Section 8 and Housing Tenants Pros and Cons

17 Replies

We've purchased our first investment property in a "revitalization" neighborhood. It has been on the market for about two months now. We originally didn't accept section 8 or housing tenants, but are reconsidering because the property has yet to be rented. We were hoping to attract tenants that may be more steady in their finances. However, that has not beenthe case. What are some experiences, pros and cons, with section 8 and housing tenants?

@Stanley E. , this is a topic that has been discussed in many threads on BP.  A recent one is here. You should be able to find others with a search.  When you enter into an agreement with Section 8 it is an extremely uneven relationship.  The landord is held strictly to the agreement and can actually be charged with a crime in some instances if they do not comply while the housing authority often changes the terms, sometimes in violation of the contract and there is little recourse.  Sure you can sue but you might as well use those dollars to kindle a nice fire. At least then you'll get some use out of them.

There are some landlords who extol the benefits of Section 8 but I and most I know have run into problems severe enough that they will no longer participate.  I believe there are 2 types of landlords: those who do not accept Section 8 and those who will soon not accept Section 8.

@Jeff Rabinowitz  You've mentioned that landlords can be charged with a crime a few times in other threads, but I haven't been able to find any instances of where this would be the case (outside of those cases where any landlord would be charged with a crime). Could you share where you've found this information?

I haven't read the agreement in a decade but I recall that if the landlord did certain activities (maybe accepting extra payments from the tenant or not doing required repairs) that was a violation of Michigan State Law.  (The contracts I had were very long and full of requirements on the landlord with very few responsibilities delineated for the Housing Authority.)  I doubt that landlords are actually charged very often. It is much more likely that they would be kicked off the program.  I just mention it as an illustration of how unequal the contract is.  If the Housing Authority violates the contract (and they do) the landlord has essentially no recourse.

These contracts vary by State.  It is possible the clauses I remember are no longer part of the Michigan contract and it may have never been in the contracts of other States.

Originally posted by @Jeff Rabinowitz:

There are some landlords who extol the benefits of Section 8 but I and most I know have run into problems severe enough that they will no longer participate.  I believe there are 2 types of landlords: those who do not accept Section 8 and those who will soon not accept Section 8.

There must be at least 3 types of landlords.  We accept Section 8 and have for the past 19 years and look forward to continuing our relationship with our local housing authority, who administers the program in our area.  

@Stanley E. , you would do well to read as many of the previous BP discussions on this as you can.  See the Section 8 links at the bottom of this in the "related discussions" section and also type Section 8 in the "search the site" box at the blue bar at the top of the page. Then contact your local Section 8 administrator and find out how the program works in your area. You could do very well by renting to Section 8 tenants. 

Our Section 8 residents are great long term tenants who take care of the property and pay rent on time. Our local housing authority is efficient and easy to work with. Some landlords have not had such an easy time. Part of it has to do with mindset and part of it has to do with poor tenant screening and part of it has to do with the way Section 8 is administered in a particular area.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

Originally posted by @Stanley E. :

We've purchased our first investment property in a "revitalization" neighborhood. It has been on the market for about two months now. We originally didn't accept section 8 or housing tenants, but are reconsidering because the property has yet to be rented. We were hoping to attract tenants that may be more steady in their finances. However, that has not beenthe case. What are some experiences, pros and cons, with section 8 and housing tenants?

In the future only take section 8 tenants if you are buying a section 8 type of house.  My plan this coming year is to buy 4 section 8 type properties.  There will be no extra's.  No dishwasher, no washer dryer, no garbage disposal.  No ceiling fans or other higher fixtures.  Cheap white range and fridge.

All will be working and a safe property but you need to limit the damage that can be done

My recent duplex purchase had a sec 8 tenant in place in one unit and a nice young married couple (non-section 8) in the top unit. I wouldn't classify this property as being solely a sec 8 property like suggested. She's the cleanest of the 2 units and very easy to work with so far. I don't have to worry about collecting rent on time and feel like she is less likely to trash the place as she stands to potentially lose her sec 8 voucher for this.

I'm sure there are many on BP who have horror stories about sec 8 tenants but you'll also find those same stories from working middle class tenants....doesn't mean I'm not going to rent to them because I once read a story about someone...

Originally posted by @Marcia Maynard :
Originally posted by @Jeff Rabinowitz:

There are some landlords who extol the benefits of Section 8 but I and most I know have run into problems severe enough that they will no longer participate.  I believe there are 2 types of landlords: those who do not accept Section 8 and those who will soon not accept Section 8.

There must be at least 3 types of landlords.  We accept Section 8 and have for the past 19 years and look forward to continuing our relationship with our local housing authority, who administers the program in our area.  

@Stanley E. , you would do well to read as many of the previous BP discussions on this as you can.  See the Section 8 links at the bottom of this in the "related discussions" section and also type Section 8 in the "search the site" box at the blue bar at the top of the page. Then contact your local Section 8 administrator and find out how the program works in your area. You could do very well by renting to Section 8 tenants. 

Our Section 8 residents are great long term tenants who take care of the property and pay rent on time. Our local housing authority is efficient and easy to work with. Some landlords have not had such an easy time. Part of it has to do with mindset and part of it has to do with poor tenant screening and part of it has to do with the way Section 8 is administered in a particular area.

Marcia, are your Section 8 tenants in C properties? And are they SFH or Multi's?

I had a S8 tenant for 6 months as a legacy in a new purchase 4U. There is whole house steam heat, and in February she stood in her 70 degree living room complaining it was cold. She was wearing shorts and a tank top. Couple of months earlier we got a call from the authorities that her daughter had scalded the baby in the tub. WTF? No matter how hot the tap water who dumps the baby in the tub without testing it? They also complained they had maggots. I explained that maggots aren't migratory, they came from the garbage in their their own apartment! Nope, never again. I'd rather get lots less than do S8. But I'm getting more, and from more functional tenants.

Originally posted by @Andrea Jones :

Marcia, are your Section 8 tenants in C properties? And are they SFH or Multi's?

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Our 8-plex was a C property and is now a B property since we have owned it for nine years and have steadily improved it. We currently have two Section 8 tenants there plus one other who was on Section 8 but is now making it on their own. Our other section 8 tenant lives in one of our SFR houses which is also a B property. I must say, the house looks much better now than when she first rented it, as she has a real talent for home design and takes pride in taking care of the house and yard. These are all long term tenants, the longest being in the same apartment for 26 years.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

Originally posted by @Scott K. :

In the future only take section 8 tenants if you are buying a section 8 type of house.  My plan this coming year is to buy 4 section 8 type properties.  There will be no extra's.  No dishwasher, no washer dryer, no garbage disposal.  No ceiling fans or other higher fixtures.  Cheap white range and fridge.

All will be working and a safe property but you need to limit the damage that can be done.

What is a Section 8 type house? The units in which our Section 8 tenants live are the same as the units in which our non-section 8 tenants live. We provide dishwashers and ceiling fans. The refrigerator and range are neither high-end nor low-end. Some units have nice wood-burning fireplaces, natural gas ranges, decorative curtain rods, carpet, and vinyl-plank flooring that looks like hardwood. Our tenants don't know who is receiving support from Section 8 and who is not. We treat all of our tenants with respect and dignity and that is generally what we receive in return. We also set the expectation that our tenants will take care of the property, pay rent on time, and follow all of the terms of the rental agreement. If they don't, then they won't be staying long.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

Originally posted by @Marcia Maynard :
Originally posted by @Scott K.:

In the future only take section 8 tenants if you are buying a section 8 type of house.  My plan this coming year is to buy 4 section 8 type properties.  There will be no extra's.  No dishwasher, no washer dryer, no garbage disposal.  No ceiling fans or other higher fixtures.  Cheap white range and fridge.

All will be working and a safe property but you need to limit the damage that can be done.

What is a Section 8 type house? The units in which our Section 8 tenants live are the same as the units in which our non-section 8 tenants live. We provide dishwashers and ceiling fans. The refrigerator and range are neither high-end nor low-end. Some units have nice wood-burning fireplaces, natural gas ranges, decorative curtain rods, carpet, and vinyl-plank flooring that looks like hardwood. Our tenants don't know who is receiving support from Section 8 and who is not. We treat all of our tenants with respect and dignity and that is generally what we receive in return. We also set the expectation that our tenants will take care of the property, pay rent on time, and follow all of the terms of the rental agreement. If they don't, then they won't be staying long.

Really? You have units, I am talking about SFR's I am in the market for some section 8 properties right now, With section 8 there is no need for bells and whistles. I will provide a very nice clean and functional property. The less moving parts the better. Not my fault that people put laundry soap in the dishwasher. Not my fault they think a garbage disposal is for everything.

I will expect that the tenants with take care of my properties, just like everyone else.  But if section 8 tenants want all the extra's that's good incentive for them to improve their lot in life.     

Originally posted by @Scott K. :
Originally posted by @Marcia Maynard:
Originally posted by @Scott K.:

In the future only take section 8 tenants if you are buying a section 8 type of house.  My plan this coming year is to buy 4 section 8 type properties.  There will be no extra's.  No dishwasher, no washer dryer, no garbage disposal.  No ceiling fans or other higher fixtures.  Cheap white range and fridge.

All will be working and a safe property but you need to limit the damage that can be done.

What is a Section 8 type house? The units in which our Section 8 tenants live are the same as the units in which our non-section 8 tenants live. We provide dishwashers and ceiling fans. The refrigerator and range are neither high-end nor low-end. Some units have nice wood-burning fireplaces, natural gas ranges, decorative curtain rods, carpet, and vinyl-plank flooring that looks like hardwood. Our tenants don't know who is receiving support from Section 8 and who is not. We treat all of our tenants with respect and dignity and that is generally what we receive in return. We also set the expectation that our tenants will take care of the property, pay rent on time, and follow all of the terms of the rental agreement. If they don't, then they won't be staying long.

Really? You have units, I am talking about SFR's I am in the market for some section 8 properties right now, With section 8 there is no need for bells and whistles. I will provide a very nice clean and functional property. The less moving parts the better. Not my fault that people put laundry soap in the dishwasher. Not my fault they think a garbage disposal is for everything.

I will expect that the tenants with take care of my properties, just like everyone else.  But if section 8 tenants want all the extra's that's good incentive for them to improve their lot in life.     

To attract the best tenants (Section 8 or not), we will add some "bells and whistles"! Section 8 tenants have choices too, especially if they are on the voucher program and are looking for homes in the private market.

When I say "units" I am referring to each family dwelling/home.... for us that is a total of 15. They are configured as houses (3 buildings x 1 dwelling = 3 units) and duplexes (2 buildings x 2 dwellings = 4 units) and an 8-plex which is really 4 duplexes grouped together (4 buildings x 2 dwellings = 8 units). 

Whether it is a SFR or a multiplex, the type of tenant one rents to will depend on the location, the type of property presented, quality of the dwelling unit, tenant screening, strength of the rental agreement and how well the property is managed. There are many tenants who receive Section 8 subsidies that will qualify to live in one of our properties. Their strength of character and how they will perform as a tenant is not tied to whether or not they receive Section 8 support.

That said, there are many people on the Section 8 program who won't qualify to live in our properties, for reasons other than their source of income or the public benefits they receive. If aiming for the lower end of the Section 8 market, then hardening properties is a good idea and it may indeed be to your benefit to forego some of the "extras".

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

@Marcia Maynard  

I do agree with you.  I also want to have the better people in my properties.  If there is already a dishwasher in place I will leave it or replace it.  But I would not do a total redo on the kitchen and place a dishwasher in it.  The properties I am looking for are in a area that the property values will not likely ever go up if at all,  They are not in ghettos but in areas filled with renters.  I will have nice new paint and nice white lowes cabinets in the kitchen.

I will never ever be a slumlord.  My goals are to have a good quality safe and clean property for people to live in.  But you can only invest so much into these types of properties.

Properties that won't go up in value no matter how much you put into them is what I am talking about when calling them the section 8 types of properties.

I would never want a 8 plex filled with section 8 people.  That sounds like a disaster to me

@Scott K.  IMHO you can have a successful, appreciating Section 8 rented property if you're in a city, or section of city, where the Section 8 numbers work correctly for it. A neighborhood that is on the upswing, but is currently cheap relative to the rest of a Housing Authority area is the idea spot for this. As @Marcia Maynard  states, Section 8 renters, when screened properly, don't really carry additional risk over other low-mid range income working tenants paying full boat. Obviously any property you buy should be tailored to the tenants you're looking to attract, but don't forget you're still looking to attract tenants. One of my (few) gripes with the Section 8 Bible book is that it operates from the perspective that Section 8 renters have a strong lack of choice, due to various factors, so all you need to do to attract tenants is clean a unit up and bulletproof it to make a profit. That is only true in some areas (and may be true in yours), but if you want the best of any given class of tenant, you shouldn't focus just on the durability aspect. I'm guessing Marcia's better tenants help her cashflow much better than shorter term, higher turnover tenants in places that are simply bulletproofed. Just something to keep in mind. 

Originally posted by @Bradley Bogdan :

@Scott K. IMHO you can have a successful, appreciating Section 8 rented property if you're in a city, or section of city, where the Section 8 numbers work correctly for it. A neighborhood that is on the upswing, but is currently cheap relative to the rest of a Housing Authority area is the idea spot for this. As @Marcia Maynard  states, Section 8 renters, when screened properly, don't really carry additional risk over other low-mid range income working tenants paying full boat. Obviously any property you buy should be tailored to the tenants you're looking to attract, but don't forget you're still looking to attract tenants. One of my (few) gripes with the Section 8 Bible book is that it operates from the perspective that Section 8 renters have a strong lack of choice, due to various factors, so all you need to do to attract tenants is clean a unit up and bulletproof it to make a profit. That is only true in some areas (and may be true in yours), but if you want the best of any given class of tenant, you shouldn't focus just on the durability aspect. I'm guessing Marcia's better tenants help her cashflow much better than shorter term, higher turnover tenants in places that are simply bulletproofed. Just something to keep in mind. 

You people are missing my point.  With all the extra's you still can't get more for rent.  My properties will be nicer then most but I know what I am trying to get in the property.  My area will be outside of Detroit.  In neighborhoods that are low income but not dangerous.  No need for all the extras with everyone trying to get out of Detroit.  There is a demand for section 8 housing in this area.  But I also think that there needs to be a difference in people that get free money and people that pay their own way.  If not why try to improve ourselves.

Yes people that work and pay their own way deserve a better lifestyle.  That's the problem we somehow think that poor people should have everything a middle class person has.  That seems to be a huge problem in this country.

That does not mean they deserve to live in crime infested warzones just that if they want central air and a dishwasher they should better themselves to pay for it themselves 

@Scott K.,

you may want to contact @Michelle Fischer and @Bill G.

they have more experience with S8 and maybe a few extra ideas

good luck


My property manager just asked me to accept a section 8 tenant almost 9 months ago The sign up process was seamless and the checks are on time  like clock work with the tenant contributing his share We only had 1 repair and a normal tenant relationship.Tenants are good or bad regardless on being  dependent on section 8