights. that among other things, will REQUIRE landlords in the city to accept vouchers. Our properties are B- to A-. I have accepted one section 8 tenant in the past in IL- not a good outcome even w/ professional property manager. NO ONE I know who has ever voucher property has had a good outcome. Might be a case of small sample size (personally I know fewer than 100 investors personally,) but I agree with Brian 100%. I hear Dave Van Horn’s fund is closing soon...Hmmm.
    Darrell Hay
    Replied 2 months ago
    I agree 100%. I have had many many many S8 tenants over the years. There is a reason these people are on assistance. I got tired of dealing with it after a few years and refused them outright, until very early this year---my state outlaws refusing to take a tenant based on the source of their rental income. So now I am back to Drama, Delays, and Dirtbags
    Arun Varshney Investor from Fremont, California
    Replied 2 months ago
    Thanks Brian for sharing your experience. I own some with C class homes in Bay area, CA. I agree with many of your observations except that our annual inspections were not costly at all All landlords - even if you have different experience on section 8 problems, you should read the section after "If You Must Invest in Section 8 Rentals…" -- Best general rental advice ever! In general, investing in C or D areas is more work, less revenue per home, and higher risk but return is significantly better cash on cash or has much higher CAP rate. So you got to ask yourself - Do you want more money or do you want more free time
    John Lamb Rental Property Investor from Phoenix, AZ
    Replied 2 months ago
    I'm sure you can say the same thing about low income tenants just as you can about Section 8 tenants. I have a rental with a Section 8 tenant and she takes great care of the property. She actually is working to get off of the program so that she can purchase the home from me. I just had my annual inspection, and there was only one item the inspector noted, but stated it just needs to be fixed before the next annual inspection. So no rent was held back due to this. I have had some issues with the housing authority in getting the monthly portion of the rent sent on time or with the correct amount, but they have always corrected this within a few days. I look at Section 8 as a "checks and balance" for the tenant, as there is a big incentive for the tenant to take care of the property so that they can stay on the program. It's a win/win for both myself and the tenant.
    Michelle Dhanda Property Manager from Dorchester, MA
    Replied 2 months ago
    Point no. 6 is a nothing but dog whistle, and some of the comments here indicate that it was heard. Maybe your tenants are awful to you and call you a slumlord because that is what you are: an interloper with no ties to the community and no shared values, hoping to make a buck off of their suffering through *your* government handout (rent courtesy of the government). In Massachusetts, thank God, it is unlawful to refuse to accept Section 8 - anywhere, not just in the “lower end” neighborhoods. Stay classy, Bigger Pockets.
    Winslow NA
    Replied 2 months ago
    The government (taxpayers) is the one providing the money to pay for the landlord's services, in lieu of the tenant. So it's not handouts from the government to the landlord. Doubt you're a landlord, but if you are, most landlords I know aren't trying to make a buck off someone's suffering, they're providing a service communities desperately need, and the tenants want in return. If they didn't want it, they could buy their own house, or move/rent somewhere cheaper (which always exists). Overall, your comment is extremely condescending, misinformed, and comes off, frankly, as trolling. You should consider writing for the Huffington Post.
    Joseph Johnson
    Replied 2 months ago
    Michelle, If we could all be half as morally righteous as you think you are, this would truly be heaven on Earth.
    Anna Markowski Investor from Chicago, Illinois
    Replied 2 months ago
    We don’t need more junk posts like this in the world. Become a better manager and you won’t have most issues you are listing. My section 8 tenants are my best tenants. They are ultra respectful and keep the cleanest units. I have to say, this probably has something to do with being treated kindly and equally and responding in kind. Only issues I’ve ever had with section 8 are with the agencies running them. For that reason, it’s best to keep your portfolio diversified. A government shutdown can’t mean I don’t pay my mortgage. But that’s literally my only issue. Best tenants I’ve had. My high credit score/high income childless tenants end up with far more issues, and I wonder if it’s because subconsciously we are letting thing slide because they are more like us... Tune up your screening processes.
    Colin March Rental Property Investor from Portland, ME
    Replied 2 months ago
    Brian, your posts are usually great but this one was a bit weird. A few points: --I've never received a bill from an annual inspection. I've had inspectors point out things that needed improvement that I actually didn't know about and was happy to fix. I generally take pride in keeping very nice units. Also, those inspections also protect you in case a tenant tries to claim you provided sub-standard housing. --Never experienced any of the delays you speak of. It's always been easy to bring section 8 tenants into a unit and I've never had to evict one but I know that I could in a matter of weeks if needed. --Poor credit is relative. They are paying 30% of their income on rent. Many of my market based tenants pay more than that so actually my section 8 tenants default at a lower rate. And 80% is direct deposit into my account on the 1st of the month like clock work. --"Lower-end neighborhoods" is apples and oranges. You know section 8 vouchers can be used anywhere, right? I have buildings in solidly middle class neighborhoods with zero crime and happen to have a unit with a section 8 tenant. Big deal. No one in the building realizes the 80 year disabled lady pays part of her rent with a voucher. --I don't understand your slumlord comment at all. First of all, who cares what other people say. Secondly, no one will call you a slumlord if you provide decent housing on decent terms. Lastly, let's all think about our "why" with regards to how and why we invest. I personally take pride in providing good housing units to all types of people. I have taken section 8 vouchers from wounded Iraq vets, single moms, etc and I take pride in that. Let's chill a bit with the holier than thou elitism.
    Steve Vaughan Rental Property Investor from East Wenatchee, WA
    Replied 2 months ago
    I've had a good experience with S8. 20% or so of my portfolio for 16 years. But I have a good local office to work with and a reasonable inspector whose been doing it for 29 years. Ive never had to pay more than a few bucks for a new socket. Screen like you would anybody. I don't do smokers or substance abuse. My older single dudes stay for years and years. We needed another 7 reasons to don't do section 8 article like we need another 7 reasons to screen your tenants article. Duh. No, this is worse. Spreading fear about already fragile niches does real harm. I realize this is about hood properties also, but coupling Don't Do and Section 8 in the clicky title spreads wuickly. Well-written, but I feel your talents could be better utilized elsewhere, Brian.
    Lisa Luscan
    Replied 2 months ago
    A courageous and excellent article. Well done. The comments were a fun read too.
    Byrne McKenna Rental Property Investor from Evergreen, CO
    Replied 2 months ago
    I am a niche and unique Sect 8 LL. I got started buying two duplexes from public housing 10 years ago in a nice suburb of Denver. One I still own has both families still living there... more than 15 years each. One of those families recently earned their way out of the voucher and pay privately and the other went from 100% to 50% subsidy. All my other investments were nicer town homes where the HOA pays most utilities. I remodeled all to be hardwood cabinets, floors, and even granite counter tops. All of my tenants came out of Denver schools where graduation rates are in the low 50's. They moved to nice suburbs where graduation rates are as high as 98% and crime is extremely low. When the inspectors come, they know me and they love me. They give me tips on how to increase my business, not penalize me. This works well when rents have doubled in the last ten years and there is NO issue to deliver the rent increase and of course rents are direct deposit on the 1st. The lowest quality unit I bought was a low rise condo that I am now selling. The irony is that it was the best single investment I ever made - you can get max HUD rent - but was the most time intensive where the environment is apartment like. Some of what you say resonates. This is not for everyone. Have a good strategy - understand that the Housing Choice Voucher was intended to move poor people out of the inner city to nice suburbs and they can pay competitive rates. Treat them with decent housing, treat them like customers and partners and you will have decades of reliable income. You will never have an eviction when you are the best landlord they ever met. That starts with good screening and a zero tolerance on a criminal report. Good luck with your investments!
    Rick Klopp
    Replied 2 months ago
    As I expected to see in the comments - landlords taking up a position on each side primarily due to their own personal experiences. Unfortunately, there is no financial tool or algorithm to make a go / no go decision regarding Section 8. For what it’s worth, let me summarize my experience. Simply put, I would much rather have S8 properties than any other. Your mileage may vary.
    Sam Focarino
    Replied 2 months ago
    I purchased a building with a sec-8 tenant and she has not paid me her share of the rent for a year now. Why? She hates me. I have done nothing other than to ask for the rent. So, yes its costing me almost $3000 a year. As landlords we need to STOP renting to sec-8 so there will be an incentive for the system to change. They have they full force and power of the city behind them and think they can do anything they want and get away with it. And they do. As for me I would rather die than rent to a section 8 person in my lifetime. Yes there are nice sec 8 people. I meet them when I need to go to the section 8 office. But this one, mine is the devil incarnate.
    Roy Johnson Property Inspector - Commercial
    Replied 2 months ago
    My opinion, you are a slum landlord. You purchased for price and in bad locations to begin with. Go to city data can get all demgraphic info you need down to neighborhood. Few of your complaint were against inspectlo rd. They have a puncb listh. Your complaining about maintance issues. The condensing unit out of the cage once again not the tenant. You fail to mention every two years gov pays to fix all damages. Where else do you get that. At prices yoh purchased, not in ca lots of states landlod friendly. Even states as wa which are tenant friendly 35 days sheriff is there to excort off property. You. Have same time section i or not. Sounds to me you need to do a better job of screening section i or not.
    Tyrell Perry Rental Property Investor from Cleveland, OH
    Replied 2 months ago
    You mentioned "every two years gov pays to fix all damages." Please elaborate. Thanks.
    Jeffrey Russo Investor from Thomaston, Connecticut
    Replied 2 months ago
    Great article, well written.
    Stephen Davis Real Estate Investor from ann arbor, Michigan
    Replied 2 months ago
    As a 20 year landlord who has rented to over 15 sect 8 tenants and modeled the ROI in those tenants vs non sect 8 tenants, I agree. I never minded the additional paperwork or annual inspections. Generally, they fairly represented property conditions. Notwithstanding how tough it is to get a housing voucher, most of my section 8 tenants violated occupancy limits and did a poor job of maintaining the property. How does a stove or fridge get that mucked up? You have to work at that level of slovenliness....
    Michael King Rental Property Investor from St. Louis, MO
    Replied 2 months ago
    This is a great article with some great contrarian view points, and could not have come at a better time! I am considering getting into lower income housing; and have just spent 6 hours driving around St. Louis and surrounds looking. All of the houses I looked at had had the AC stolen. While this article hasn't completely convinced me to avoid S.8 tenants, I'm wondering if the lower income neighborhoods are for me. I think that ultimately your tenant is only as good as the screening process, and you can have crummy ones from all walks of life.
    Donna Hutchinson
    Replied 2 months ago
    @Ronald Bibb All I can say after reading this article is well said. I have a section 8 rental and have had no problems thus far. To be frank, I rented to a non-section 8 tenant previously and had to evict her 3 1/2 months after she moved in. In that short amount of time, she managed to tear up the place . So I don't necessarily agree with this article. I feel if you are seeking properties in neighborhoods that are suspect, then you should expect issues as exactly what you described. That's common sense. Kudos to those who expressed on this thread the desire and willingness to want to help people because not all section 8 tenants are bad.
    Dave Mason from Arvada, Colorado
    Replied 2 months ago
    Years of low end rentals, been down that road, never again! Not on my back or with my resources. Significant rehab investments, offering a home I would live in. I enjoyed all of the negatives from each of my Colorado properties, but I expected as much. The final nail was the government agency witholding their payment for 60 days. The claim was they did not have a copy of the lease. I mailed it several times. I finally hand delivered it 150 mile round trip. 2 weeks later I was paid. I realized a 3 day notice pay or quit would have solved the issue. The tenant was current with her $40 per month payment at the time. Within 6 months I did have to evict her for nonpayment plus $1000 in damages. Won the suit collected the damages eventually. She moved into her boyfriends home across the street to continue as a nightmare. Receiving voucher payments despite the agency's rules a tenant currently in default was not allowed assitance until cured. Solved the rental issue with an owner carry back, doubling my investment plus great interest for year and a half. Real estate has been very kind to my bank account and the education is never ending. Enjoy!
    Donna Hutchinson
    Replied 2 months ago
    Also @ Colin March, Anna Markowski, Michelle Dhanda Couldn't have said it better myself...
    Winnie Mullins Rental Property Investor from Jersey City, New Jersey
    Replied 2 months ago
    I have lived in a 2 family for the last 20 years and the two tenants we’ve rented to in that time were both Section 8 recipients. The first was here for a year and a half before she purchased her own home. The 2nd has been here since 2002 and has become like family. We currently own 2 SFRs in quiet areas of C neighborhoods (1 an hour away, the other 2 hours away) and rent to Section 8 tenants. Happy to say that we have had no issues with our current tenants. We did have to evict one 2 years ago but the process went smoothly. She was our mistake because we didn’t properly screen her prior to signing the lease and allowing her to move in. Having been born and raised in the inner city, I know that there are good respectable people that live in C neighborhoods, just as there are nasty idiots who live in better neighborhoods. I believe that one of the keys for good landlord tenant relationships with Sec 8 tenants is screening, screening, screening, providing a nice unit that is good enough for me to live in, and of course and treating that tenant like I would someone making $80k a year...with respect. Just because someone is a section 8 recipient does not mean they’re illiterate, nasty, ignorant, or have unruly children. Screen, screen, screen.
    Tyrell Perry Rental Property Investor from Cleveland, OH
    Replied 2 months ago
    They're not all bad but when they are, it's worse than reality TV. Unfortunately, many of your points are valid. The Section 8 system will require a significant overhaul in the near future to remain in existence. I am greatly annoyed with the timing in which it takes to schedule an inspection, the nitpicking over minor issues such as the presence of a basement cobweb and trying to short change the offer rent when the inspection cites a laundry list of items to be cured. Then you have the ungrateful tenants who were once desperate and begged for an opportunity when they were homeless or living in a shelter. It'll be these same individuals who will do an about face and become a menace to your unit, your property and your mind. Constant complaints from issues caused by them and attempts to not pay $100 in rent. Housing in America is too high for that nonsense. If the apartment isn't worth $100 (I'm sure there are dwellings that fit the bill), the tenant needs to be scheduling a special inspection ASAP and looking for housing alternatives instead of hunkering down and attempting to live rent free. Some of the problematic tenants do get better with time but its definitely not an overnight scenario. With that being said, clockwork rent deposits before the 5th and painless Section 8 tenants provides upside to the program. Cheers to all who have been successful in navigating the Section 8 monster.
    Long Nguyen Rental Property Investor from fresno
    Replied 2 months ago
    so if you get a property manager to deal with your section 8 tenants. Would that help or not?
    Cece Jones
    Replied 2 months ago
    Ok so first off. Motherf*cking thank you. I’ve not bothered to even read the comments, mostly bc I was so excited to comment. So, let me start by saying I live in Miami. The Mecca or scam and scumbags alike. Renting is not only dangerous for the landlord but also the tenant (let’s create a word ‘rentee’). I had a neighbor during the crisis back in ‘09 that was renting. Old lady and her grandson, slash drug dealer. Whatever, my spouse had purchased the home during the boom and we were grossly underwater. So I was stuck there in a yucky neighborhood. Anywho, so one day I’m walking toward my door (I’m in a townhouse and I could almost reach over and touch my neighbors door) and I see a guy like almost breaking in, as it seemed. I’m like what the hell are you doing. He says he’s there to change the locks as per the bank as it was officially in foreclosure. But he was dressed in normal clothes so I was like show me some paper work and let me get the old lady out here. So he was polite and probably used to this and walked over and showed some legit looking papers. The poor old lady is obviously taken by surprise and calls the cops, which the lock changer was understandably used to as well. Anyway very long story short, the story of the landlord pocketing the money and disappearing was prevalent. And seen often. During the crisis our townhouses went down to $49k!! From $200k!! So it was a great time for investors. To this day, I see people in and out of properties. I had always assumed moving would be so costly, first, last, deposit and the cost of moving itself. But then it was explained that the process to evict is both timely and costly. So they end up living several months free I guess and move on to the next one? (Anyone-feel free to elaborate). And yes, being that my neighborhood sucked for years, i saw first hand how BOTH the landlord and tenants destroyed the properties. And still do today. Along with the steady turn over. So yeah, in most cases you ARE 100% true and frankly speaking based on your own experience, so that alone validates your views. I’ve wanted to rent my home so bad especially bc we’ve increased in value and quality of persons in the area. I’m also moving and would like to build a property portfolio, despite being in a sellers market. It wouldn’t cost me anything. Or would it? My mortgage is about $1500, I could rent for $1600 maybe more. But for sure $1600. It would let me hold on to the property while it will likely increase in value. But what would I do if they stop paying? Being in Miami, we laugh at paws and protocol and the thought process works both ways. I’ve always fantasized about throwing a renter out and making THEM take me to court lol. But being across the country would complicate my wicked idea. Anyway, badass article. No need to apologize. Can’t wait to read more.
    Gordon Olson
    Replied 2 months ago
    As a new investor I had considered buying rental properties in the City of Minneapolis proper. But upon further investigation I discovered the recent changes in regulations regarding Section 8 tenants there. I should interject that I don't like the idea of government telling me what I can do with my properties in the 1st place. AT ALL. So the idea that I should be told what qualifications I can or can't use to choose reliable tenants has completely turned me off to buying any properties there. I'm already just trying to learn about being a landlord. I don't need the additional hassles government regulation brings. In my opinion anyone ELSE that says I'm not providing an opportunity for others is HIGHLY most likely not a business owner themselves. Running a business that loses money is not a business. It's not even a good charity. You sure won't be doing it for long. More power though to the current landlords of Minneapolis properties. I'm willing to pay a little more for the outlying suburbs for higher property values with less crime and newer properties at that.
    Adam Purden
    Replied 2 months ago
    I must preface I live in Los Angeles, CA. Some good tips in this article, but I haven't experienced the tragedies within section 8 that this article describes. I've had a section 8 tenant now for about 7 years and my annual inspection only recommended one small repair over these seven years, and the inspector is a different person every year, so I disagree with point #1. My neighbor also has two section 8 properties and has had very little issues with the same. I agree that getting a sizable security deposit up front is a must, as I must agree that my tenant has created some work for me to do, if she ever decides to leave, but I would estimate these costs somewhere in the $1,000 range, where my security deposit was only $800. However, I'm not too worried about this, as she's lived there for 7 years and I'm keeping the rent competitive to hopefully keep her in place. Yes, it's annoying to get calls every once in a while about issues I consider to be not worth my while, but that's part of being a landlord. I've also gotten inquiries from people on section 8 for my mid-to-higher-end properties where rents run $3200/month, so section 8 doesn't strictly apply to lower-end properties.
    Michael Slockers Real Estate Entrepreneur from Owasso, Oklahoma
    Replied 2 months ago
    This whole article is balderdash. And I've actually never even used that word before. A similar article could be written for the five primary reasons Section 8 properties can be a win for landlords. Section 8 properties, inspections, and tenants are not perfect. But let's not pretend that high-end rentals are headache-free, nor are C-class, B-class, cash tenants, etc. Rental properties take work, they are not purely passive. My Section 8 properties are some of my FAVORITES!!!
    Eric Zwick Flipper from Allentown, Pennsylvania
    Replied 2 months ago
    Realty check for Newbies or good hearted LLs buying in depressed neighborhoods. I have 2 current Sect 8 tenants who respect my properties and have been with me for 5 years. I screened them very strictly and do safety checks for access every 6 months. Very clean and respectful . The previous Section 8 was nicknamed Black Demon. Cause she had the entitlement attitude and would never let us in to do repairs then hold rent in escrow til court. My former property manger put her in. Now I screen and if Housing Authority is too slow il pull the property off availability. We have a very fair inspector who also owns properties. Just must be cautious and nip a problem early
    Hassan Washington Residential Real Estate Broker
    Replied 2 months ago
    I see that there are a lot of individuals against Section 8 but as a former employee Of HUD and a Licensed Real Estate Broker you may want to be really careful denying people just because of there vouchers. You can find yourself in some hot water some state have laws that are against this very thing. Review this pdf. and if your state is not listed check with your state. http://nhlp.org/files/03%20NHLP_Bull_NovDec08_source%20of%20income%20defense.pdf
    Michelle Dhanda Property Manager from Dorchester, MA
    Replied about 2 months ago
    I know, right? It's like the bad old days of steering and redlining never happened with many here. Even the conversation about the value of different neighborhoods has a racial component to it. And if the law does not scare anyone, how about looking and acting exactly like the real estate developers of the last century that helped create the racialized segregation in housing we have today?
    Erica Berry New to Real Estate from Georgia
    Replied 2 months ago
    Hi, This was a GREAT read. I am new to investing. My partners and I recently sold our first investment property. It was the BEST feeling ever. However, I wasn't always able to invest. As matter of fact I didn't even think it was possible for me to be able to make it happen. My situation was something I had to dig myself out of because of a bad relationship. So I became a tenant in high crime, low income area. And back then I would have loved to benefit from the S8 program. But list was so long and I never seemed to get called. Maybe if I did It might not have taken me so long to get where I am now. I was that good person who made a bad decision. I never indulge in the street life (no addictions of ANY kind ) but I chose a bad relationship that lead to my life challenges. So I am GLAD to hear some of you LLs stand up for the less fortunate. Everyone's situation ain't the same so just like you screen non-S8 tenants, I would think you do same here. For me, I might be a little skeptical about renting to a single mother of 7 unless I'm up for the challenge. Because in my mind I know there maybe some issues. So at that point I would ask, who made a bad decision here, the tenant and her issues, if any or the LL who chose to take on the responsibility? Pick and choose our battles, but don't blame everyone for one or two bad apples because there are just as many High Class, Nasty, Dirty, and manipulative tenants as well. There really are good people in unfortunate situations. Anyway, This does not deter me from S8 just helps me to understand the pros and cons and how I will handle it If I CHOOSE to go that route in the future. .. ... Thanks. Very informative
    Trina Scott from Dallas, Texas
    Replied 2 months ago
    I was on S8 through Undergrad to Grad. I worked for the Housing Authority for to General Counsel prior to. I had to first educate the coordinator for the region that single people can also qualify for S8. Next, I had to educate my future landlord how to perform Due Diligence on potential S8 renters. Yes, there are way more negatives to S8 rentals/renters as mentioned in the article and comments. What my landlord learned in the end. If you present nice properties, implement a laundry list, and adhere to to this. A S8 tenant can improve your property. When I returned home, I got my Realtors licence as a result of his influence. And he calls at least twice a year to tell me that I remain his best tenant ever!
    Ben W. Investor from Cincinnati, Ohio
    Replied about 2 months ago
    Ron, a vote for you. I am not going to write a book (yet) in support of your views. I do hear where the author and many others come from. We have had the same and more experiences as we own over 125 units (mostly SFR). BUT, I encourage all investors to develop a strategy and then build expertise. Maybe it is just one swim lane or maybe the whole pool. We have built a very nice expertise in low to moderate income housing. We are not slumlords. We have built rules around our acquisition criteria and for our ongoing property management (we manage for our own account (use of a good PM software system has helped us)). Like some, we started out investing in less expensive properties because we did not have the capital to invest in more expensive properties. We quickly developed a knowledge of certain markets and went from there. We have 10% Section 8 and many have been with us over 5 years. We have had market rate tenants who had decent jobs skip out on us. We have had properties nearly fully gutted from vandalism. Our lessons learned: review your rules; add new ones; determine what we missed. Never invest more than you can risk losing (stock market analogy). Our returns are very strong but it is because we treat this like a business and not a hobby; otherwise, it would pay us like a hobby. Being a landlord is a people business. My former Chief Operations Officer is now "Former" because he finally admitted that he did not like dealing with tenants and city inspectors. He therefore started to let things slip and put vacancies started to creep. ALL housing has the same codes. Good tenants will look for good landlords. Good tenants will also provide good referrals. Keep up with your properties, determine if a tenant needs to be on probation for the 1st few months (just like in a job) and dont assume anything. We have a very honest conversation with our applicants on the front end of screening, at move in and then at the end of month three. If you want mailbox money, SFR may not be it. But we are not getting these returns in the few commercial properties we have. Bottom line: you have choices. Do what you can control. Seek guidance. Keep learning. Be willing to change.
    Ben W. Investor from Cincinnati, Ohio
    Replied about 2 months ago
    Brian, I will state that you have very strong points and DO make a very good case. I vote the other way because I do believe that not all low income investing is classified in the same basket and that there are opportunities for us capitalists to benefit in some of these markets. Think this way: how do we lift everyone up? By creating stability. In housing. In education opportunities. It takes many of us. Decide what lane you want to swim in. Make all our communities better than when you started.
    Tracy Cousin
    Replied about 2 months ago
    My brother, thank you for having the guts to speak the truth! I, myself have been called insensitive because I don’t “sugar coat “ the truth but I realize that the society that we live in is not grounded in truth, but built on lies. So thank you sir
    Lori Buckner
    Replied about 2 months ago
    Having rented Section 8 in Chicago, it is not always as bad as the article makes it sound. Vetting your tenants is KEY! I have not had any bad experiences. I think the key to that is that in Chicago, we have what is called Opportunity Areas. These are areas where the crime is less than 2% of the population in that neighborhood, and Chicago is trying to create mixed-income neighborhoods (which already exists since Chicago is a truly diverse city), by allowing you to turn your home/rental into Section 8. These areas are very nice, exclusive neighborhoods, so the rentals reflect the neighborhoods where homes sell from a low of $280,000+ and up. So different areas have different Section 8 opportunities. So not all Section 8 is bad. Btw, who stated that the comments should be fun? Ha! When you are speaking of low-income families, the conversation is never fun. Wrong choice of words....