Section 8 Investing — Still a Smart Move in 2025?

Question

Hey everyone,

I’ve been diving deeper into rental strategies and keep coming across Section 8 (Housing Choice Voucher) investing. Some investors love it for the guaranteed rent and lower vacancy, while others say the inspections, red tape, and tenant management make it not worth the trouble.

For those of you who’ve done it — or are doing it now:

• How’s your cash flow and stability compared to market-rate rentals?
• What’s been your experience with inspections, tenant screening, and city requirements?
• Do you think it’s better suited for B-class or C-class neighborhoods?
• Any major lessons learned you wish you knew starting out?

I’m still fairly new to out-of-state investing and looking at properties in the $80K–$125K range, so I’m trying to figure out whether Section 8 could be a solid starting strategy or a headache for a first-timer.

Would really appreciate any firsthand insights — the good, bad, and ugly.

Christopher

Drew Sygit · Answer

@Christopher Rubio Section 8 really should be targeted for Class C properties.

We manage almost 100 S8 leases in the Metro Detroit market.

While S8 may address tenant nonpayment issues, there are other challenges with tenant-portion of rent payments, tenant damages, dealing with S8 Annual Inspections and dealing with the nonresponsive caseworkers (underpaid & overworked).

It also does NOT pay more than market rent. 
Ask yourself, why would the federal government pay MORE than market rent and waste our tax dollars?
The reality is that the Gross S8 Rent amount on an S8 voucher includes all utilities. Remove those and the Net S8 Rent will be market rent.

Typically, the only way to get more than market rent is by buying in Class D areas and hoping a S8 tenant will live there instead of a Class C area.

Keep in Mind: TENANTS QUALIFY FOR SECTION 8 FOR A REASON!
Most S8 tenants have a history of bad decisions, often having convictions, evictions, bankruptcies, chargeoffs, collections, garnishments, etc.

We embrace S8 applicants, but screen them just like any other applicant.

Many have an entitlement mentality and try to leverage their S8 voucher by pretending to be helpless:

1) A percentage won't apply because they expect a landlord to waive application fees for them.

2) Many cry broke and expect a landlord NOT to charge them a security deposit.

3) Many of those same S8 tenants trying to avoid paying a security deposit, won't make an effort to call the list of nonprofits we send them that will pay their security deposit if they apply.

4) A lot of them try to avoid paying for utilities. S8 will include utilities in the rent payments to the landlord, BUT ONLY UP TO A CERTAIN AMOUNT. Many tenants abuse free utilities and stick their landlords with the amounts that exceed what S8 pays. Don't even get us going about S8 tenant retaliation via abuse of utilities!

5) Those that have to pay a portion of their rent - some don't. Again, they try to leverage the majority the landlord is getting, so they don't have to pay their portion.

6) We get the most maintenance requests from S8 tenants. Many won't lift a finger to do anything. They expect us to replace lightbulbs, won't change furnace filters and we also have lawn maintenance issues with them. Forget trying to walk them through a simple repair over the phone, to avoid sending a ServiceTech and saving an owner money. They always pretend to be confused and just want us to send someone.

7) Some will cause damages that S8 won't require to be fixed, but will threaten to move if you don't fix it. One demanded we paint the interior the color they wanted or they wouldn't renew their lease.

8) MoveOut damages typically exceed their security deposit.

These are the horror stories.

We also have S8 tenants that keep their homes immaculate!

So, proper screening is EXTREMELY important!

DM us to set up a call to discuss further😊

Joe Norman · Answer

Keep in mind that, depending on where you invest, "Source of Income" could be a protected class. If so you can't target Voucher Holders over tenants who pay their own rent, nor can you avoid/decline them simply because of their voucher.

Here in Maryland, where I am licensed, Source of Income is a protected class so I will not opine on the pros/cons of the programs. Just a reminder to all out there to stay up to date on Fair Housing rules and the protected classes in your state.

Drew Sygit · Answer

I'm tired of typing!DM us to set up a call to discuss further😊

Jason Jones · Answer

The answer to this would be great to know.  I'm currently looking into S8 property ownership myself.

Joe Norman · Answer

As a licensee I am required to take Continuing Education classes on Fair Housing updates every cycle, so that is my main source of information. In addition to that my professional organizations (National Association of Residential Property Managers, Maryland Realtors, and Harford County Board of Realtors) are great resources of information for me on this subject as they try very hard to protect their members.

If you are not a licensee or member of a professional organization I would suggest trying your state's Department of Housing/Community Development (or whatever its called in your state).

Christopher Rubio · Answer

@Joe Norman

That’s a great point — thank you for bringing that up. I’ve been reading more about how “Source of Income” protections vary by state, and it’s definitely something I’ll keep an eye on as I look at different markets.

It’s easy to get caught up in strategy and numbers, but staying compliant with Fair Housing laws is just as important. Appreciate the reminder to do the homework on state-specific rules before moving forward.

Out of curiosity, have you found any particular state resources or training that do a good job of breaking down those Fair Housing updates?

Christopher Rubio · Answer

@Drew Sygit

Thanks for sharing such an honest breakdown — this is exactly the kind of insight newer investors like me need. I’ve heard mixed opinions about Section 8, but your post really helps paint a realistic picture of what to expect and how much screening matters.

I’m curious — in your experience managing close to 100 Section 8 leases, what kind of neighborhoods or property types have worked best for long-term stability and fewer headaches?

Also, do you think a new investor with limited capital could start successfully in that space if they have strong management support, or is it better to gain experience elsewhere first? I’d love to hear your take on that.

Section 8 Investing — Still a Smart Move in 2025?

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