Are you still taking Section 8 tenants?

Question

Posting this for the BiggerPockets Investor Brief. Good replies might end up in Thursday’s edition.

Housing authorities have until Feb. 1 to switch voucher inspections over to HUD's new NSPIRE standards. Some already have.
Under the new rules, a dead smoke alarm is a 24-hour fix. Miss that, and the housing authority can stop paying its part of the rent.

I know landlords who swear by vouchers. The rent shows up every month, and the tenants stay forever. I also know a guy who quit after his third failed inspection over a missing outlet cover.

So are you in or out for 2027? Tell me where you invest and what made you decide.

Amit Patel · Answer

Definitely in for 2027. We manage Section 8 across six counties in the Chicago suburbs and have been doing it for many years, and some of our most stable properties are voucher units.

Honestly, I think NSPIRE will push out the landlords who treat inspections as an afterthought and reward the ones who prep. The new standard leans harder on health and safety, so the small stuff matters more than ever: smoke and CO detectors, outlet covers, GFCIs, handrails, anything that looks like moisture or mold. None of it is expensive. It just has to be done before the inspector shows up, not after.

What’s worked for us is walking every unit with the inspection checklist a week or two before the date, and keeping a small kit in the truck with detectors, batteries, covers, and GFCIs. Most fails we see come down to a $10 part. And with the 24-hour fixes, have a vendor who can actually get there the same day.

The guy who quit over an outlet cover had a process problem, not a voucher problem. Fix the process and the program pays you every month while your tenants stay for years.

Noah Wright · Answer

I don't own voucher units myself, but plenty of them come through on the lender side of this, and the landlords who treat inspections as routine maintenance are the ones whose rentals hold up best when it's time to refinance. One thing to sort out before you decide in or out: DSCR lenders don't all count Section 8 rent the same way. Some will underwrite off the full contract rent on the HAP contract, and others cap it at the market rent the appraiser puts on the rent schedule. Where the voucher pays above market, that choice changes how much you can borrow, so ask about it before you're under contract. A rent is only worth what the paperwork behind it supports, and under NSPIRE a missed 24-hour fix can pause the housing authority's share, which is the part of the rent the lender was counting on.

James Jones · Answer

I am in for 2027, in Memphis. Section 8 is the core of how I run my single-family BRRRR deals: buy under $100K, ARV $180K to $265K, and Section 8 rents of $1,395 to $1,950 for 3 bedrooms or more, in ZIPs 38109, 38111, 38112, 38114, 38116, 38117, 38118, 38122, and 38128. The rent shows up, tenants stay longer, and the numbers are real, not asking rents. The work is on my side. I rehab the systems first - roof, HVAC, plumbing, electrical - and walk the house with the inspection list before the inspector does, so a dead smoke alarm or a missing outlet cover is fixed before it becomes a 24-hour problem. If the rent, the 1% rule, and DSCR at 70 to 80% LTV all work, I take the voucher. If they do not, I walk away from the house, not from Section 8.

David Krulac · Answer

@Garrett Brown I've had section 8 rentals for many years. During Covid tenants of mine were getting Covid rent assistance, other tenants were getting Section 8 rental assistance, and had tenants who had been homeless and were getting rental assistance from that program. All 3 programs were administered by the local housing office. The homeless 3 generational family was living in a very basic 150 year old hotel. The housing office called me because I had other tenants who were receiving assistance. Those tenants stayed for eight years. Other section 8 tenants have stayed 3 to 12 years. The housing office was pleased that I could accommodate a 3 generational family in a 5 bedroom rental I had. And the rent was lower than the hotel rent saving the county money. For years I also participated in the HUD rental survey, where I would give them a list of my units rented in the coverage area. Most of my rentals were above the HUD Median rent schedule and therefore did not qualify for Section 8 because the rent was higher than their allotment. Currently I don't have any Section 8 rentals, but am not opposed to them and given the right circumstance, would participate again.

Remington Lyman · Answer

Yes. I am keeping my Section 8 rentals I own here in Columbus, Ohio

Richard F. · Answer

"Still taking" is not the phrasing I would use. In more and more jurisdictions, "source of income" is a protected class subjecting you to Fair Housing issues for summarily rejecting those applicants.

Indeed the new inspections appear to be much more in depth, although they do not appear to be well organized. I can imagine inspections may take much longer, if the Inspectors follow the intent. Nonetheless, you know what the standards are, so you adjust your own rental prep process to cover all of the new/different elements.

Screen S8 applicants thoroughly and adjust your decor and product durability to attract the best of the applicant pool and prolong maintenance intervals.

Are you still taking Section 8 tenants?

Are you still taking Section 8 tenants?

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