Buying a home with Section 8 Tenants- Do or Don't?

Question

Hello All!  My wife and I are considering purchasing a home, maybe a few, that have Section 8 Tenants in them.  The homes themselves look like they are in great shape, and the prices are good.  I don't know much about Section 8 except that the government assists with the rental, so what are some things I should be looking out for?  What are some things that make these a bad investment?  Any opinions are greatly appreciated.

Chris Mason · Answer

Sec8 is administered by a local housing authority. Some are landlord friendly, some are landlord hostile, the federal framework in practice allows for both. This is a hyper local question; you didn't post the housing authority that's applicable to you, so no one can really answer. Post the city/county so you get folks with auto-alerts set up to respond to the thread.

In addition, I suggest going to your local REIA meetup and getting "the scoop" from other local landlords. Put a few beers in them and they will spill the beans.

What someone posts here that owns in Austin or Oakland or Cincinnati  isn't super important to you, and might actually lead you down the wrong path.

Thomas S. · Answer

As Chris points out it is entirely area specific. How the welfare handlers work dictates whether S8 is worth risking or not. Whatever anyone ever tells you the income is not guaranteed. Collecting the tenants portion can some times be near impossible. S8 is generally very much hands on management. Many have very low social standards and often do things beyond imagining. They take in dogs, pregnant adult children, their common law spouse when he is not in prison etc. etc.

Aaron Gordy · Answer

Section 8 is guaranteed money. I have rented out to tenants that were on section 8. Most were good experiences. I have had a bad tenant that was section 8. Its the bad tenants that tend to cloud one's perspective. But its all about the tenants. Interview the tenants or just ask a few good questions. If the houses look great then go for it. Section 8 is guaranteed direct deposit into your bank account money. In Austin there is a long wait list as affordable housing is a big deal here. Would I rent to section 8 tenants again? Certainly, if they can qualify. Simple as that. But my ex used to work in Section 8 in Austin and so I got to know the program really well. There are some good people on Section 8 that just can't afford to live in market rent properties.

Steve Eagland · Answer

@Ralph Tomm, sorry for an incredibly late response.  Life got pretty crazy the past few months.  I have not purchased anything in Wilmington yet, not knowing the areas well enough is kind of spooking me because things can change within just a couple blocks there.  So I am trying to learn the area a bit better.  But I am absolutely interested in discussing Wilmington investing.

Ralph Tomm · Answer

@Steve Eagland Just bought 2 properties in Wilmington, in Hedgeville.  Was considering Section 8 as well.  Would love to share info.  One needs a full rehab, the other a facelift.  I was planning on testing one with Section 8 and one market, and go from there.

Steve Eagland · Answer

@Teri S. Thanks for the response. Yes- I mis-spoke... the house is currently occupied by section 8 tenants, so the current landlord accepts the vouchers. It seems like there is no real difference between section 8 tenants and any other.  Anyone can be a bad tenant, but I like the fact that the houses are inspected routinely.

Thank you, everyone, for the responses!

Teri Feeney Styers · Answer

@Steve Eagland I have managed some Section 8 properties in the past. As @Thomas S. mentioned, you can get people who abuse your house or the situation. But Section 8 has strict rules regarding who can be there and if they violate those rules they stand to lose their voucher. That is some powerful leverage. First of all it sounds like you are purchasing a property with the tenants already in place. That means you get to see how they currently live. Secondly, you don't buy "section 8" properties; you decide whether or not you are willing to accept section 8 vouchers. If you do, use the system to your advantage - they do regular inspections - get in there with them. If someone is late on their portion or otherwise violating their lease, notify the section 8 people - they can be great partners.

Greg Carrier · Answer

We have purchased several homes with tenants including section 8 and it has all worked out fine.

Steve Eagland · Answer

Thanks @Chris Mason.  The area is Wilmington, Delaware.  Housing Authority is the Wilmington Housing Authority https://whadelaware.org/ .  I will reach out to a few people that are more local for additional information.

Brooke Kozak · Answer

I currently am in Indiana, and from my experience, I like to meet the tenant and make my own decision.

Buying a home with Section 8 Tenants- Do or Don't?

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