Landlording & Rental Properties

Should You Accept Section 8 Tenants? Take a Look at the Pros and Cons!

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Section 8 is a rental subsidy program funded by The Department of Urban Housing and Development (HUD) and run by local public housing agencies. In other words, Section 8 will help pay all or some of a tenant’s rent. Section 8 is available to low-income, elderly, and disabled tenants to help pay their rent and utilities. According to the HUD’s website, in order to qualify for Section 8, the applicant’s combined total family income cannot exceed 50 percent of the average income for the area, and over 75 percent of vouchers go to applicants whose income is 30 percent below the average income for the area.

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Additionally, Section 8 requires that properties be held to certain HUD-approved standards, and all Section 8 rentals must be inspected before the landlord can receive money from the Section 8 program. Most of these requirements are common sense things that you shouldn't have a problem making sure your properties have, such as windows that open, heat, ventilation in the bathroom, and more. Furthermore, Section 8 defines the maximum amount of rent they will pay based on bedroom, which can be both good and bad, depending on what they define for your area. In our area, Section 8 pays almost $100 more per month over what we can get from other non-Section 8 tenants, which provides added incentive to take the Section 8 Program.

Related: 8 Myths About Section 8, Corrected: Here’s the Profitable Truth

So should you accept Section 8? Let’s look at some of the pros and cons to help you decide.


Pros of Section 8:

1. You’ll generally not need to worry about the Section 8 paid portion of the rent being late, as it comes directly from the local public housing agency every month.

2. Tenants must meet and adhere to certain requirements of the Section 8 program or potentially be faced with being dropped from the program. For example, one of the expectations is that the tenant complies with the terms in their lease.

3. Housing Authority will conduct annual inspections of the unit, making sure the tenant is not destroying the property.

Cons of Section 8:

1. In order for the rental to qualify for Section 8 tenants, the unit must be inspected by the local public housing agency and meet the program’s standards for habitability on an annual basis. We listed this as a “con” since it requires that the landlord adhere to the government’s standard of habitability, not their own. It’s not necessarily a bad thing, just something to keep in mind.

2. If the landlord presents a nice, clean, habitable home that meets all Section 8 requirements, then the tenant allows the home to fall into disrepair by not caring for it properly or failing to report maintenance issues, not only is that a problem in and of itself for the landlord, but it can also lead to the tenant being dropped from the program. This means no income, no rent, and no reimbursement for forthcoming damages.

Related: Should I Accept Section 8 Tenants — Or Run the Other Way?

3. Even though the tenant must meet the Section 8 program’s guidelines to keep their Section 8 status, there is no guarantee they will, once again resulting in being dropped from the program and leaving the landlord with a tenant who can’t afford the rent.

4. Finally, in our experience, Section 8 tenants can be more difficult to manage than their unsubsidized counterparts. We’ve typically found that Section 8 tenants cause more damage to the property and often allow more garbage and junk to pile up than our other tenants. Perhaps this is due to the fact that (in their mind) they aren’t financially responsible for what happens, or perhaps it’s simply a correlation between low-income tenants and cleanliness. But whatever the reasons, whether financial or socio-economic, Section 8 tenants are often harder on a property, which is the number one reason why we don’t jump to rent to Section 8 unless a weak rental market makes it advantageous.

rent to section 8

We have had both good and bad experiences with Section 8 tenants. One bad experience we had with Section 8 involved an inherited tenant (they were in the rental when we purchased it), and it was really bad. We'll spare you all the dirty details, but it went from bad to worse very quickly and ended in a long, drawn out eviction, a house full of cockroaches, a death threat, and a few thousand dollars in rehab costs—plus months of lost rent! This situation could probably have been avoided altogether had the property manager who placed the tenant screened correctly, but that's one of the risks you take when buying properties with existing tenants.

Just because a tenant is on Section 8 doesn’t automatically make them a good or bad tenant. It’s up to the landlord to screen every applicant correctly and thoroughly and only accept those who meet their minimum standards. If you do decide to accept Section 8 in your rentals, you will need to be sure all applicants meet all your other criteria, including rental references (do they abide by the terms of the lease, do they have good housekeeping habits, are they all-around good tenants?), credit (do they pay their bills?), background (do they obey the law?), and any other criteria you have for your rental.

[This excerpt was taken from The Book on Managing Rental Properties, which gives investors valuable information on everything from screening tenants to managing everyday issues — and everything else you need to know for successful buy and hold investing.]

What are your thoughts on Section 8?

Let me know with a comment!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He is a nationally recognized leader in the real estate education space and has tau...
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    Jason Garder Flipper from Oklahoma City, Oklahoma
    Replied almost 4 years ago
    Brandon – thanks for the article. When screening potential tenants for Section 8 do you lower your qualifications/automatic disqualifications when it comes to credit score, income, etc?
    Justin Jocewicz Investor from Royal Palm Beach, Florida
    Replied almost 4 years ago
    I have the same criteria for a property no matter what. This is the best way to avoid any accusations. Be upfront on the phone, or via email or text and of course, in your ad. First come that meets the requirements is offered housing, has 24 hours to sign a lease with money, if not, it’s on to the next. Just my .02.
    Alex Saleeby Specialist from Beaumont, TX
    Replied almost 4 years ago
    Replied almost 4 years ago
    Be aware that in some jurisdictions is it illegal to refuse to rent to someone because they receive Section 8 or other rental assistance. As always, know your local laws.
    Melody Platt Wholesaler from Desert Hot Springs, California
    Replied almost 4 years ago
    My problem with Section 8 is how many people they allow in the unit. I think I remember they allowed 3 per bedroom. (Los Angeles county). That means 6 in a 2 bedroom- that’s a lot of showers! Then the place falls aprt and presto- you’re a slumlord
    Cynthia Gillespie Investor from Seabrook, Texas
    Replied almost 4 years ago
    Have been accepting section 8 since we started real estate investing in 2000. Have had way more good tenants than bad ones. They also tend to stay longer.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied almost 4 years ago
    Our thoughts on Section 8 is that the tenant would have to be approved by our normal standards, other than income, or we decline. Although that being said, we had to stop using Kansas City Section 8 because they are just so slow and hard to work with.
    Account Closed Rental Property Investor from Johnstown, PA
    Replied almost 4 years ago
    Contrary to public opinion, violations of the lease by a Section 8 tenant DOES NOT result in automatic loss of Section 8 status for the tenant UNLESS the landlord evicts the tenant through the judicial process (local magistrate). The Section 8 office will tell you that the lease is between you and the tenant; they only pay the rent. If there is a lease violation it is the responsibility of the landlord to act to correct the issue or evict the tenant, but eviction must go through the judicial process in order for the tenant to be disqualified from the Section 8 program (for up to five years). Inspections can also be a challenge. Doors and windows must operate as designed, with security latches and everything functioning properly. Inside doors must latch also, even if they are only for a closet. For electrical issues, recent national electrical code must be followed. Any electrical outlet within 6 feet of a water source must be a GFCI. (And you must have an outlet in the bathroom). If you have non-grounded three-prong outlets, they won’t pass either. (Our local inspector encourages us to change the three-prong non-grounded receptacles to the old two-prong style, which I find ridiculous, because then the tenant then has to use the three-to-two adapters.) Smoke detectors and carbon monoxide detectors must be in every bedroom and common areas, altogether adding great costs to your rental. And each floor requires one fire extinguisher now. Plumbing code must be followed also; no lead lines, no drips, handles must shut off water and toilets must not run or leak. Tubs can not have mold or mildew growth. And let’s not forget outside: shingles can not be loose, curling or even in poor condition (subjective). No peeling paint outside either: if you are renting one side of a duplex via Section 8, the roof and paint on BOTH sides must meet this standard. Inspections can test every bit of your patience. Section 8 tenants need to be managed by a qualified landlord just like non-Section 8 tenants: being in a government-sponsored program won’t get people to behave if they choose to act like heathens. Finding and keeping good tenants is the primary role of the qualified landlord; failing to perform this function correctly will lead to disaster regardless who is paying the rent. One more thing: your unit must pass inspection prior to the tenant moving in. Sometimes this can cost you quite a bit and significant work to do these things, but you do it. Section 8 will also require you to prove that all real estate taxes are paid up, and that all municipal utilities are working and paid up BEFORE the tenant moves in. You figure, wow that’s strict, but I’ll have some protection, right? WRONG! At the end of the year, when you decide not to rent to the tenant again, and you inform Section 8, you might think the Section 8 office would verify that the tenant has paid up all the utilities prior to giving them a new voucher for the next place, right? No! You might think the Section 8 office is going to inspect the property-the one you worked long and hard and spent money to meet their standards-prior to the tenant moving out and getting a voucher for the next place, right? WRONG! The Section 8 program places great requirements on the landlord at the outset (and periodically if the contract is re-newed) but never places this same burden on the tenant. They simply let the tenant move on and you get stuck with the unpaid water and sewer bills and their junk left in your unit. Be sure to take a lot of pictures before you rent and after the tenant moves out, just as you should for any tenant. Also, if the utilities aren’t paid in full each month, you may have to threaten to evict them to get them to pay their bills. Be sure the Section 8 tenant pays their utilities each month in full. The Section 8 office leaves you with ALL the responsibility, so don’t expect anything but a rent check from them. I will never understand how a government-run program can give a taxpayer-supported voucher to a tenant who left behind a mess of junk and unpaid utility bills for a landlord: to me, that is the number one reason landlords don’t want to participate in the program. In the end, the landlord gets screwed by the tenant AND Uncle Sam.
    Lloyd Stanton Real Estate Investor from Shelton, WA
    Replied almost 4 years ago
    What likely started as a legitimate social safety net for those unable to provide for themselves has morphed into an absolutely disgusting and gross abuse of taxpayer dollars. The Section 8 program (your tax dollars) will not only pay rent, but will allow you to BUY a house AND PAY FOR the following: Monthly homeownership expenses include: 1. Mortgage principal and interest, 2. Mortgage insurance premium, 3. Real estate taxes and homeowner insurance, 4. PHA allowance for utilities, 5. PHA allowance for routine maintenance costs, 6. PHA allowance for major repairs and replacements, 7. Principal and interest on debt to finance major repairs and replacements for the home, and 8. Principal and interest on debt to finance costs to make the home accessible for a family member with disabilities if the PHA determines it is needed as a reasonable accommodation. Well..that must only be for a short time you say. You’re wrong. “There is no time limit for an elderly household or a disabled family. For all other families, there is a mandatory term limit of 15 years if the initial mortgage incurred to finance purchase of the home has a term that is 20 years or longer, and for all other cases the maximum term of homeownership assistance is 10 years.” If you’re not elderly or disabled (re: just lazy) the United States government will pay the above for up to 15 years… ..excuse me while i go throw up. Lloyd Stanton. American.
    Christine Swaidan Investor from Ventura, California
    Replied almost 4 years ago
    We accept Section 8 in our rentals. Throughout many years in this business we have experienced all the nightmares that come with owning rental properties. We’ve had houses wrecked by tenants, both section 8 and not. Section 8 tenants tend to be a protected class. I wanted to start an eviction process on a S8 tenant who has her daughter and 2 grandsons living in a one bedroom unit with her. The daughter is acting as a caregiver. This is a 55+ community so it is clearly a violation to have two young children living there. I was told by my legal person that I would probably not win this battle. I called S8 and they said they are not going to do anything even though the situation violates their contract. On the other hand I recently inspected 2 units at the same property with S8 tenants. As part of our tenant appreciation program we are rewarding long term tenants with new countertops. These 2 ladies were next on our list at 15 years and 16 years. Both their apartments were spotless, 40 year old laminate countertops were in perfect shape AND both had replaced their old warn out carpet on their own dime!
    Replied over 3 years ago
    I have read these comments and it amazes me how much whining landlords do all because they have to actually earn a living managing a building by keeping it up to code. If it is beyond your reach to provide a habitual residence, then why don’t you try another line of work. Majority of landlords are making windfall profits on the historic housing shortage in Calif. Source of in-come discrimination is all that this is about.