{"id":87831,"date":"2017-04-14T11:00:45","date_gmt":"2017-04-14T17:00:45","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=87831"},"modified":"2021-03-16T12:24:05","modified_gmt":"2021-03-16T18:24:05","slug":"pros-cons-section-8","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/pros-cons-section-8","title":{"rendered":"The Pros and Cons of Accepting Section 8 Housing"},"content":{"rendered":"

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\u2019s rent. Section 8 is available to low-income, elderly, and disabled tenants to help pay their rent and utilities. According to the HUD\u2019s website, in order to qualify for Section 8, the applicant\u2019s 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.<\/p>\n

Additionally, Section 8 requires that properties be held to certain HUD-approved standards, and all Section 8 rentals must be inspected\u00a0before the landlord can receive money from the Section 8 program. Most of these requirements are common sense things that you shouldn\u2019t 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.<\/p>\n

So should you accept Section 8? Let\u2019s look at some of the pros and cons to help you decide.<\/p>\n

\"\"<\/p>\n

Related:<\/strong> Should I Accept Section 8 Tenants \u2014 Or Run the Other Way?<\/a><\/em><\/p>\n

Pros of Section 8<\/h2>\n
    \n
  1. You\u2019ll 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.<\/li>\n
  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.<\/li>\n
  3. Housing Authority will conduct annual inspections of the unit, making sure the tenant is not destroying the property.<\/li>\n<\/ol>\n

    \"work-from-home\"<\/p>\n

    Cons of Section 8<\/h2>\n
      \n
    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\u2019s standards for habitability on an annual basis. We listed this as a \u201ccon\u201d since it requires that the landlord adhere to the government\u2019s standard of habitability, not their own. It\u2019s not necessarily a bad thing, just something to keep in mind.<\/li>\n
    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\u00a0for forthcoming damages.<\/li>\n
    3. Even though the tenant must meet the Section 8 program\u2019s 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\u2019t afford the rent.<\/li>\n
    4. Finally, in our experience, Section 8 tenants can be more difficult to manage than their unsubsidized counterparts. We\u2019ve 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\u2019t financially responsible for what happens, or perhaps it\u2019s 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\u2019t jump to rent to Section 8 unless a weak rental market makes it advantageous.<\/li>\n<\/ol>\n

      Related:<\/strong> 8 Myths About Section 8, Corrected: Here\u2019s the Profitable Truth<\/a><\/em><\/p>\n

      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\u2019ll 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\u2014plus months of lost rent!<\/p>\n

      This situation could probably have been avoided altogether had the property manager who placed the tenant screened correctly, but that\u2019s one of the risks you take when buying properties with existing tenants.<\/p>\n

      Just because a tenant is on Section 8 doesn\u2019t automatically make them a good or bad tenant. It\u2019s 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.<\/p>\n

      [This article is an excerpt from Brandon Turner’s <\/em>The Book on Managing Rental Properties<\/a>.]<\/em><\/p>\n

      Do you invest in Section 8 housing? Why or why not?<\/em><\/p>\n

      Leave your comments below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

      Section 8 is available to low-income, elderly, and disabled tenants to help pay their rent. Should you accept it? Let\u2019s look at some of the pros and cons.<\/p>\n","protected":false},"author":710,"featured_media":87832,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5183],"tags":[],"class_list":["post-87831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-landlording"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/87831","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=87831"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/87831\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/87832"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=87831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=87831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=87831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}