Any investors having luck with section 8
Joe StaffordPro Member
Flipper/Rehabber · Fort Lauderdale, FL · Member since 2014 · 77 posts · 38 votesAny investors having luck with section 8
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votesQuote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
Ignore all the online hype!
Let's consider some logical questions:
How do tenants qualify for S8 vouchers, by making good life decisions?
Why do tenants stay on S8, instead of using their free time to educate themselves to obtain a better career?
What do S8 tenants do with all their free time?
How much time do S8 tenants actually spend in their homes vs working tenants?
How do you get a COLLECTIBLE money judgment against an S8 tenant, for property damages, when they don't have a job you can garnish?
How satisfied have YOU been in your past dealings with government workers, regarding timeliness, responsiveness and motivation?
If you really think about these questions, you'll better understand the challenges of dealing with S8 caseworkers and tenants.
Logical Property Management4.9459 Reviews
30 Replies
- 5moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
Ignore all the online hype!
Let's consider some logical questions:
How do tenants qualify for S8 vouchers, by making good life decisions?
Why do tenants stay on S8, instead of using their free time to educate themselves to obtain a better career?
What do S8 tenants do with all their free time?
How much time do S8 tenants actually spend in their homes vs working tenants?
How do you get a COLLECTIBLE money judgment against an S8 tenant, for property damages, when they don't have a job you can garnish?
How satisfied have YOU been in your past dealings with government workers, regarding timeliness, responsiveness and motivation?
If you really think about these questions, you'll better understand the challenges of dealing with S8 caseworkers and tenants.
Logical Property Management4.9459 Reviews- 5moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Drew Sygit:
Quote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
Ignore all the online hype!
Let's consider some logical questions:
How do tenants qualify for S8 vouchers, by making good life decisions?
Why do tenants stay on S8, instead of using their free time to educate themselves to obtain a better career?
What do S8 tenants do with all their free time?
How much time do S8 tenants actually spend in their homes vs working tenants?
How do you get a COLLECTIBLE money judgment against an S8 tenant, for property damages, when they don't have a job you can garnish?
How satisfied have YOU been in your past dealings with government workers, regarding timeliness, responsiveness and motivation?
If you really think about these questions, you'll better understand the challenges of dealing with S8 caseworkers and tenants.
not to mention how many kiddos and baby daddys .. kiddos with single parent are pretty tough on houses. And of course non section 8 kids as well. But you will find it very common for the majority or vast majority of section 8 to be single mothers with some to many kids and some to many baby daddys popping in and out etc etc.. its a way of life and generational for many of these women. Drew excellent point about what are they doing with their time compared to a market rate couple that each work . And kids are in school daily etc.
PS at one time I owned over 200 homes in Indy Jackson MS Birmingham 97% section 8 I lasted maybe 18 months 2 steps forward 3 backward to me juice no way worth the squeeze and all the drama theft rehabs caused by tenants etc.. Give me solid grade A B market rate tenants that just break even on paper .. nothing says rentals should or need to make positive cash flow.. thats a mid west or section 8 thought process.. rentals if you are not counting on appreciation is about write offs and tenants paying off your home for you. The value is at the end of the line when the asset is paid for or nearly and there has been some appreciation.. No one is retiring on 200.00 a month paper returns I can tell you that.. or if you go into these assets day one pay cash for them do NOT finance them.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes5mo
Quote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
Section 8 tenants are savages. If you can get past that, it's pretty profitable if you know how to harden your properties during the renovation process and have the stomach to deal with all of their savagery. I've made millions dealing with these animals over the years. I like it, but it's wild for sure.
- Real Estate Agent · Memphis · Member since 2026 · 566 posts · 329 votes5mo
A lot of the Indy numbers do look attractive on paper, but I think the key with Section 8 there is being extremely disciplined on operations and area selection.
The investors I’ve seen do well with it usually treat it as a systems business more than a “cheap cash flow” play. The stable payment portion helps, but maintenance, inspections, and tenant management still determine whether the deal actually performs.
From what I’ve seen, the biggest separator is buying in areas where demand is stable enough that you’re not constantly fighting turnover or deferred maintenance issues. A property that technically cash flows more on paper can easily underperform if the area creates constant operational friction.
The other thing I’d underwrite heavily is turn/inspection timing. Section 8 can work well when the property stays consistently occupied, but delays between tenants, inspection corrections, or prolonged turns can change the math pretty quickly.
Your buy box sounds reasonable for Indy, especially on 3BR SFH product, but I'd definitely stress test:
PM costs,
Capex reserves,
Turnover frequency,
Inspection-related repairs,
and realistic maintenance, not just pro forma maintenance.A lot of people underestimate how much operational consistency matters in those portfolios.
- Investor · CA · Member since 2023 · 196 posts · 107 votes5mo
I have been renting to sec 8 tenants and non sec 8 tenants for about 20 years in CA. I have 16 houses. In my experience it's been like this: 8/10 non section 8 tenants are pretty good. Meaning they don't cause too much damage and pay their rent on time. I'd say that number drops to 6/10 sec 8 tenants are good as well. So, we can see here there is about a 25% decrease in amount of good a sec 8 tenants. However, in CA with sec 8 tenants, I can always top out the market rent every year which keeps their rental amount very good. They usually won't move out because their portion is only a small percentage of the increase or their portion might not go up at all. Now with the regular non sec 8 their rent is usually a few hundred dollars lower and if I raise the rent it's been about 50/50 that they move within the year. Move outs are expensive. So bottom line is IDK....lol there are pro and cons and no guarantee either way. But I like topped out rents and lots of cash flow and long term renters so I prefer sec 8.
- Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes4mo
Section 8 Tenants — What Actually Matters, and Why
Pull up a chair for a minute. There’s a lot of talk out there about Section 8 tenants. Some of it’s exaggerated. Some of it’s based on real experiences.
After managing hundreds of units S8 over the years, here’s where I’ve landed:
The outcome has less to do with the program, and more to do with the process.
Screening Is Everything
If you want to improve your odds of a good experience, it comes down to one thing: consistent, disciplined screening.
Not sometimes. Not “when it feels right.”
Every applicant. Every time.
Same Standard for Everyone
This part isn’t optional. Your process should be: the same criteria, the same documentation, and the same steps for every applicant — subsidized or not. That’s not just good practice. It’s required. It's the LAW.
What You Can (and Should) Pay Attention To
When you meet an applicant, you’re not just collecting paperwork. You’re evaluating whether they’re a good fit for your property.
Pay attention to how they communicate, whether they follow instructions, if they show up prepared and on time, and how they present themselves overall.
These aren’t decisions by themselves, they’re context.
Verify What You Can Document
Focus on things you can consistently apply and verify:
- Rental history
- Payment history
- References
- Condition of prior residence (when possible and applied uniformly)
Documented patterns matter more than impressions.
Kitchen Table Truth
The program doesn’t determine the outcome. The person — and your process — does. When screening is loose, problems follow.
When screening is consistent and documented, your odds improve. Significantly.
Final Thought
Treat the process seriously, because it is extremely serious. Apply it evenly. Document everything. EVERYTHING!
Because in this business, the deal will tell you everything — if you know how to read it.
Good luck. Feel free to dm with any questions.
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes4mo
Quote from @Marc Winter:
Section 8 Tenants — What Actually Matters, and Why
Pull up a chair for a minute. There’s a lot of talk out there about Section 8 tenants. Some of it’s exaggerated. Some of it’s based on real experiences.
After managing hundreds of units S8 over the years, here’s where I’ve landed:
The outcome has less to do with the program, and more to do with the process.
Screening Is Everything
If you want to improve your odds of a good experience, it comes down to one thing: consistent, disciplined screening.
Not sometimes. Not “when it feels right.”
Every applicant. Every time.
Same Standard for Everyone
This part isn’t optional. Your process should be: the same criteria, the same documentation, and the same steps for every applicant — subsidized or not. That’s not just good practice. It’s required. It's the LAW.
What You Can (and Should) Pay Attention To
When you meet an applicant, you’re not just collecting paperwork. You’re evaluating whether they’re a good fit for your property.
Pay attention to how they communicate, whether they follow instructions, if they show up prepared and on time, and how they present themselves overall.
These aren’t decisions by themselves, they’re context.
Verify What You Can Document
Focus on things you can consistently apply and verify:
- Rental history
- Payment history
- References
- Condition of prior residence (when possible and applied uniformly)
Documented patterns matter more than impressions.
Kitchen Table Truth
The program doesn’t determine the outcome. The person — and your process — does. When screening is loose, problems follow.
When screening is consistent and documented, your odds improve. Significantly.
Final Thought
Treat the process seriously, because it is extremely serious. Apply it evenly. Document everything. EVERYTHING!
Because in this business, the deal will tell you everything — if you know how to read it.
Good luck. Feel free to dm with any questions.
Marc, you could not be any more correct! Proper, thorough, screening of all adult occupants is the single most critical responsibility of every PM. Attracting the best Tenants of your pricing tier is part of that responsibility, which means the property needs to meet a reasonable standard in terms of safety, security, and appearance.
Question for you: Do you base your total household income requirement on the full rental amount, or the "tenant portion" only?
I ask this because logically, even though the rent is subsidized by, for example, 80%, no other daily living expenses are. Car insurance, maintenance, or other transportation; food (although you could count SNAP benefits as income toward much of this expense); clothing, school supplies, utilities, pet food and care, some form of entertainment, etc. To me, this is no different than an average working person living paycheck to paycheck and maxing out credit cards. There comes a point where it all falls apart, usually with one pretty minor crisis. As they like to say these days, the Math doesn't math.
None of these expenses is reduced by 80%, so how can you base income requirements solely on "tenant portion" ? I mean, aside from the fact that "They" say you must. Have you ever seen the specific authority for this assertion?
- Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes4mo
@Richard F. as property managers, we follow the letter of the law.
We rely on consistent, written screening criteria that are applied the same way to every applicant.
When we review something like a credit score, we may look at the underlying items for context — for example:
A several-year-old medical collection
versus a recent pattern of late or unpaid obligationsBut that context is not the decision by itself.
The decision is always based on documented, legally permissible criteria, applied uniformly.
No assumptions. No exceptions.
- 4moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 935 votes
Quote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
You’re asking the right questions because Section 8 can look amazing on paper until operations start. In a lot of Midwest markets, including Indy and parts of Ohio, the biggest difference maker is buying in stable workforce neighborhoods instead of just chasing the absolute highest payment standards. The good side is that demand usually stays strong, and vacancy can be low if the property is maintained well. The bad side is that older housing stock, inspections, and tenant screening still matter a lot more than some people expect. Investors who do well with Section 8 usually have solid PMs, conservative maintenance reserves, and buy properties that attract long-term tenants instead of trying to maximize every last dollar of rent. - 4moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Great advice @Marc Winter
We also do a home interview via Zoom with all applicants that have a FICO under 620.
- Requires 2-4 active tradelines to validate the score, we ignore student loans and "Chime-like" accounts.Part of it is to have a video of who we're renting to and avoid fraud.
The other part is to have them show us the kitchen, bathroom and basement of their current home - what it looks like now is what the home you rent to them will look like in 90 days or less.
Logical Property Management4.9459 Reviews - Investor · Memphis, TN · Member since 2026 · 12 posts · 11 votes4mo
8 of my 14 doors in Memphis are Section 8. Been doing it for 10 years now.
Lot of strong opinions in here but I'll just throw my numbers out. My average Sec 8 tenant stays 4 years. My market rate tenants average just over 2. Turnover is the most expensive thing in this business so that alone makes the math work. MSHA pays on the 1st every single month, never missed one in 10 years. The tenant portion is usually $50-200 and yeah sometimes they don't pay it but the bulk of rent is covered regardless.
The screening piece is everything and Marc nailed it. I screen Sec 8 applicants the same way I screen market rate. Criminal background, eviction history through Shelby County courts, call the previous landlord not the current one. The voucher doesn't tell you anything about whether someone will take care of your property. That's on you to figure out before they move in.
The downsides are real though. MSHA inspections will find something even on a clean unit, budget $200-500 a year per property just for inspection driven repairs. Rent increases are capped by FMR so you can't just push rents when the market moves. And the paperwork is real, HAP contracts and annual recertifications add up across 8 units.
I wouldn't do 100% Sec 8 for that reason. The rest of my doors are market rate and I'm buying in better areas now. But calling the program garbage because you had a bad tenant is a screening problem not a Section 8 problem.
- 4moJosh C.Pro MemberProperty Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
Drew and James said the same thing if you couldn’t tell. They are in different markets. I’m in a third market. Agree 100%.
Not all section 8 tenants are rough to deal with. But our roughest tenants are on section 8 it seems. The caseworkers same story; they have zero motivation to help you. Some are great. But the absolute worst people we have to deal with that aren’t tenants are section employees. Two weeks ago section 8 scheduled an inspection on a property from 9-3. They couldn’t provide a tighter timeline as we requested multiple times. The inspector showed up at 2, and told my maintenance person that he wasn’t on his paperwork and wouldn’t talk to him even though our person would be the one fixing anything and we wanted clarification. After sitting his car for 5 hours!Nope, he told us to kick rocks. This is not uncommon.
It’s not 100% of the time this bad, and sometimes you get great older people who stay forever, but it can be and there isn’t much you can do about it.
- 4moRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
I think some of the replies in here are mixing together two completely different things:
- distressed real estate in distressed neighborhoods
- Section 8 as a payment source
Those are not automatically the same thing.
There are definitely operators who buy extremely low-end housing in very rough areas chasing “cash flow,” undercapitalize the rehab, defer maintenance, and then end up in constant operational chaos. That business model is real, and a lot of people get burned by it.
But there are also plenty of investors quietly running affordable workforce housing portfolios with long-term voucher tenants and very stable occupancy.
From what I’ve seen, the actual performance difference usually comes down more to:
- acquisition standards
- neighborhood selection
- rehab quality
- screening consistency
- and operational systems
than the voucher itself.
A lot of newer investors make the mistake of underwriting Section 8 deals based purely on payment standards without asking:
- would this still be a decent rental conventionally?
- what does turnover actually cost here?
- what kind of tenant does this property attract?
- what’s the real maintenance burden on older housing stock?
- how management intensive is this neighborhood?
I also think some investors underestimate how much “cheap cash flow” can become expensive operationally over time if the housing quality or location is weak.
That said, ignoring affordable housing demand entirely is probably a mistake too. Especially in markets with:
- housing shortages
- low entry prices relative to rents
- strong family demand
- and stable occupancy trends.
Personally, I think the best Section 8 operators tend to approach it more like a disciplined housing business than a passive-income shortcut. The ones who usually struggle are the ones buying purely off spreadsheets or social media clips without understanding the day-to-day operations behind the asset.
Section 8 Launch52 Reviews - Investor · CA · Member since 2023 · 196 posts · 107 votes4mo
I have 16 properties with 13 of them them being Sec 8 and 3 non sec 8. Both types provide on average over a 5 year timespan pretty similar cash flow for me when considering all aspects of being a real estate investor. I think all the factors have been discussed on this post ad nauseum so I won't get into weeds. My properties are all paid off and my net cash flow after prop tax, insurance, maintenance and management fees, move out etc. etc. per house is about $2000/mo on either type of renter. Easy money either way. Don't worry. 😊
- 4moRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @Tim Bee:
I have 16 properties with 13 of them them being Sec 8 and 3 non sec 8. Both types provide on average over a 5 year timespan pretty similar cash flow for me when considering all aspects of being a real estate investor. I think all the factors have been discussed on this post ad nauseum so I won't get into weeds. My properties are all paid off and my net cash flow after prop tax, insurance, maintenance and management fees, move out etc. etc. per house is about $2000/mo on either type of renter. Easy money either way. Don't worry. 😊
always like getting perspective on locations for section 8. where did you buy and would you still buy in that market? 2k sounds like a tier 1 city on section 8 and 4br.
Section 8 Launch52 Reviews - Investor · CA · Member since 2023 · 196 posts · 107 votes4moI usually buy newer homes (10-20 years old max) that are distressed in some way. I find those can be the best deals. All cash of course. But once rehabbed they look really good. I tend to search in Central Cal, where you can find some sweet deals. Yes, I am always looking for more. Rents have really gone up a lot in the last few years as I am sure you know and I like to get them in the nicer areas of the city. I am no real estate pro. I just work in the medical field and like looking for properties to buy. It's a fun hobby.
Quote from @Robert Ellis:
Quote from @Tim Bee:
I have 16 properties with 13 of them them being Sec 8 and 3 non sec 8. Both types provide on average over a 5 year timespan pretty similar cash flow for me when considering all aspects of being a real estate investor. I think all the factors have been discussed on this post ad nauseum so I won't get into weeds. My properties are all paid off and my net cash flow after prop tax, insurance, maintenance and management fees, move out etc. etc. per house is about $2000/mo on either type of renter. Easy money either way. Don't worry. 😊
always like getting perspective on locations for section 8. where did you buy and would you still buy in that market? 2k sounds like a tier 1 city on section 8 and 4br.
- 4moRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @Tim Bee:
I usually buy newer homes (10-20 years old max) that are distressed in some way. I find those can be the best deals. All cash of course. But once rehabbed they look really good. I tend to search in Central Cal, where you can find some sweet deals. Yes, I am always looking for more. Rents have really gone up a lot in the last few years as I am sure you know and I like to get them in the nicer areas of the city. I am no real estate pro. I just work in the medical field and like looking for properties to buy. It's a fun hobby.Quote from @Robert Ellis:
Quote from @Tim Bee:
I have 16 properties with 13 of them them being Sec 8 and 3 non sec 8. Both types provide on average over a 5 year timespan pretty similar cash flow for me when considering all aspects of being a real estate investor. I think all the factors have been discussed on this post ad nauseum so I won't get into weeds. My properties are all paid off and my net cash flow after prop tax, insurance, maintenance and management fees, move out etc. etc. per house is about $2000/mo on either type of renter. Easy money either way. Don't worry. 😊
always like getting perspective on locations for section 8. where did you buy and would you still buy in that market? 2k sounds like a tier 1 city on section 8 and 4br.
I've heard similar things not for central cali but more Bay Area that last few years has gotten unrealistic in particular pockets of that part of california
Section 8 Launch52 Reviews
- 4moLeroy K. WilliamsPro MemberProperty Manager · Southfield Mi · Member since 2018 · 183 posts · 172 votes
As someone who has managed hundreds of Section 8 properties for the last 14 years in Detroit MI, I can confidently say that Section 8 management is not necessarily "Property" management it is actually "People" management. The reality is that the inner city provides investment opportunities (Price, inventory, scalability) that other areas cannot offer, that said the opportunity comes with thorns.
Many OOS investors just cannot climb into the right frame of mind when approaching low-income neighborhoods in major cities. As a PM embedded in this environment, I find it fascinating that people will come to class D communities and attempt to overlay Class A and B strategies where they do not fit. This often leads to frustration and confusion. If you want to succeed you have to wrap your mind around the reality that this is a different environment with different rules and if you are not native it would be best to hire a team who understands the neighborhoods while also understanding your real estate goals.Section 8 absolutely requires a local team.
- 4moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Leroy K. Williams:
As someone who has managed hundreds of Section 8 properties for the last 14 years in Detroit MI, I can confidently say that Section 8 management is not necessarily "Property" management it is actually "People" management. The reality is that the inner city provides investment opportunities (Price, inventory, scalability) that other areas cannot offer, that said the opportunity comes with thorns.
Many OOS investors just cannot climb into the right frame of mind when approaching low-income neighborhoods in major cities. As a PM embedded in this environment, I find it fascinating that people will come to class D communities and attempt to overlay Class A and B strategies where they do not fit. This often leads to frustration and confusion. If you want to succeed you have to wrap your mind around the reality that this is a different environment with different rules and if you are not native it would be best to hire a team who understands the neighborhoods while also understanding your real estate goals.Section 8 absolutely requires a local team.
So true!
Logical Property Management4.9459 Reviews
- 4moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Joe Stafford:
Looking for some real-world feedback from investors currently doing Section 8 in Indianapolis.
I’ve been heavily analyzing long-term rental markets and Indy keeps popping up because of the combination of:
- Lower entry prices
- Decent rent-to-price ratios
- Landlord-friendly reputation
- Population stability/growth
But I’m trying to separate the spreadsheet numbers from reality.
For those actively investing there:
- How has your experience been with Section 8 tenants overall?
- Are rents actually coming in near payment standards consistently?
- Which areas/zip codes have worked best for you?
- Any areas you would absolutely avoid?
- How difficult is it to keep properties occupied?
- What kind of cash flow are you realistically seeing after TRUE expenses (maintenance, turnover, vacancy, PM, capex, etc.)?
- Are inspections and the housing authority reasonable to work with?
- Any major surprises compared to other markets?
My current buy box is generally:
- 3+ bed SFH
- Around $80k–$150k purchase price
- Looking for stable long-term holds, not appreciation speculation
- Prefer properties that can still produce meaningful monthly cash flow after fully underwriting expenses conservatively
I’d appreciate honest feedback — good or bad. A lot of markets look great on paper until you actually start operating there.
Thanks in advance.
@Joe Stafford
Indy can definitely cash flow better than a lot of coastal markets, but your point about separating spreadsheet numbers from operational reality is spot on. Property management quality, tenant screening, maintenance reserves, and neighborhood selection matter a lot more than people think with Section 8 rentals. Conservative underwriting usually wins long term. - Realtor · Indianapolis, IN · Member since 2016 · 52 posts · 26 votes3mo
Ooofff, Section 8 is a beast. I would suggest running your business with regular tenants and navigate Section 8, only if you have to. I have had owners be without payouts for months due to issues within the government. They will sometimes send out info they will not be allowing increases. The communication is slow to horrible. The caseworkers are hard to get ahold of. The inspections are inconsistent at best and good luck getting ahold of anyone if you have questions about repairs. We had a situation where their system reverted a tenant back to the owner and stopped sending us communcation in regards to the property. We were still getting the payments so we had no idea. They had an inspection at the property and required items to be repaired. Since we were not getting any of this communication, we were not at the inspection nor were the repairs done. The property went into abatement (no payments - which is how we figured it out). They refuse to pay the abatement time even though they admitted it was their systems error. As soon as we knew about the repairs, we had it fixed within a few days. It took us 6 weeks to even get ahold of the inspector to get it reinspected... and they refuse to reimburse. Just really be cautious... It can be good returns, but there is a lot of risk.
- Member since 2026 · 4 posts · 1 vote1mo
The short answer: IHA payment standard is not street rent, and it is not automatically what you collect.
Three different numbers get mixed together on Indy spreadsheets:
1) HUD Small Area FMR by ZIP (FY2026). ZIP 46201 is 2BR $1,280 / 3BR $1,660. That is 19% below the Indianapolis-Carmel metro 2BR FMR of $1,582. Two ZIPs in the same city are not the same voucher cap.
2) IHA’s published voucher payment standards (what they start HAP from). Right now IHA lists 2BR $1,619 and 3BR $2,110. That can be higher than ZIP SAFMR on the east side. It is still not the check.
3) Rent reasonableness + tenant share. IHA has to compare against unassisted comps. FMR is gross rent (rent + utilities). In year one the tenant generally cannot pay more than 40% of adjusted income. If street 3BRs in that ZIP are $1,200, you do not get $2,110.
So "are rents coming in near payment standards" — only if the unit clears reasonableness and inspection, and only at the ZIP and bedroom you actually bought. Markets that look great on metro FMR vs an $80k–$150k purchase often fail when you use the ZIP SAFMR and a real utility allowance.
IHA is a mandatory SAFMR PHA as of 2024, so underwriting the whole metro is the usual way people get burned. Pull the ZIP, then call IHA for the adopted percent.
- 1moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 648 posts · 473 votes
Joe, I'll give you the operator's answer, because the top-voted reply in this thread deserves a counterweight from someone whose actual money is in this asset class. Memphis, not Indy - but few hundred doors since 2003, most of them voucher tenants, running my own crews and management. Different city, same program, same federal rules.
First, on the rhetorical questions above about what kind of people voucher holders are: my longest tenancies - five, eight, some past ten years - are voucher families. Nurses' aides, warehouse workers, grandmothers raising grandkids. The voucher waitlist in most metros is years long; the people who make it through that gauntlet guard the voucher carefully, because losing it means losing stable housing. That's not charity talk, it's an incentive analysis - a voucher tenant has MORE to lose from a lease violation than a market tenant does. My damage rates between voucher and market tenants are statistically indistinguishable; my average tenancy is meaningfully LONGER on the voucher side, and in a business where a turnover costs two to four months of gross rent, tenure is the whole ballgame.
Now your actual questions, honestly:
Rents vs payment standards: this is THE underwriting question and almost nobody checks it right. Pull the housing authority's payment standard for each zip and bedroom count and compare it against real market rent. In the right zips the standard pays at or above market - that's where the strategy works. In the wrong zips it pays under, and you're taking the program's paperwork for below-market rent - worst of both worlds. Indy-specific homework: check whether the authority is on Small Area FMRs, because that changes the zip-by-zip picture completely.
Occupancy: with a deep waitlist, a unit that passes inspection has a line behind it. My real vacancy risk is inspection turnaround time, not demand.
The honest downsides, because there are real ones: first lease-up is slow - inspection scheduling, paperwork, 30-60 days before the first HAP payment lands, and you need reserves for that gap. Inspections will fail you for a missing GFCI or peeling paint, so build to the standard once and maintain it. And the housing authority is a bureaucracy - operators who thrive treat its timeline as a known input, not a recurring surprise.
The biggest variable isn't the tenant or the zip - it's the PM. When you interview Indy managers, ask exactly two numbers: what percentage of their inspections pass first time, and average days from vacancy to first HAP payment. Real voucher operators answer instantly. "Section 8 friendly" marketers stall. That difference is your entire return.
Your buy box - 3+ bed SFH, $80-150K, conservative underwriting, no appreciation fantasy - is precisely the profile this program rewards; 3-bed vouchers are the deepest demand pool in every market I know. Run the payment-standard spread on your candidate zips before anything else and the spreadsheet-vs-reality gap you're worried about mostly closes.
- 1moHarvey LevinPro MemberProperty Manager · Indianapolis, IN · Member since 2012 · 208 posts · 159 votes
indy is a wild card roght now. inspections have been having delays so very important as mentioned to pass a move in on the 1st try. my contractor has done this for over the last 7 years. however inspection staff has been turning over so much and with new inspectors I do not know if that streak will continue. getting paid the first payment has not been an issue. depending on day of move in it can be on the 1st of next month or the following month so long as all paperwork is turned in fast and correct. i placed my 1st Sec 8 tenant in Indy in 1985 and at 1 time had over 600 Sec 8 tenants in houses. now i only manage my personal portfolio and down to 42. slowly selling my way into retirement lol. i use the indy zipcode gross rent suplied by IHA not HUD. IHA curently pas an extra 10% that is not reflected on the HUD website and the utility allowance is very low which increses the rent to landlords.Also, if a tenant with income applies the rent can exceed the zipcode as the tenant portion can be as high as 40%. there still has to be market rent reasonable but it can push a x bedroom voucher holder up 1 additional bedroom size. my management company specialized in Sec 8 only but now tjere is a void in the market for PM companies that truly understand the "Indy" system and the ins and out of the HAP and NSPIRE.
- 1moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 648 posts · 473 votes
Harvey, this is the most valuable reply in the thread - forty years and 600 Section 8 tenants in Indy at peak is exactly the ground truth Joe was asking for. Three things you said deserve underlining. First, IHA currently paying above the published standard: this is why I tell people to call the authority instead of reading the HUD site - published data lags what authorities actually approve, in both directions. Second, the income-tenant mechanics - tenant portion up to 40% letting the contract rent exceed the zipcode number, plus the extra-bedroom sizing - is inside knowledge most people on this forum have never heard. And third, your "void in the market for PMs who truly understand the Indy system" is the honest answer to Joe's original question: the program works; the constraint is operator depth in your chosen market.
Joe, if you're still weighing Indy - Harvey just handed you your PM interview script. Ask any candidate to explain IHA's current payment practices versus HUD's published numbers, and NSPIRE versus the old HQS checklist. The ones who answer like Harvey did are the ones who'll protect your first HAP payment timeline.
Tim, that $2,500 voucher vs $2,000 market spread is the entire strategy in one sentence. Which market, if you don't mind sharing? California spreads surprise people - the payment standards in some counties out there are the highest in the country and nobody talks about it.
- 1moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 648 posts · 473 votes
Tim, that tracks - the Central Valley is one of the quietest strong voucher markets in the country: payment standards keyed off FMRs that reflect California housing costs, set against Valley purchase prices, plus demand deep enough that units lease before escrow closes, exactly as you describe. Your $2,500-vs-$2,000 spread on the same product is the whole thesis in one line.
On the worry - I'll skip the politics and give you the practical version: California already runs statewide source-of-income protection, so voucher participation there isn't optional for landlords the way it is in Tennessee or Indiana. The variables that actually move your returns are operational: how fast your authority turns RFTAs around, and whether payment standards keep pace at annual redetermination. Watch those two numbers and you'll see any real change coming twelve months before it shows up in a headline.
And since you're sitting on both product types in the same market: if you ever pull your average tenancy length on the Sec 8 side versus the market side, post it here. That's the number this whole forum argues about with anecdotes, and you're one of the few people positioned to answer it with data.
- Investor · CA · Member since 2023 · 196 posts · 107 votes1mo
Got it. I'll watch out for that. As far as length of tenancy for sec 8 vs non section 8: first I have 16 houses paid off and have been doing this for 20 years. My experience is that sec 8 have been staying about 7 years on avg. I have some that have stayed well over 10 years. They don't move out when the rent is raised every year. Mostly when they do vacate they do so because they move out of the city, get a job that pays too well or they voluntarily give up their sec 8. Sec 8 rents are top market rates which is so awesome. You can get the same rent for an old ugly house that you can a brand new construction home that is the same size and beds and baths. As far as non sec 8.... The rent amount initially starts out about par with sec 8. Over the years I've noticed they stay maybe 4 years on avg. Also if I raise the rent every year to market rate they tend to stay maybe 3 years on avg and then bail. Non sec 8 are picky when it come to rent raises. When the rent goes up they move out. So why not rent to all sec 8 then?? Well non section 8 tend to not complain and not break stuff. They care about their credit and seem to be afraid of evictions and late payments. They sometimes move in super quick and that saves me a few weeks of no rent. When they do eventually move out the house is only slightly messed up. So profit wise over the course of 10 years when comparing both on AVG, I'd say sec 8 wins. I'd say they win by 10 percent cash in my pocket on a 10 year time line.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes1mo
I have now had two section 8 tenants. One never paid her small $120 portion and I had to call her every time, she ended up paying maybe around a third of what she owed when left as I threatened to report her. She left the place dirty with some abandoned furniture and I had to pay a trash hault out but not horrible. Another sec 8 tenant I had they paid her full portion but when she left the place had tons of garbage, broken beds abandoned and was thousands in turnover. I think the 2nd one illegally was renting bedrooms out too, as had way more people there then was on her lease. My handyman told me was 8 people in the place one day. The first one also had more people there then was on the lease.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.