Section 8?

42 Replies

Topic came up in the office today about the pro/cons of section 8 renters.

When I lived in Houston, I've always been told to stay away from section 8, because low quality tennents can do some serious damage. However, here in South Florida everyone in the office is for section 8, becuase you generally end up ahead of the curve.

Considering I plan on getting into the buy/hold investment area personally, what does BP Suggest I start marketing to?

Originally posted by @Cedric Dadaille :

Topic came up in the office today about the pro/cons of section 8 renters.

When I lived in Houston, I've always been told to stay away from section 8, because low quality tennents can do some serious damage. However, here in South Florida everyone in the office is for section 8, becuase you generally end up ahead of the curve.

Considering I plan on getting into the buy/hold investment area personally, what does BP Suggest I start marketing to?

Start marketing to everyone!  Don't limit yourself to Section 8 tenants.

You have to screen all tenants to a high standard to avoid the bad actors.

Definitely agree with that!

More accurately I suppose, should hold section 8 housing against the tenant? in their favor? or not factor it at all?

Not a factor.

Keep in mind the paperwork and procedure requirements of Section 8.  I have not rented to a new Section 8 tenant in years because it takes a few weeks in between an approved application and an inspection.  A private renter does not have to wait.  I require a "hold deposit" and that is on a first come, first serve basis on all approved applicants.  So if a Section 8 tenant won't give a hold deposit until the inspection is complete, another approved applicant can get the apartment with the hold deposit.  Also, my Section 8 office requires an empty apartment for inspection (maybe different in your area).  I often rent out my vacancies before the previous tenant has moved out.  Just some things to consider......

In my market place it really does not matter as it is illegal to deny section 8.  I do not have any section 8 tenants, but that is just kind of the luck of the draw for me.

Operations vary widely in different jurisdictions. Go visit your local office and talk with them about how they operate, what their expectations are and various timelines. My local office is very efficient, not too crazy with inspections, and overall good to work with. I limit the number of sec8 in my complex to about 30%. I don't do them in my SFR homes. I screen them and manage them fairly tightly but professionally. When I have had to remove them I have had the full cooperation with Sec8. Overall a good experience for us.

Good to know! I'll be a lot more open to section 8 then.

The way to protect yourself against section 8 renters is to have the same standard, prior to posting the ad, of what the standards are for your tenant.  From there, it is first come, first served.  Each time I have had a person ask if I accept it, I say sure, but you have to meet the standards.  They find out the standards and do not apply.  The same goes with private renters.  Stating realistic standards are the way to go to keep you out of trouble.  :-)

@Cedric Dadaille , @Justin Jocewicz & @Curtis Bidwell have given you some good advice. I totally agree with them both. Section 8 programs/tenants vary based on your area and the local office and how they operate. As far as the section 8 tenants go, you have some good ones and some bad ones. Screen them the same way you would screen any tenant for your properties!!!!!

When I was on vacation in Hawaii I met a man from Georgia who rents out to and loves section 8. I asked him if he was worried about potential problems with tenants and he said no because if you report them for wrong doing they can lose their section 8 privileges. He also said they always pay their rent on time. I am still new and trying to gather as much info as possible to start investing so take what I say as mere thought provoking and not anything solid. I would love to hear some feedback on what he told me.

That's also what I heard around the office here as well. They seem to be more afraid of losing their section 8 than anything.

Cedric Dadaille Get a copy of the section 8 bible online. It is a great read will teach you a lot about section 8

Aloha @Bryan Brown ,

I've not had any major problems renting to Section 8 tenants in Hawaii for the past 10 years or so. The section 8 office is not difficult to work with, and the tenants I've had tend to fall into the typical 'poverty-for-life' profile (uneducated single mom with way too many kids). 1 annual inspection to make sure you're not a slumlord, and the rents are generally at or close to market rents.

As a landlord I do have a bit of extra leverage in that, if they mess up my place, Section 8 will boot them from the program, and they'll be forced to live in the govt housing projects. And hopefully there's no wait list for that, lest they be homeless for a short period. Or at least, so I politely tell them, as they sign the lease agreement. ;-) The smart ones know its better to stay in Section 8.

I have been watching this market for a while and I am ready to jump in.  Here is how I see it.  In Jacksonville there is a 2+ year waiting list to get into section 8.  If someone waits 2 years to get a place and they trash it, they get thrown out of the program.  While I have not done one yet, I believe the threat of losing a free place to live will keep the tenants in line.  The cap rates are amazing and the places are CHEAP!   The state pays you directly on the 1st.  No collections or cash management issues.  Maintenance is going to be higher than other properties, but it would be worth it. 

I am planning on starting in 2016 or sooner if someone wants to partner on a project.

big problem with section 8 here is that you really don't know exactly what their voucher is until you get your HAP contract back. What has happened to us is that they think they are getting $950 only to find out a week or 2 later that it is really $850. You can either let them pay the difference, which they will likely stiff you or you put it back on the market, to which you know lost 2 weeks marketing. Also, keep in mind your home will get inspected every year and minor repairs will need to be done. I would budget for higher maintenace cost and underwrite them just like you would anyone else. 

my sec 8 tenants are fine.  They keep a neat house.  Somewhat of a pain to have to deal w the housing authority though.  Rents ate slightly below market but checks come right on time

I would recommend going to the housing authority for the zip you want to rent out to. See what they offer, and if you want to pursue it past that, it's up to you. There's a very negative vibe towards section 8 which is obvious in a lot of posts. But a lot of people fail to see that the non S8 just have better jobs and will depend on that job to pay for everything. I may be a dreamer, but I've always believed that if you setup proper expectations and create clear lines of communication and screen properly, everyone is the same, just a different person signs the check. But then again I'm just a wholesaler. 

I just took on a Section 8 tenant this year. So far she's been great.  Always communicates, keeps the house nice and neat (makes everyone take off their shoes when entering the house for example).  My rent comes in on the 1st via Direct Deposit from the housing authority.  My tenant pays her portion via Direct Deposit as well.  I have no complaints.

It's all about getting the right tenant.

I use Section 8 as much as possible in my low income area rentals. It's important to periodically inspect the rentals to make sure the tenants are taking care of the property.

I just had a section 8 tenant move out (finally, after non-renewal) with damages exceeding the deposit.  I sent the settlement letter and invoice to general delivery (no fwd addresss, of course) and a copy to the section 8 office.  I fully expected to receive zip of the $335 deficit.

When tenant went back to section 8 office 2 weeks later, she contacted me to make installments on the deficit.  Section 8 must have had strong words for the tenant to get her to make things right.   I guess that's a plus @Cedric Dadaille .  I broke my own screening criteria trying to help this tenant out.  Single mom in a halfway house, blah blah, 

Tenant got into sec 8 during her tenancy, so it wasn't section 8s fault and they tried to help make things right.  I do have  3 other section 8 tenants and my experience overall has been positive.

Wow. This seems like section 8 has been pretty much positive for the most part. I'll be sure to keep that in mind.

I also have one Section 8 tenant. She's a single young lady living alone and has minor brain damage. Generally, she keeps the place clean. I just renewed her lease last week for another year.

I did not have any surprises on amount of rent from the office vs from her like someone else in this post mentioned.

I also am getting above-market rents for this neighborhood.

You should market to all people. But of course the key is to screen properly! Do not let someone move in who clearly will cause you problems.

I would suggest contacting the local housing authority and getting copies of the paperwork you would be asked to sign as a Section 8 landlord.  We have had some financially scary clauses creep into some of the low income contracts.  This was with another local non-profit, where they want to retroactively withhold rent if the building goes out of compliance (which is normally by actions of the tenant).  Explore your options, the more you can learn about section 8 and other housing programs (vets, ex-criminals, other programs) the better.

@Curtis Bidwell isnt' that discriminatory?  I listed a house for rent and I got 3 calls asking if I accept sec 8 and I told them no.  The wife is insisting on accepting it.  I'm not hip on the idea because of what I have heard about it. 

If I'm managing 2 properties that have 2 different owners, One says, "ya take sec. 8 tenants.  The other says, "no, I don't want sec. 8 tenants." Doesn't that make me look and sound discriminatory.  


@Trevor Rutherford different owners get to choose. When someone calls and asks simply say yes or no depending on the property. If the answer is no on the one they are calling about simply say, "this home is not eligible for sec-8, but the property at xyz address is".  Or "I can put your name on my list and call you when the next unit becomes available."

In my jurisdiction I can choose which units and how many I want to be sec-8. Some lenders are concerned about percentage of subsidized units, so I try to maintain a balance. So if I get a call when i am full of sec-8 I simply say I don't currently have any sec-8 qualified units but I'd be glad to put them on my waiting list. I have yet to have an issue in 25 years! 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.