Why Won’t You Rent to Poor People?


It just so happens that I’ve been writing a lot lately about the role of Section 8 in our business, and my articles seem to have stirred-up a fair amount of conversation, specifically the article entitled Why Real Estate Investing May Not Be a Good Business 10 Years From Now from about a month ago which received an obscene 226 comments…  Wow – I guess people have a few opinions when it comes to the housing subsidy; unfortunately most of the opinions are not good!  Let’s see if we can clear some things up.

I am going to indulge myself in a bit of “straight talk” in telling those of you who will not consider renting to a tenant qualified with Section 8 that you are wrong – flat out!  Let me ask you – when the hell did a high-paying job or presence of money become indicative of character? Because this is precisely the implication here.

You are so quick to judge and assume that all people who get help are leaches, bums raping the system.  There are a lot of those – sure there are, and I’m not suggesting you rent to them.  I’ve turned over 14 units in the past few months and only one of them ended up rented to a Section 8 tenant.  Why did I rent to her – because having checked her out I’ve made the call that she is a good person, and I don’t turn away good people simply because they can’t earn enough to qualify for my units and are forced to get help from Section 8…

My point is and has been:

There are good tenants who are subsidized and there are bad; there are good tenants who make good incomes and there are bad.  I kicked out 4 people in 6 months in that 10-plex that I bought in February and none of them were Section 8.  Many of us are quick to draw a parallel between a person receiving the subsidy and them being an irresponsible, lazy bum.  This has not been my experience.  Let me tell you a couple of stories…

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Section 8 Tenant

The tenant I mentioned above is my first Section 8 tenant in seven years of being a landlord.  So far everything looks top notch.  My rents are due on the 1st and are late on the 6th.  She deposited her portion into my bank account on the 4th, which is when she gets paid.  She texted me, as I asked her to do, making me aware that the money had been deposited.  And naturally Section 8 wired their portion, which by the way, happens to only add up to about 20% of the total rent – the tenant is carrying most of the water on this one.  She works a lot and she and her daughter are quiet and respectful by all accounts.  In short, she appears grateful to be there and there are no indications of any problems thus far.

On The Other Hand…

I had just finished remodeling one of the units in the 10-plex, and received an application.  It was a good application.  The applicant had no evictions, bankruptcies, foreclosures, or any other substantive blemishes on his record that I could reasonably pick at.  He works for a big employer earning a salary of around 70k, which is obviously enough to buy a house let alone rent one of my units.

I approved the application and we set up an appointment to sign the lease.  Do you think he showed up?  You would think that a person who has his stuff together enough to hold onto a 70k job would have the common decency to call…

And, if you can believe it, about a week later the idiot tried to call me on another unit; needless to say I had a bit of fun on that call…

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?

Fast Forward a Few Days

I received another application on the same unit.  This guy indicated, and I verified, full time employment earning close to $20/hour.  He pulled up to his appointment in a newer model vehicle that seemed well taken care of.  In short, all of the gauges pointed in the right direction, so I approved the application.  Without boring you with the whole story, let me simply tell you that 3 days into his occupancy I took the eviction packet to my attorney.

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?

As it turned out, I did not go through with the eviction because the tenant did come current in the end and I chose to let things be – this time.  I am not holding my breath for the future on this one though.

And Then There Was the Nurse!

She was a licensed registered traveling nurse.  I spoke to her superior and saw the pay stubs – more than enough.  She looked clean; in retrospect much too clean…

I later found out that local drug enforcement unit had my rental house under surveillance because she apparently had a hobby of drug trafficking.  As you can imagine an eviction took place – have you ever cleaned cocaine out of a sewer line…?

Question: Are you still committed to the notion that capacity to earn high income presumes emotional stability and strong moral fiber?


Indeed, ladies and gentlemen, income is a very poor indicator of what’s in one’s soul.  Section 8 is a government program which subsidizes a portion of rent for people who qualify based on insufficient income.  Personally, I will not voluntarily rent to someone who is healthy and able to work but does not; call it a matter of principal.  But, I have no problem with someone receiving a subsidy if full-time employment is not enough to live with basic human dignity.

Granted, the government is not very good at weeding out abuse which results in a lot of unscrupulous people taking advantage of this program.  This is unfortunate, but your job as a landlord is to discern the good apples from the bad, and money is only about 15% of the equation.

What do you think; are you sticking to your guns of NO SECTION 8?

Photo: Thomas Hawk

About Author

Ben Leybovich

Ben Leybovich has been investing in multifamily residential real estate since 2006. His area of expertise is creative finance. Ben works extensively with private as well as institutional financing. Ben is a licensed Realtor with YOCUM Realty in Lima, Ohio. He is also the author of Cash Flow Freedom University and creator of a cash flow analysis software CFFU Cash Flow Analyzer.


  1. Ben, It seems you may be making the assumption that a decision not to entertain Sect 8 renters is based on a preconceived notion about their quality, as a renter or as a person. My reasoning for not playing the Sect 8 game is that I simply don’t agree with most Gov’t programs and do not accept the pervasive influence of Gov’t in areas where they have no business. I will not play a part in any of these programs because by participating, I would be condoning, and I would become part of the problem.

    • Hey Steve – the entire monetary system and fiscal policy is fiat. Why stop at not condoning Section 8, just get back to gold coins my friend. Or, is there a line in the sand whereby government is OK on one side but not on the other – I’m confused…

      • Please, Ben. Sure, we could could go down that road… but it will take quite some time to do so. If you are truly confused, let me clarify as succinctly as possibly. Our Federal Gov’t was not designed, nor was it intended, as a vehicle to create a permanent dependent class. That is what it has become, and the existence of policies that create long-term dependency have served some quite well. I choose not to participate or help perpetuate any of it in the few cases where I actually have the opportunity to do so. You are free to participate in Sect. 8, but don’t delude yourself into believing you have not become a willful beneficiary of a broken system. As far as currency goes, since you brought it up, it IS clearly a cause for concern.

        • Steve – I understand your stance on this. I choose to be a pragmatist; It is what it is and if I can profit from it, I will. The tenant is qualified as any other, and if necessary will be evicted as any other. Simple math.

          To your overriding point – yes, it would be nice to get the government out. This is an impossibility at this stage in the game. We had a HUGE discussion on this topic here in that other article (the one with 226 comments)

          Thanks Steve

    • Steve, I believe that housing prices and rents are artificially inflated by excessive government regulation (including but not limited to zoning (supply control, minimum lot size, etc) and other land use restrictions); Thomas Sowell has shown that zoning redistributes income (generally upward) from renters to owners (Markets and Minorities, Chapter 7, 1981).

      In this context, I consider Section 8 to be an unfortunate and ham-handed attempt at addressing rental affordability yet one that falls far short of equalizing the upward redistribution effected by government housing regulation.

      • Terry – housing prices are inflated by the FED to engineer wealth for the middle class. That, and other monetary policy meddling, induces price inflation which pushes rents up, presuming there is sufficient velocity, which there is not yet but it’ll come.

        The only thing that doesn’t keep up is the minimum wage and therefore the only folks loosing are the minimum wage earners…

        • Zoning redistributes income from renters to owners, independently of what the Fed does.

          Pretty hard to argue with Sowell on this.

  2. Very well written Ben!

    There are sociopaths in all income levels. Just take a look at “Wall Street”.

    Definitely, income does not determine character. If you have no good values and morals making $ 20K/year you won’t while making a million/ year.

    I believe that people with section 8 deserve a chance and they need to be assess as individuals when it comes to their moral and character.

  3. Our business has a model that reduces risk, damage, and increases renewal rates and length of stay and we don’t depend on a Gov program that my fear is that will come to an abrupt end. Folks who say Sec 8 can’t come to an end, haven’t read Nasem Taleb’s Black Swan series of books and probably have a few surprises in their future.

    What’s the primary goal of being a landlord anyway? I feel it’s to be reliably paid rent as many months of the year as your business model allows while eating a few expenses as possible.

    Given that it’s income, lack of damage and repeat renewals is what we are after, why don’t we boil down why folks renew, pay on time and don’t damage a place?

    1) Folks have an important need to live in YOUR rental’s location. I ask specific questions to dig this info out of each prospect. “why do you want to rent this place?” I’ll never take someone who thinks it’s nice, cheap or they got tired of looking. That can all change.
    – Good schools. For us we only buy in great schools 5 or better. In fact most are in great schools 8 or better.
    – the 3 kids aren’t through high school yet so need to say and call this rental “home”.
    – Relatives live nearby.
    – there’s some other need that your house uniquely satisfies. I have one house with a day light basement that the renter has turned into a motorcycle repair shop. They will never move! And they are neat!

    2) Having in your written rental requirements, 2 incomes, one must be W2. For us income must be 4x more than rent from 2 incomes. Ideally the greater income is 3x more than rent.

    3) A history of making smart financial decisions. Of course no evictions but I pull a landlords credit report from “citi renter check”. I look for too much credit card debt. I don’t care about FICO. I look for 100% on time payments. Citi renter check shows on time payments and what’s in collections.

    It’s not in my written requirements but I don’t like newish low gas mileage vehicles like Detroit SUVs. To me in a lowish income renter this shows poor financial decision making. I look in the vehicle though, it has to be neat as a pin. Messy cars mean messy renters. I’ve seen this rule hold 100% of the time.

    Good luck. You don’t have to debate sec 8 or not, change your business model to be successful without sec 8 is my view. Even multi-family properties could be repositioned out of Sec-8. It starts with setting that as a goal.

    • Thanks for a thoughtful comment Curt!

      I agree with you – our assets should be desirable enough to attract stable paying clients. The notion of slumming to Section 8 is ridiculous. As I mentioned in the article, I’ve turned over 14 units in the space of a few months and only 1 is Section 8. Not that I’m opposed to more, but I certainty don’t need Section 8 in my business. This is a choice, which is what this article is about – think about this.

      Thank you so much Curt!

      • Ben I had to circle back and say that my comment wasn’t what I intended to say, I was last second affected by a prior anti-sec 8 comment. I’m sorry for my rant. I’ve read all of Nassimm Taleb’s swan books. His last, Anti-fragile might be the best. This blog post refers to Anti-fragile

        The reason why Anti-fragile is relavent even critical in a low income rental market is that you are MUCH more likely to have renters get a speeding ticket, have a child need an out of pocket medical expense etc then not be able to make rent.

        I laud and want to acknowledge a comment you made, that you are re-assessing your view of the path folks end up taking and renting to poor is part of your compassion. I hope to be in your shoes some day!!!!

        Near term for our business though, we have to be extremely conscious of the fragile corners of various strategies and choose the path that is least likely to run off the tracks.

        I applaud your comment that poor people can be good renters too. I add to others that you need to consider your business rules from a Fragile vs Anti-Fragile perspective. In our business, we don’t have enough Anti-fragile income to afford taking on a model that may be harboring fragile (risky) aspects. Yet that is.

        FWIW my view of the sec 8 Black Swan event, is where a catastrophic government event causes sec 8 vouchers to be canceled or the checks to simply to not be auto-deposited. Hey can one imagine such an event given the current federal gov issues? I hope all can say Yes. This could happen on a State or County basis. So what if half your tenants where section 8? Could you take the hit of half your income stopping?

        Folks didn’t think this could happen in 2006 when alot of rentals turned up empty due to everyone who could walk got a mortgage. LOL

        Think about your business risk from all sources, is my point.

        • Great comments Curt. I really like your focus on strategy and risk management.

          I only disagree with your neat car test. My truck (which I use when rehabbing property) is currently trashed. My house is kept very neat though, mostly thanks to my wife. So I don’t think that holds 100% of the time.

        • Curt – 1 Section 8 tenant (even 2,3, or 5) out of a portfolio is not fragile if you subscribe to this which I do not. I recently spoke to a big time landlord (hundreds of units at different locations) and he told me that he not only noticed that Section 8 tenants are not any more troublesome that any other, but he intentionally allocates certain number of units toward Section 8 – he likes knowing the money will be there; it puts a foundation underneath his CF. So you see, it’s all in how you look at it lol

          Thanks so much!

  4. Ben, I think I see another 226 comments coming your way on this one! Thank you for this post, which is thought-provoking and well reasoned. One can only hope that those who need to hear its message will actually hear it.

    I have an investor friend who conducts the bulk of his business renting to Section 8 tenants. I love his business model – he rehabs his buildings beautifully (w/in reason, of course – they *are* still rentals … and note that I did NOT differentiate between a rental and a Section 8 rental! They are rentals, period.) and provides his tenants with a better product than they’ll find anywhere else. He treats people with respect while still operating a highly efficient business, i.e. late is late and eviction notices go out right away. This guy is very compassionate but he’s no sucker – he does thorough background checks, he has a savvy (and street smart) property manager, etc etc.

    I think the bottom line is that you find what you are looking for. If you think Section 8 means scummy, bloodsucking tenants who game the system – you’re right. If you think Section 8 is just another option to find respectful, paying tenants – you’re right.

    (By the way, my investor friend took us on a tour of his projects in his Jag. So it’s kinda working for him.)

  5. While income level does not equate to character and/or lifestyle, there are strong correlations.
    Yes you will always find exceptions to the rule. But exceptions are exaclty that-, EXCEPTIONS! and they are in no way a counter to the validity of a rule.

    • I agree on the correlation. If you look for people who work for respectable employers who pay good wages, it is very likely those employers have already run extensive hiring background checks/annual drug test on their employees, which often weeds out the felons, drug addicts, and other deadbeats.

      If someone from my company or my bro-in-law’s company applied for a rental, I would already know a lot about them, just because of the quality of employees at both companies.

  6. This all points to my belief that good Property Managers are worth their fees. I have had section 8 renters since the 1970s, so I have a long history with them. My record is 24 years with the same Section 8 tenant. Sec 8 can be good and it can be bad. To make a blanket statement either way is being short sighted. All of my property managers have a set criteria for applicants and section 8 is NOT one of them. They do all the research and then send me a synopsis of the applicant and I make the decision, yay or nay.

    REI have the right to run their business any way they like as long as no laws are being violated, ie. race, gender, faith, and other protected class bias.

    As a side note, even though I am against most government subsidies, I see section 8 as a way to get some of my tax dollars back, and I would rather see my tax dollars used here instead of going to some African Warlord.

  7. Hey Ben,

    My reason for lack of interest in Section 8 rentals is because I would prefer not to rely on a government program; it has little to do with the clients, I agree that it is possible to find good tenants within Section 8. It’s the part about dealing with the administration that I find unappealing. Some landlords will do well with Section 8 and good for them, but it’s not the path for me right now.

    Hope that helps explain it. Best wishes in all your endeavors.

  8. Ben and my BP Family,
    I’m enjoying the discussion. Thank you. My comments are:

    1. Can you imagine for-profit solutions to housing low-income earners in a respectful manner. 2. Can you imagine a scalable, for-profit business that uses real estate investing as means to create personal wealth while serving the working poor?

    If not, you may wish to consider the self-imposed limits on your imagination and perspective.

    There is a world of possibilities out there waiting for entrepreneurs to find them. Just thought you’d like to know. :^)

    • Al,

      First of all, some of the folks reading this may not be aware of your stature in the game. Thanks for joining the blog as a weekly contributor – we will benefit from your perspective.

      Secondly, thanks for your comment. There is a lot of money to be made working with Section 8, presuming we can be pragmatic and leave certain ideology out of our decision-making process. It’s fine if people don’t want to play the game though – more for you and me 🙂

      Thanks Al!

    • As a lifetime low-income individual, I have found living with several roommates to be generally undesirable partly due to flaky roommates and the increased costs associated with them (e.g. when someone skips town etc the rest of us have to cover that person’s house expenses). While I rented a guest house (just like Kato Kaelin) for 15 years (until a health collapse and 18-month loss of income forced relocation to live with relatives), the rest of my adult life has been spent sharing housing with four or five or more roommates. I HATE IT!

      So I am obsessed with the idea of tiny (~400 or so sf) affordable one-person dwellings. I’d love to build some (absolutely no money to do so of course) on tiny (2500 sf) lots (of course zoning almost always requires much larger (and therefore unaffordable to the intended market) lot sizes, or see someone else build some. This could be achieved as a condo development, but that would defeat my purpose of making them affordable. (grumble grumble)

      If someone could pull off this sort of housing – especially with an affordable ownership option – I’d be very grateful.

  9. I have yet to have an experience renting to Section 8. On most of my properties, Section 8 will only pay X whereas market rent is X+Y, meaning that Section 8 only pays under market rent. So if you specifically want a Section 8 tenant, you have to either invest in the bad area of town, or you have to be willing to accept less than market rent and I’m not willing to do either.

    I have had Section 8 applicants apply, and even tried to rent to one once, but for a $1100 rental (without utilities), Section 8 said that they would pay $960 (if I paid utilities). On another one at $750 (without utilities), they would pay $725 (if I paid utilities). So in my case, what would you do? I would be literally LOSING MONEY to rent to a Section 8 tenant.

    • Section 8 subsidizes rent only up to the (median) FMR in your metro for the property size (1BR, 2BR etc).

      So if your metro median rent is $1000 and your unit rents for $1200, Section 8 would pay $700 (tenant pays 30% of subsidized rent) and the tenant would pay $500 (30% of the subsidized $1000 plus all of the unsubsidized $200).

      • I was told by the Section 8 office that the tenant could NOT pay more for the unit. Not sure if this was because $960 was what Section 8 was paying as they were paying 100% of the tenant’s rent.

        • And I think this was what Karen was referring to above about not liking to work with the Section 8 administration – rules like this. I rented to a Section 8 tenant for almost two years – got paid like clockwork, loved that. But the tenant did have to make up the difference between what my rental rate was and what Section 8 said it was (luckily Indiana allows that to occur).

          The other very irritating thing Section 8 does is mandate what repairs you must make to your rental, first, before the tenant can move in, and subsequently, every year thereafter. I’m not talking about repairs that affect the quality of life or enjoyment of the home either. I’m talking about seriously annoying, nitpicky repairs, ostensibly to justify the inspector’s existence.

          In the end, yes, I would rent to a Section 8 tenant again under the correct circumstances, but with eyes wide open about the amount of control I am relinquishing by doing so. Bottom line, Section 8 is a business decision, and I wouldn’t turn someone away just because they are in the program.

  10. I currently have six single family homes with section 8 tenants. Probably rented to over 25 different section 8 tenants over the last 10 years. I agree with most of what you had to say, but…….

    Every section 8 tenant I have ever had has ended badly. Every one. Those that have not ended badly are still tenants. When it’s working, it works, but the moment something tips, it comes crashing down hard.

  11. catrina brooks on

    Good article Ben.
    Thanks for calling it the way you see it. Most of the negative comments have responded that Section 8 either does not support their business model. or that they are anti-government assistance. Both sentiments are within each camps rights. However, very few will admit their preconceived, stereotypical beliefs about lower income socioeconomic groups. Many investors are reluctant to evaluate candidates on an individual basis which could prove just as lucrative as middle class patrons for some investors.

  12. Ben,
    Another thought provoking article!! I don’t often have to fill vacancies and the few times I have had a section 8 tenant apply, I have had another more qualified applicant. I wouldn’t be opposed to a section 8 tenant that I had a good gut feeling about as you mentioned. The hesitation that I do have is the increased regulation which is managable because I keep my properties in good reair but most importantly is the question of the dependability of the program going forward. We have so many folks calling for government spending cuts because they think the government needs to run like a business. This is dangerous and I do not know how the process of making cuts to the programs. I guess I would look at it similiar to someone who is dependant on alimony or child support. There is nothing wrong with that in the least but if they don’t get their payment because the payee lost their job then we are both up for a tough conversation.
    I guess my question to you would be… If you had a choice between two equally qualified applicants with whatever adjustments you normally make for a section 8 voucher, you just feel they will be equal in terms of ability to pay and both pass your gut check. Who do you give preference to?

  13. Not sure if BP keeps tracts of posts, but Section 8 must burn the stats across the board.

    Really it is simple the program is a dual welfare system; the landlord gets a higher then normal rent with much less management (chasing tenants). I would garner most of the homes rented section 8 would not make economic sense to rent without the program.

    For the tenant another welfare program, only need to put oneself into some level of poverty and the taxpayer picks up the tab. Not heartless here, just single mothers for the most part are no longer widows.

    I have offered my end to two of the largest contributors of poverty that creates an artificial need for Section 8 and most welfare programs.

    The first is drugs, I could end all illegal drug use in a month, as well as all alcoholism among those currently receiving or seeking any form of welfare, or entitlement of any kind.
    Require all to pass a drug or alcohol screening, they fail, no check period. Just assuming the assistance money is not to be used for the above substances.

    The second is single motherhood, all needs of the mother and baby will first be born by the father, no i.d. on who the father is, no assistance. Next the parents of the mother would be required to pay for her upkeep. The same drug and alcohol test would need to be passed.

    And there you have it the end of illegal drugs and single mothers.
    I ran this idea by a few of my tenants all agreed this would solve the problem.
    However they all said they would still seek assistance as working a 9-5 job is not for them.
    Go figure, I will have to brainstorm how we might induce the poor to get a job other then voting Democratic.

    • Haha – I know. It seems that since I wrote that first one about a month ago, everyone has jumped onto the Section 8 bandwagon…

      Let me try to poke a whole in your argument. What if the person actually works full time plus over time and still only manages $1,500/month of income and therefore utilizes the program? This obviously is not a leach…

      Thanks so much Dennis!

    • And what about single mothers whose husbands were in Iraq or Afganistan and who died for their country? Or died for any reason altogether?

      And what about single mothers who divorced from abusive husbands?

      I think it’s a slap in the face to single mothers everywhere to make them seem like less of people because of their circumstances. What punishment would you dole out to single fathers???

      • If a spouse dies while on active duty, SGLI (servicemens group life insurance) pays out a substantial amount. Enough so to easily buy a house in almost any market in the country.

        • Aaron – I didn’t know this and happy to hear it. The only reason we are able to do what we so is because a few among us choose to stand on that wall…

          BTW – excellent podcast 🙂

      • Dawn – I agree with you, but a little bit of background:

        The way the federal law is written is that the single mothers are only eligible for assistance if the father is not in the picture. In other words, if the father stuck around the assistance would be gone. This, naturally creates moral hazard in several ways:

        1. Some women perceive having babies as a business as they get more assistance for each child;
        2. The family unit is compromised – it’s either having dad around or having money. We know the choice many make.

        The feds are at fault here. Unlike most people who say get rid of the subsidy all together, I say give the subsidy but do not penalize a woman for having a father figure in the baby’s life. I think that if we keep the family unit together, we’ll fix a lot of the problems in our society. That’s my thoughts anyway…

        The tenant I placed is a single mother who is doing the best she can for her daughter and herself. If it doesn’t deduct from my bottom line, why would I not help her…

    • Also, the property we have is in a small southern farming community. The majority of folks around here do not make the kind of money that allows them to walk around with disposable income. The Section 8 program gives these folks a chance to actually find affordable housing on the incomes that they make. I believe excluding someone simply because they are on Section 8 is taking a short-sighted approach to your business. Of course, people have the right to run their business however they see fit (within the boundaries of the law). However, if the program can be a financial benefit for the landlord and a security benefit for the tenant, then you should at least consider it as viable option for your business. I am in the process of making one of our SFRs available to Section 8 applicants right now. It will be our first one. And I am interested in finding out what the final outcome will be…

    • Dennis, this statement is area dependent:

      “Really it is simple the program is a dual welfare system; the landlord gets a higher then normal rent with much less management (chasing tenants).”

      In California, when I first started my rei career in 2000, that statement was true. When I later branched out to investing in Indiana in the late 2000’s, the Section 8 there set the rental rate and then paid a % of that rate. Well, their rate was less than what mine was (kind of convenient), so the tenant, whom I did end up renting to, had to make up the difference (which they allowed, another area dependent regulation).

      In any case, I think the most significant incentive for landlords renting to Section 8 folks (higher rent) is slowly being reduced in certain states. Counter-intuitive, but it is a government program, after all.

  14. I’m of the opinion that Section 8 tenants need access to safe, clean living accommodations. I have chosen a strategy centered around building a cash flow positive portfolio of buy and hold MF-properties that include renting to lower income and section 8 tenants. My property manager (like Ben I believe) has a number of indicators that determine if a tenant will become the successful applicant for one of our units and not solely (or heavily) weighted just on income, albeit income is one of the factors we look at.

    One of the benefits I have found with investing in neighborhoods that are considered lower income (or for that matter entire towns that are low income) is that the competition for properties is lower than I would have expected. My experience is that any problems we have with tenants is no more weighted to Section 8 tenants as other non-goverment assisted tenants.


  15. Great article. Many times those who have issue with Section 8 tenants or the poor in general are those who have wholeheartedly bought into the “American Dream” theory. We do not live in an independent society, we are VERY interdependent. That being said, no one does anything without the help of others, no one. So, sorry, no self made men or women in the world.

    Put short, the more adversity you face the more empathetic you typically become with the plight of your fellow man.

    • Yours is an interesting perspective. I did not feel the way I do now when I was younger. But, I am developing humility toward the circumstance people who can not do what I do find themselves in. I have my brain, many are not as lucky. That doesn’t mean that they can’t sweep the sidewalk, which is not glamorous but needs done. And should they choose to get off their ass and go do that unglamorous job, they should be able to earn a wage that gets then an apartment someplace other than the war zone. And now days, I don’t hold it against them if they use Section 8, but as I’ve said before, I would rather that our economy could accommodate minimum wage that enabled the basics which it currently does not…

      Thanks Derek

  16. Ben,
    Sure anyone can quit paying and have to be evicted. Its how much I recover after the eviction that matters to me. I prefer to rent to higher income people because at least they have wages over the state minimum that I can garnish after I get a judgement in small claims.

    • That’s a valid point Bill. I prefer the same thing you prefer, but this is not a legal qualification requirement for tenancy. Ability to put down a security deposit and to pay rent every month, having a clean record – those are legally defensible requirements. Thus, I don’t flat out turn people away for having low income and utilizing Section 8.

      I know what you are saying though!

      • “I prefer the same thing you prefer, but this is not a legal qualification requirement for tenancy”

        It is legal because I have an income requirement of #x times rent. My rent is high enough that low income people aren’t going to be earning 3x or 4x that rent level.

        • Sure Bill – if you want to weed out people on Section 8 this is a way to do it. I don’t do slum, and just like you I don’t do top of the market. In my neck of the woods rents go from $400 to $1,200. I live in the $600-$800. I know exactly what you are saying. But, I will consider section 8 at the bottom of that range

  17. For every bad high income earner story, there are 10 worse ones out there about section 8 renters. Ever have a high income earner decide that it is better to set the old couch on fire in the back yard because paying to have it hauled off is too expensive? (Even though the refuse company would have hauled it away for free!) Ever have a high income earner on oxygen think it would be a good idea to smoke cigarettes and consequently burn your house down? How about think it is OK to reheat pizza IN THE BOX and set the kitchen on fire then try to blame you because the stove “just turned itself on” and they just so happen to always store their leftover pizza in there? Or the multitude of section 8 tenants who live like such pigs that they think living with cockroaches is just ‘par for the course’? Just to preempt a knee jerk response, no, there were no cockroaches before they moved in. They brought their ‘pets’ with them.

    You can defend them all you want, but it is called suction 8 for a reason. Yes, there are a few honest, needy people who benefit from the assistance, but the majority of them are lazy, stupid, addicted to something, government handout dependent (in the abusive kind of way), or a combination of any of those 4. Thats why we like to joke that after they get their voucher, they need to head to the next window to pick out their free flat screen TV and dont forget the free iphone cuz you gotta have both of those when you’re on government assistance!

    As a person who grew up poor, and I mean eating-Bisquick-for-dinner-cuz-theres-no-other-food poor, in a single parent household, in a trailer park, next to the city dump, with a mother who never took a handout but instead worked her ass off to be able to buy us a house, I have absolutely no problem stating so on this or any other public forum – Section 8 is full of entitlement losers.

    And if you had to file eviction on a tenant after 3 days for not being current, then you made the mistake of letting someone move in before paying the first month’s rent in full because we both know you can’t evict for failure to pay a security deposit. I’d also like to know how or why you had to clean cocaine out of a sewer? That just sounds like knee deep rubber boot BS. Exactly how much cocaine does it take to block up a sewer? I’ve taken some pretty big dumps that went down alright so are we talking a kilo? More? If the house was under surveillance as you claim, I guess it kind of makes you an accomplice for disposing of the evidence. You might consider editing your post or just not embellishing so much next time.

    After thought; I’ve never had a high income earner ask me to “work with them on the security deposit” but I’ve my fair share of low life’s ask and my absolute favorite response is “that sounds like a job that doesn’t pay very well!”

    • Hahaha – Aaron, you certainly answered the question as to why you don’t like poor people!

      I can hardly comment on your remarks. Your perspective seems to be coming from someplace deep. There seems to be a lot of emotion behind your point of view. Our experiences shape us…

      I will say this – I’ve had unscrupulous people with lots, and I mean lots, of money do things to me that are considerably more hurtful than anything you mentioned. My perspective is therefore a bit different from yours my friend – money spoils people and can cause people to abuse each other in much more substantive ways than lack of money…

      Thanks Aaron!

      • By your money spoils people comment, you seem to be drawing a rich strawman to compare to the section 8 steriotype. In my rentals, I’d just as soon avoid both -and focus on the broad market of people who make decent wages.

        I’ve never looked at a carpenter married to a teacher or a web designer married to a customer service coordinator making $75K combined and thought “money spoils them”. Nor are they anywhere near requiring section 8.

  18. After all this complaining about ending government subsidies and assistance, or reducing it, I have yet to hear of anyone with a comprehensive plan for “dealing” with the issue.

    Here are just some of the problems I see:
    – If Section 8 and any other government assistance were eliminated completely, you’d have a ton of people who would be homeless wandering the streets. Some people advocate private programs supporting them. Who is paying for the private programs?
    – Is drug testing welfare recipients a good use of taxpayer dollars when there are not 100% of people on welfare actually using drugs?
    – So if someone is using drugs, what do you do with them? Leave all the druggies homeless and wandering the streets? Lock them up? Kill them? What is the solution?

    I am completely an advocate of giving people a hand-up in life as with Aaron, I’ve had a rough time growing up (although I would bet money my childhood was worse than his). And yes, I’ve seen people abuse the system all my life.

    No matter what, things are NOT going to change overnight. I do believe that education is the key. Changing policies for the better is the key. But who is going to provide the education? Who is going to make the policies? Everyone things “someone” should do that.

  19. Valerie Pastore on

    Congratulations for seeing what most people do not want to address. Too many people equate financial advantages with good character. Being poor does not automatically make you a bad person, lazy and incompetent. Not everyone was born on the same footing or had the same advantages. God made all kinds and if we were all alike what a boring world this would be

    • Valerie, you seem to make incorrect assumptions about how people draw conclusions and associations.

      its not that money/wealth or even income causes good character. Nobody I know of assumes that.

      Conversely, good/stable/verifiable earned income (and remember income and wealth are two entirely different measures) usually, though not always, requires some level of good character to achieve.

      So if i start with people with good/stable/verifiable earned income, I believe I will find people with acceptable character more often than not. Yes, I’m sure I will leave out plenty of other people who have acceptable character as well, but that is not really my concern right now. My concern is about protecting my business and my property – and I have enough safe applicants already that I don’t need to expand my criteria to get tenants. I’m not saying Ben shouldn’t do that – someone has to. Its just not for me – its more trouble than I want at this point.

      • Bill – your assumption that stable income is indicative of “some level of good character” simply has not been born out by reality of what I see. There are plenty of holes out there who make good money. If you haven’t experienced it yet – good for you my friend 🙂

        • Yes, they may be a holes, but they are usually functioning a holes. If someone has stable income (say they have worked the same job for 8 years), then they clearly aren’t a total deadbeat alcoholic or junkie who can’t hold a job for more than 6 months. And yes they could still have dependency issues, but at least they are at a functioning and earning level.

  20. In Oregon section 8 recipients are a protected class you cant refuse to rent to them just because they are section 8. That said i have both section 8 and non section 8 tenants there is allot more management with section 8 tenants as a whole, even if they pay on time it is a constant battle to get them to take care of anything.I have no plans to stop renting to section 8, but you have to have the right personality for it.

    • Wow – I didn’t realize that Section 8 is a protected class in some states. Honestly, don’t know how I feel about that. I am not big on fiat mandates all together – there are other, better ways to get things done in my opinion.

      Thanks so much Steve!

      • Ben what they did in Oregon is they set up a fund that will reimburse you up to $5200 if a section 8 tenant damages the property.No one knows if you will be able collect though.

  21. Thanks for the article and interesting debate. I know there are a lot of elderly people on Sec. 8 because they are on fixed income that makes it hard to afford decent housing. I’ve been thinking elderly Sec. 8 renters could make good tenants because once they get situated, they are likely to stay put (assuming they still have a few years of lifspan in them) and probably won’t be having big alcohol and drug parties.

    On to a practical question: how difficult did you find the process to get your property qualified and inspected for Sec. 8 eligibility?

    • Not a bad strategy Jim, though elderly might require more help with maintenance, etc. Part of my strategy is to include a deductable on maintenance issues to discourage the running toilet/leaky sink calls. I’m not running a hotel, I’m not going to change your lightbulbs or plunge your toilet for you. I expect my tenants to try to figure out how to repair minor stuff under $50 or $100 – sort of like a hybrid triple net lease.

      I also try to push lease/purchase as part of my strategy. Again, section 8 isn’t likely to jump on a LP, are they?

  22. I’ve only been a real estate investor for 3 years but I don’t do Section 8 at my 10 townhouse units for a few reasons –

    – I’ve had great luck with the current strategy of requiring 3x rent and doing a thorough background check. In fact I’ve only ever had 1 late payment which was 2 days late and he contacted early and he paid the late fee. Why change when it’s going good?

    – I’m also a Realtor and I offer my tenants an option of cancelling their lease at any time if they use me to buy a home. So far I’ve had 3 people do that and each time it’s usually an extra $3-5k in income. This wouldn’t be an option with Section 8 tenants.

    – The times I have had unit turnover I’ve very rarely had to even do any cleaning – they’ve returned it in great shape. Not sure that would be the case with Section 8 but maybe that’s a bias showing through.

    Good topic though.

  23. Wow I have very mixed emotions about this. Although I am just starting my REI journey, I do work for my families oil company and we deal with something extremely similar HEAP (heating assistance program). I love helping the little old ladies that NEED help, I HATE the bottom feeders that know nothing other than free hand outs and working the system. As a business venture we saw that there is still an opportunity to make money, so we followed. But! Our involvement only goes so far as, they get approved, we deliver the oil, end of story (until the scumbags call and try to work you for more >.<).

    Section 8 is so controversial for me, because I would love to help the people that do need help, and yes there are those people. Over the recession I didn't take a paycheck for 6 months straight just so I didn't have to lay off any more employees and just make things survive the best I could, and I chose to live frugally because I am not naive enough to not believe these times are never going to come. If things had gotten to the point, and I am thankful it didn't, that I needed help for housing, I would have liked it to be there.

    How do you fix these problems by changing the program? You have to eliminate everyone! Including those who need the help! Now im going to sterotype and generalize so forgive me but these sterotypes do come from somewhere. With section 8 yes you have guaranteed income (or at least until, the govt F&*(s up again 😉 ), but unlike HEAP you are stuck with these people… well I don't have to go into section 8 horror stories, you all know them, and yes there are horror stories with every kind of renter.
    NOW yes I agree that like with any tenant proper screening can find you great tenants and yes youll find some that are section 8.
    Ill suffice to say that the headaches that come with HEAP are nothing compared to section 8. But that's your own personal preference….

    What really gets me is where these problems come from! Work ethic!
    Heres a start for progress, drop unemployment benefits back to 26 weeks or earlier! I wonder how many people would find jobs …. I know that if I wasn't hard working, ambitious, or anything else that doesn't relate to scum and I had 99 weeks to live off the system, I wouldn't start looking for a job for a longgggggggg time.

    • Thanks for a thoughtful post Ben!

      The program is broken in a lot of way. There are a lot of people who need help, but not all of them deserve this help. This is the part of the program that needs addressed big time in my opinion and then guys like you and I will be happy.

      Thanks so much Ben!

  24. I have had good and bad tenants in Sec8 and through traditional rentals. My poor experience has actually been through the program itself. Slow inspections on lease up, difficulty raising rent, below market rent (I just went from $1150/mo Sec8 max rent on one property to $1425/mo traditional rent in a 3 out of 10 neighborhood), and very costly repairs on inspections from overzealous inspectors justifying their jobs. The sec8 office workers are about as friendly and useful as the DMV workers. I also firmly believe If you rely on Sec8 as your business model, you will be in a world of hurt in a few years.


  25. Some of the comments to this article are tripping me out. People do associate income with character when they are two different things. Take it a step further, people associate race with character. People with good income do F’d up stuff just like poor people. White people do F’d up stuff just like Black, Hispanic, etc. Stop treating people as groups and screen them as individuals against your criteria! Either they fit or they don’t. To think being poor automatically makes you a bad tenant or a lazy leach is silly to me. Also, a lot of the same people who rant and rave about Section 8 and Government interference are the same people who advocate for certain other Government interference that they benefit from. I am less concerned about the Government subsidizing rental income or healthcare for poor people. I am more concerned about the Government sacrificing its young people in meaningless wars. I am more concerned about the Government subsidizing foreign countries that stand by and watch our young men and women get killed.

    • I love your first sentence Daren…I concur with you sentiment. I’ve met so many ass…..es with money that I find it impossible to draw the association linking character to financial success / failure, which is my premise in this article.

      Thanks so much for sticking your neck out!

  26. I like your style Ben. Just like you I have the philosophy that there are good and bad people of every color and income levels.

    Fact is everyone has a story and different circumstances.

    It’s very hard to argue with hardcore ideological zealots who relish the good old days when churches ran hospitals, there was no social security etc.

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