We are in the process of closing on a duplex that has one side that has tenants that are section 8 tenants on a month to month basis (we think).  They have been there for 5 years and the rent is significantly less than market value.  We were planning on rehabbing that side once the tenants lease was up (which would be the right after we buy since it is month to month) and then renting it out but just found out about the section 8 status.  

Questions:

1.  Is it difficult to not renew the lease on a month to month section 8 tenant.

2.  Has anyone had any problems with buying a home with a section 8 tenant and not renewing the lease.

Any thoughts or insight would be helpful.  We close in a few weeks and just want to make sure this issue will not effect our plans to have them move out so we can remodel that side once we buy the property.  

This isn't a problem at all.  First, before you decide if you want to keep the tenant, find out of they have income.  If they don't, you won't get the maximum allowed rent, so I would move them out.  As a new payee, SEC 8 will want you to put the tenants in a new lease.  You will have an opportunity to request a new rent at that time and will be required to start with a 12 month lease. After the 12 months you can set any term you and the tenant agree on.

https://www.biggerpockets.com/blogs/9232/55313-intro-to-section-8---your-perceptions-vs-my-realities

Good luck!

Thanks Patti. That is really helpful.