Section 8 Housing – Good for Landlords?

As some of you may know, I recently decided to dip my toe into real estate investing – a I’m now completely submerged.

I closed on the property in early February and found out 2 weeks later that Tenant B – who had occupied her half of the duplex for over 20 years – had moved out. Long story. So I found myself immediately dealing with a vacant unit – a situation I didn’t think I’d have to deal with for at least 9 months.

My benevolent realtor offered to give me all kinds of information on how to rehab the property cheaply and market it to tenants. In the course of our discussions, he recommended utilizing Section 8 housing programs. I’d never considered it, but it occurred to me that the only two other real estate investors I know in my state also participate in Section 8.

Section 8 is a housing subsidy program for people who don’t make very much – or any – money (I’m sure there’s a PC term for them, but you get the idea). They generally have unstable income as well, and no credit or bad credit. Essentially the local government agrees to pay some portion of their rent (usually well over half) directly to the landlord. The tenant is responsible for the security deposit and any other portion of the rent.

According to my realtor (also an investor), this program is great for landlords because generally the government will pay you more than market rent to compensate you for taking on higher risk tenants. In addition, you have the peace of mind of knowing that the majority of the rent will be paid on time each month (at least if you have confidence in your local government). Plus he said those tenants usually stay put since it’s such a hassle for them to move, reducing expensive turnover costs. You get to screen them, require a deposit, and evict them if necessary just like any other tenant.

The downsides include dealing with government inspections, having to fill out extra paperwork, and attending a one-time seminar on the program – plus dealing with a high risk tenant, of course.

My first reaction was something like “oh, I don’t really believe in those types of programs.” He looked at me with a blank face. “This has nothing to do with your political convictions.” He said it was about getting a good, stable rent and managing risk and making a profit. I changed the subject.

I didn’t really consider the idea again until I actually had a potential tenant call and ask if I accept vouchers. Turns out she’s a section 8 member (or whatever you call it), and she assured me the paperwork is minimal and that all I’d have to do was fill out the packet she brought me, submit to an inspection, and attend a brief seminar. the local housing authority website says it only takes 15-30 days from the time the tenant gives you the paperwork until you receive your first government issued rent check.

In order to be fair, I told the lady she was welcome to fill out an application – I don’t want to get in trouble with Fair Housing laws by denying her the right to even apply (though I suspect I have the right to refuse section 8 tenants – if not I would probably sue for that right simply as a matter of principal). I never heard from her again, though.

So what do you think about Section 8? Are you opposed to the whole idea on a moral/political basis? Do you think it’s a great program that we need in this country? Regardless of your view, would you participate as a landlord?

More from Meg at The World of Wealth

73 thoughts on “Section 8 Housing – Good for Landlords?”

  1. In addition My fear is that in the time it takes to complete the entire process, The resident manager at the apartment building will rent my unit out to the next available tenant. Just incase something shady goes down i have a fair housing worker that will check back with me in a week to see if any progress has been made. And of course the resident manager will not answer her phone, I havn’t spoken to her since she told me about the inspection that was scheduled 9/15/08 which was this past monday. She could have atleast called me and said the unit passed inspection, I’m just waiting in limbo with no knowledge of anything. What a nightmare this entire ordeal has been stressful is a understatement.

  2. In addition My fear is that in the time it takes to complete the entire process, The resident manager at the apartment building will rent my unit out to the next available tenant. Just incase something shady goes down i have a fair housing worker that will check back with me in a week to see if any progress has been made. And of course the resident manager will not answer her phone, I havn’t spoken to her since she told me about the inspection that was scheduled which was this past monday. She could have atleast called me and said the unit passed inspection, I’m just waiting in limbo with no knowledge of anything. What a nightmare this entire ordeal has been stressful is a understatement.

  3. The unit I’m trying to move into passed inspection 9-26-08, This is 10-5-08 and i havn’t heard anything. Neither Housing Authority nor the Owner seem to be concerned about my case, This is a evil cruel world with out a doubt. Then when i visit housing authority they ask me am i the tenant or the owner, When i reply i’m the tenant they give me this attitude like they don’t even have to communicate with me. They say things like you are the tenant not the owner, We will contact the owner then the owner will contact you, I havn’t been contacted by anybody. I’m at the point of doing something drastic that will earn me a spot in prison, Atleast in prison you get 3 meals a day and a place to sleep, And you don’t have to worry about a section 8 voucher anymore.

  4. I recieve Section 8 and some of the views displayed on this site is just down right stereotypical. Yes, there are people who abuse the system, and Yes there are people have made some wrong choices in life that may have directly impacted their need for Section 8. But I’ll speak for me and my friends that have Section 8. I am a single mother of two children and I worked 2 jobs and went to college full time, but I lived from pay check to pay check. Why shouldn’t our wealthy government help those who need help? Are poor people shit out of luck because they are born poor? Should all poor people live in boxes on the side of the road? I understand what Meg is saying about working hard to get things. But to me Section 8 is not a luxury. I have had my tires slashed by other Section 8 reciepients because they had nothing better to do. Some nights I don’t get enough sleep because of the loud parties and fighting. If I didnt have Section 8 I would not have graduated college with dual degrees and cum laude I would have been working just to pay the bills with no upward mobility or real happiness at the end of working all of those hours. I am glad that the Section 8 program was here for me after being laid off twice in 3 years. The Section 8 program has given me upward mobility and I am grateful for this. I don’t feel a sense of intitlement but I am glad to be American. Meg, and others against this program…I hope nothing bad ever happens to you…I hope no one ever stills your identity and burns your house down…I hope that you and your family can handle a health crises such as cancer or the loss of limbs. Because if you want to know how people get into situations where they have to ask their government for help, those are some of the ways how.

    When I become a land owner I would rent to Section 8 tenants, but I would also screen them. The final decision is up to the land lord. It is very against the law not to rent to people solely because they have Section 8. These tenants may have bad credit but is comes with the territory. You can always ask them about hardships that may have prevented them from paying other bills. But for the most part I would rent to a Single Mom who is a full time student. The landlord gets more of a subsidy for this type of section 8 reciepeint, and then 9/10 times they will not destroy your property.

  5. Section 8 pays a portion of a tenant’s rent, directly to the landlord.

    That’s it.

    When I worked for Section 8, I encountered a lot of lazy, stupid landlords who never screened their tenants–and then came whining to us when there were problems. Hello, you were the one who screened him (or didn’t) and decided to rent to him!

    Also, tenants who receive Section 8 aren’t somehow magically exempt from the housing laws in your state. You can serve warning notices and evict them just like you can anyone else, as long as you follow the law.


    Also, I’m tired of the stories of ‘Once a Section 8 tenant trashed a house!’ Like that never happens with non-Section 8 tenants.

  6. There are a lot of people on section 8 that really need the assistance. For example, the elderly, disabled, those going to school, those who lost there jobs ( which means that atleast they once had a job). My problem is when people use these programs as a way of life instead of as a stepping stone to self independence. Any person with any pride wouldn’t WANT any handouts but sometimes you have to put your pride aside and ask for help. But once you get the help and you are able to overcome the situation that caused you to ask for help, you should have the ambition not rely on the government anymore.

    I own rental property and did not know much detail about the section 8 program; only that they provide rental assistance and that rent is guaranteed. I have one section 8 tenant and she keeps the house clean ( I do 1 yearly inspection and observe informally when I stop by for other reasons). I would not rent again to section 8 though. I think that section 8 has too many loop holes which leaves them open for abuse.There are a lot of people who were brought up on the system and then their children get brought up on the system and the cycle continues which is not acceptable. Section 8 spoon feeds the people too much and this is why the people start to get this feeling of entitlement and have no motivation to do better. For example, Section 8 stopped paying 100% rent for my tenant which caused the tenant to have to pay 35 $ a month towards her rent. You would think that she would have the 35$ ready on the first but no. I have to call her to ask for it. She is never on time. If I only had to pay 35$ for where I lived, I would never be late. This really rubs me the wrong way. There are people losing their jobs and homes and she only has to pay 35$ for rent and it seems that she doesn’t even want to pay that much. I would rather to rent to a hard working person than to rent to someone who just wants to live for free.

    Also when I first went through the process section 8 didn’t want to pay my fair market price for my property ( which was equipped with stainless steel appliances, fresh paint, new carpet). I ended up accepting the rental amount because I had allowed the tenant to move in before the process was complete under a conventional lease ( big mistake). I believe that my tenant knew that section was not going to pay the market rent but section 8 was instead going to negotiate the rent. You have to be careful because these tenants are smart when it comes to the system.

    Even though my unit has always passed inspection and the tenant keeps the place clean, I will never rent to section 8 again. Disabled, and those going to school or those who lost their jobs but is actively seeking are my exemptions. My principles have overshadowed my motivation for economical gain. I believe that if you are healthy and able to work, then you need to work just like the everyday tax payers who are paying for these programs. If you want section 8 assistance then you should not be allowed to live in a good neighborhood and let that be motivation enough to better yourself and get off of the system. If not that, what else would be the motivation not to stay on section 8? Point is, section 8 needs to be more strict with there rules so that lazy people will not get a free ride.

  7. I really don’t have strong feelings one way or another. I definitely see abuse of the system but at the same time I see the need from keeping people from being homeless and we waste more money paying corporations to rip off our armed forces (hint: our former vice president used to run the company) than we ever “waste” on section 8. HOWEVER, what irks me is the hypocrisy of many people. Jim says “I am in the process of putting two children through college, because I have worked very hard over the past 15 years investing in real estate while working at a full time job, I do not qualify for any government aid.”. I suppose Jim turned down his child tax credits or didn’t claim them as exemptions. And I suppose he paid extra property taxes to cover his school district’s costs. You see, I’m paying for Jim to have 2 kids and helping him pay to raise them. I pay $8600 a year on property taxes of which the vast majority goes to support schools and pay the highest income bracket to make up for his tax breaks for having children. So don’t be a hypocrite, until you can honestly say that you aren’t getting a break from the government for the PERSONAL choices you make, don’t judge those who recieve government assistance…because you do too. The easiest way to check is go see if you claim ANY tax exemptions or deductions. Guess what, that was a personal choice you made and I’m being asked to subsidize that choice.

  8. I wanted to add my comment to this list…. I feel that there are alot of different point of views that were stated that could be true or not. I am a Section 8 tentant and I work everyday and take care of my children. I don’t feel that I am a bad person at all. I may be considered low-income, but my morals are RIGHT.. I don’t feel that Section 8 should be sterotyped as poor, rude, disrespectful and inconsiderate people. I have high values and I guess at times having a helping had to help you get on your feet isn’t bad. I feel that Section 8 should be a stepping stone, but some people just don’t have the ability to get up in life. I just don’t like the idea that landlords would sterotype people just because they are on Section 8.. Some of section 8 tentants may have great ways and qualities, even though their credit may be bad or they may have a pass history. Sometimes you might want to look at the person and the situaution before you judge.

  9. This has been a very intereting read. I only came across this page out of curiousity. A new tenant who moved into the building I reside in is a section 8 person. One month on moving in and there is more garbage in the front and back of the property than I have ever seen. Loud music and the boyfriend / baby daddy lurking around. Just like many individuals with section 8 experience have written here. My conclusion, is that there is a small percentage of people collecting section 8 who are descent, respectful, hard working people. But the majority, 90 percentile, are just GHETTO!!! One bad apple spoiling the bunch does not apply here. Its the bunch and seems to spoil it for a couple.

  10. Wow! Very interesting comments from both sides of the fence. I have never been on section 8 because I was told I made to much money. I needed and wanted the assistance that others were getting, however, the only way to do that would be to severely cut back on my work hours or quit altogether. Neither was an option for me so I perservered in my quest to become an RN (I became a phlebotomist after graduating high school and worked for 15 years before beoming an
    RN). My cousin, full time student, section 8 program, never really worked until she went to college and became an RN was a model section 8 client. I say this to say I am planning to start in the world of real estate investing and I plan to rent to both. Everyone needs a helping hand sometime. Screen your applicants, ask for report cards for the kids to tell if mom or dad is serious about child’s education; ask what mom and dad are doing now, are they working? are they going to school? Are they involved in their community? Ask the tenant how they feel about rowdy neighbors and how they would handle a situation if they felt neigbors were rowdy? Have a tenant meeting offer incentives for keeping the property up. Their are a host of ideas you can offer up. There are dead beat non -section 8 people too. Screen all applicants the same way.
    Good luck to you all, and God Bless.

  11. I cant believe people still look at things from a prospective of social status or economic status. These days people with “GOOD CREDIT” are now filing bankruptcy at no fault of their own. Or the “Upstanding citizens” that have done everything right so they say, who are now committing crimes to keep their lavish lives they are custom to. I own 3 50 unit apartment complexes and 16 homes and yes I rent to section 8. I have a tenant that was a VP of a company that I will not make comment on but is now paying rent and working for thousands less than he did before. For all of my tenants I do housing inpsections of their prior residence before moving them in. This way I learn how my potential tenant maintain their current residence before letting them into mine. I also do yearly inspections of my units to make sure they are taking care of it and it is all legal. Section 8 or not I make sure all tenants are screened the same. As long as I am paid I dont care about the program. Most people who dont accept section 8 are people who really can careless about the moral thing its usually people who dont want to up keep their properties. GOD forbid I loose everything I would hope I can get help with a program like section 8. In addition for every section 8 unit I rent I get a tax break.

  12. Yes section 8 is great for greedy,selfish,money hungry landlords who can care less about the house they are renting as well as the community around it.WHY?Because they themselves do not live there,nor would they ever tolerate these people living near them.Its truly disgusting.All these people care about is the guarenteed rent-they can care less about the noisy,violent,leechy losers that they allow to move into your area.Yes there are VERY FEW good ones-but chances are you will get the crappy one that will turn your block inside out.Maybe some of these landlords can buy and live in some of the houses right next to their rental.Just my 2 cents

  13. People are very ignorant when it comes to section 8. Its not for people with bad credit or no credit, its a voucher that helps assist people who can’t afford to pay the full amount of rent. For person who work and on section 8, the tenent must pay 30 percent of their income. And its a shame that people think that section 8 is means your a nothing and a nobody. But thats America for you.

  14. Other than the close-mindedness of some, this has been a really good discussion and will help my decision whether to accept sec. 8 vouchers or not.

  15. I have a great section 8 tenant.. older woman with a daughter & her kids. You just have to screen them like any other tenant.

    It was a real pain to work through the program, but well worth it as this is getting someone in a property that was very difficult to get rented.

    In our case, the gov’t pays all but $1 of the monthly rent.

  16. You rent to a hud tennant, you get the home perfect for move in,passes inspection, after one year you recieve another inspection that will generally fail due to all the damage the tennant has caused, then you get a letter,failed inspection. Landlord must repair broken bedroom doors, holes in walls,cabinet doors off cabinets Ect. I only have three hud tennants now,almost done, after they move, then i am going to be hud free from then on. Never again will i contribute to such ignorance as this. Beggars trading places with successes. I will never again become the beggar in exchange for money again.

  17. Ninety percent of the calls i have gotten the last seven years for section 8 tennants has been abuse. Example,If a tennant wants to rent a beach front property for more money than sec.8 will allow they will tell you this; I pay my landlord 200.00 dollars extra each month that hud dont know about and i can also pay you the difference. After they move in, most of the time, it is a female, many times doing financially well with tips from waitressing or dancing,then the live-in working boyfriend shows up. Of course he doesnt live there he just stays all night every night to help her out while visiting his kids. This is the ultimate setup if you are lookin to build wealth illegally and no punishment enforced. Government at its finest. However, the rich evil landlord can be blamed for taking advantage of these poor helpless down & out people just trying to get by and didnt know what they were doing. BEWARE…A country is doomed when it learns to vote itself benefits

  18. Very interesting point of views. I am currently a section 8 tenant, and consider myself one of the “good” ones. I applied to help cover cost while attending school (tuition increased 3x’s during my freshman year). I am also a single mother, as well as being a full-time student and working part-time. I have no family around, so it’s just my 3 yr old son and I. If it wasn’t for being on section 8 I and my son would be homeless. I wouldn’t have had the means to continue my education along with caring for a young child. It’s hard being a section 8 recipient because some individuals will judge you strictly on that fact alone. I have lived in my apartment almost 6 yrs, 3 of which with a section 8 voucher. I have no violations, bills paid on time, and I generally keep to myself. I respect the property as if it were my own, so I, of course dislike being lumped in with all the stereotypical assumptions about section 8 tenants.

    It’s a good, helpful program. However, there are those that abuse it and make it even more difficult for tenants like myself who just needed a helping hand in working toward making a better life for their family. I honestly feel embarrassed and less than, having read some of the comments posted here. It all depends on the person, not so much the economic level they reside on. We aren’t all ghetto, wild, loud, unappreciative, lazy bums looking for a handout. There are those of us who indeed just needed a hand gaining solid, stable footing.

  19. WOW. so much for taking responsibility! Section 8 Tenants are like all the other “groups” whether you group by color, job type, nationality, whether you hang your toilet paper against the wall or not.. meaning that there are good and bad in all groups. If the section 8 renter across the street from you is a horror, chances are the landlord lives offsite and couldn’t care less. Obviously that landlord is in it for the money and the screening process is non existent for them. If the Landlord cared about the property and the neighborhood, proper screening would ensure that the ‘undesirables’ do not move in. By the way the WHITE HOMEOWNER next door is the one that has the loud parties, the rude and noisey teenagers and apparently a drug problem based on how many times a van comes over while hubby or wife run out and hands over cash… the SALVADORIAN section 8 renter next door works, goes to night school and has polite children . So the landlord next door did a great job of screening his tenant..I have no one to blame for letting the homeowner next door into our neighborhood, though I have a feeling that there will soon be a drug bust..oh and by the way I am a white German woman. Stop generalizing and categorizing based on color, housing etc. There is good and bad in every group and to the Section 8 employee in Virginia… shame on you for being as bigotted as the others!

  20. A lot of great comments here.

    I would just like to address the point made Meg who said, “Accepting Section 8 tenants would be to take a role in [promoting government assistance programs], and it’s something I just won’t do.”

    While I agree with some of your points, I feel one amazing difference with the Section8 program is that it’s the only assistance program I know of in the entire country where WE get to decide who benefits from it. Landlords pick their own tenants in Section8. You get to decide if someone is a system abuser and you can decide not to rent to them. Or you can decide to rent to the hard-working single mother who’s just trying to make a better life for her kids by getting them out of the bad neighborhood she would otherwise afford. If all Section8 landlords kept this in mind (which they don’t) the program would be better. But by having people who could be potentially great screeners NOT participate in the program, it also loses something.

  21. Lily’s “economic argument.” The question about subsidizing rent is mostly a political argument not economic. Your argument that it causes a housing shortage goes completely unaddressed.

    If anything Sec. 8 places more money into the rentable housing industry, which would support the rationale for building, developing, and rehabbing more rental properties. In the long term it can help increase housing supply. Yes, Sec. 8 might make it harder for some non-sec 8 tenants to find housing in a locale temporarily, but there might not be as much housing supply in general without sec. 8 either.

    For example, without sec 8, whether he accepts it or not, there might not have been enough total renters on the market for the blog writer to become a landlord without the increase in demand from local section 8 usage.

    Also, your anecdotal evidence is based on one situation. I think whether or not it is a sec 8 or non-sec 8 tenant the trick is to screen them and collect enough evidence for any reason you reject a potential tenant, but not others. I’ve personally seen bad tenants (non-sec 8) kept in an apartment building from legal threat from the local ACLU. I normally respect them at the national level, but they make some really bad decisions on the local level.

  22. It is actually legal for a Section 8 recipient to rent a place that costs more than the Section 8 allowed amount and chose to pay the difference if they are able. Maybe they would rather pay a higher rent than have cable t.v., internet or spend money partying. If a Section 8 tenant “trashes” your apartment, rather than bring it back up to code and allow them to continue to live there for another year, EVICT them or DON’T RENEW THE LEASE. It’s not rocket science people. Anybody who would fix the place up and then sign another lease with a Section 8 tenant who has trashed the place is just an idiot.

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