Section 8 - From the Landlord's Side

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Section 8 - From the Landlord's Side

Aiden AvtgisBusiness Member
Real Estate Agent · Cleveland, OH · Member since 2024 · 37 posts · 22 votes

I've seen a lot of posts recently regarding Section 8 - some needing help, others critical of it. Section 8 gets a bad reputation it mostly doesn't deserve. Here's what it actually looks like from the landlord's side:

  • Part of the rent is paid by the housing authority, straight to the owner, every month. The tenant pays their share.

  • You still screen your tenants. Section 8 is a payment program, not a tenant assignment. Landlords choose who they rent to.

  • The property has to pass an inspection. That's a real benefit. It means the unit is up to a baseline standard before anyone moves in, which protects the owner as much as the tenant.

  • Rents follow the local housing authority's standards, so the numbers can be underwritten up front instead of guessed at.

  • It isn't hands-off. It just takes someone who knows the inspection process, the paperwork, and how the local housing authority works. After going through the process once, you'll be much more confident in other deals moving forward.

What has been your experience with Section 8?

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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    1d

    My experience was as follows

    Good: filled up occupancy with paying tenants, much higher occupancy than we would have had without Sec 8

    Bad: Could not make any money even at almost full occupancy because (1) amount of management attention needed, (2) amount of damage to property by tenants, (3) drive by shootings involving tenants, (4) dealing with domestic violence 2 or 3 times per week, continual police visits due to drug activity.

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 667 posts · 483 votes
    1d

    Both of these experiences are real, and the difference is almost always screening and systems.

    Section 8 is a payment program, not a tenant program — Aiden's right that you still choose who you rent to. Don's bad experience is what happens when that part gets skipped. I've run hundreds of Section 8 houses in Memphis. The voucher pays like clockwork; the tenant still has to pass my screening like anyone else.

    What makes it work at scale: strict screening (their portion of income verified, landlord references, no evictions), an inspection-ready house before you list it, and knowing your housing authority's process cold. My 3BRs rent $1,395-$1,950, and the housing authority portion hits the account every month without a phone call.

    Section 8 doesn't remove landlording. It removes the "will the rent show up" question. The rest is still on you.

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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    20h

    @James Jones , what percentage of your S8 tenants pay their full portion each month? What is the cost, in time and legal fees, to complete an eviction?

    I fully agree, screening thoroughly and proper rental prep minimize issues, but certainly does not eliminate them, so it is important to budget for those costs.

    At one point, I had over 100 S8 tenants under management, and the best solution we arrived at was hiring the attorney next door and file evictions on every single tenant that owed over $75 (the attorney's filing cost at that time). We did so twice a year...once in early May, when tax refunds were coming in, and again in early October, before holiday spending sprees. This effort was rewarded with significant attitude adjustments, and a better payment record for most tenants.

    If you dare to complain to S8 about tenant issues, whether illegal activity, non-payment of their portion, or whatever, S8 is likely to just boot the tenant from the program...leaving you with a non-paying tenant and usually a lengthy and costly eviction at your expense. It is a fallacy to believe the tenants are afraid of losing their vouchers, they simply do not think that far ahead. All they need to do anyway is go to the next county and reapply. There is no "list" of banished troublemakers...

    Another issue with regard to inspections, is the fact that some Inspectors are OCD about certain elements. I have had more than one that used a tester on every single outlet, even hard to get at ones, so you must be thorough. The other problem is renewal inspections. If you or your rep is not present at the inspection, they will charge what are obvious tenant caused issues as "Owner responsibility". You need to be there with your copy of original move in and photo roll to challenge them on the spot.

    Lastly, transfers when you buy or sell a property can be problematic. I had one where the seller never reported to Housing that he was selling. He collected HAP payments two or three months after the sale, and S8 said they could do nothing about it. They did eventually start making payments to the new owner after he submitted paperwork and copy of the deed, but he lost almost 2.5 months of rent that the OOS seller refused to pony up.

    Bottom line, the income is not guaranteed, contrary to modern mythology.

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  • Nathan FisherBusiness Member
    Property Manager · Cleveland, OH · Member since 2020 · 312 posts · 264 votes
    20h
    Quote from @Aiden Avtgis:

    I've seen a lot of posts recently regarding Section 8 - some needing help, others critical of it. Section 8 gets a bad reputation it mostly doesn't deserve. Here's what it actually looks like from the landlord's side:

    • Part of the rent is paid by the housing authority, straight to the owner, every month. The tenant pays their share.

    • You still screen your tenants. Section 8 is a payment program, not a tenant assignment. Landlords choose who they rent to.

    • The property has to pass an inspection. That's a real benefit. It means the unit is up to a baseline standard before anyone moves in, which protects the owner as much as the tenant.

    • Rents follow the local housing authority's standards, so the numbers can be underwritten up front instead of guessed at.

    • It isn't hands-off. It just takes someone who knows the inspection process, the paperwork, and how the local housing authority works. After going through the process once, you'll be much more confident in other deals moving forward.

    What has been your experience with Section 8?

    1. Except when tenants don't. The resident portion changes regularly, and some simply cannot comprehend they have top pay a portion. Then you have a 30 day notice period to start an eviction, while you cancel section 8 payments. adds 6 weeks to an eviction. Oh and good luck successfully sending a tenant to collections
      3. The inspection timing is hard. It usually takes 6 weeks to even get a move in inspection date, with an 8 hour window. then with annual inspections Tenants can't be trusted to be on site, so you have to be there. Another 8 hour loss, and that's assuming the inspector doesn't cancel.

    1. The number on CMHA's website is not what you get. That number changes based on utilities, area, and the whims of the org. Even assuming the tenant pays all of their portion.

      Ultimately, Section 8 is a net negative. The organization's rules, policies and implementation make it too problematic. The tenants are the same overall as regular tenants with more work, more risk, and barely more rent to cover.

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