Open/Close Menu
Your Rental Housing Solution
Open/Close Menu
Your Rental Housing Solution
Your Rental Housing Solution 866.579.2262
Home · Property Management · Latest News : Pros and Cons of Section 8 Rentals
Print Friendly

by Michael Monteiro

Embarking on renting to Section 8 tenants is one of those decisions that property managers should undertake only after thoroughly researching all the implications of renting to this very specific demographic. Following are some of the primary pros and cons to consider when evaluating whether or not Section 8 rentals are for you.

Pros: Government subsidies mean that your rental income is more assured than in other cases.
Since Section 8 tenants are by nature low-income tenants, many landlords are rightfully concerned that renting to this sector will result in difficulties with rent collection or, even worse, default altogether. The truth of the matter, though, is that in many ways Section 8 rental income is among the most reliable. Under Section 8, tenants are responsible for approximately 30 percent of their rent, while the US government picks up the balance of the rental payment. This US government balance is paid directly to the property landlord.

Cons: Renting to Section 8 tenants puts your property under greater scrutiny due to government rules and regulations.
Be aware that before approving one of your units for Section 8 occupancy, the US Department of Housing and Urban Development (HUD) will determine your units Fair Market Rent (FMR). Once the FMR is determined, you are obligated to cap your Section 8 units rent at that rate and are not allowed to accept outside payments that will result in a rent higher than the FMR.

In addition to FMR restrictions, Section 8 properties are also subject to a full premises inspection to ensure HUDs Housing Quality Standards are met and stringent HUD-mandated eviction rules and regulations.

Pros: Because you have access to a specific demographic, Section 8 tenants may resolve persistent vacancy issues.
In many cases, Section 8 housing wait lists are thousands of families long or, in some states, closed altogether due to over-extension. This means that there is no shortage of Section 8 families available to rent out your units. For landlords that have difficulty renting out units, Section 8 may be a great solution to generate increased rental income.

Cons: Other tenants may be somewhat hesitant to rent from a Section 8 property.
The truth of the matter is, many people associate Section 8 housing with run-down properties that cater to an undesirable demographic. Obviously, this is not necessarily true. For the most part, the proof is in the pudding. If you are concerned that Section 8 units may discourage other renters from living on your property, exert even more effort than usual into making sure that your property is top-notch. Keep all public areas of your property spic n span; stay current on maintenance and upkeep; put some extra effort into making your property aesthetically pleasing with landscaping and gardening; and enforce property rules and policies regarding noise and unit upkeep.

Of course, landlords of any stripe should be diligent about the issues above, but putting a little extra effort forth in this specific scenario will only work to your advantage.

As with so many other aspects of property management, gaining a good grasp on the issue at hand is 90 percent of the battle. If you are considering incorporating Section 8 rentals in your property, be sure to not only do some online research on the topic, but also talk with other landlords who rent to Section 8 tenants and address any questions you may have to the appropriate state and federal agencies.


Michael Monteiro works for Buildium LLC, maker of online property management software  and landlord software for professional property managers, condos and homeowner associations (HOAs) and is author of the The Buildium Property Management Blog.


See Michael Monteiros feature, Watch Television While Learning Real Estate and Property Management.


American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.


To subscribe to our blog, click here.

Print Friendly
  • jmc

    MY advice is not to rent to Section 8 tenants!!! Yes, you get your rent–however, HUD leaves the landlord hanging when the tenant vacates and there are damages. HUD says that damages are the responsiblity of the tenant, and give the landlord absolutely no help. Of course, the tenant is now living in another Section 8 property, thanks to the government, and has no money or reason to pay you. This has been many years, but I believe that the way the Section 8 contract/lease is written the landlord has no way to collect anything.
    We took Section 8 once–had damages on a very nice 3 br, 2 bath unit of $6k plus–and this was many years ago! After that we decided that it was better to let a unit sit vacant rather than chance renting to another Section 8 tenant.
    As far as your implication that Section 8 properties can be run down upon renting, that is not true. The government makes sure the properties are in top form–basically, only brand new units qualify in our town. Nice older units don’t meet their standards–even though they are better than where we ourselves are living!!!
    The problem is when the very nicely kept unit goes downhill with tenancy–tons of toys scattered around the yard, junk cars, constant parties/coming and going, etc–
    that was our experience. You’re right–nobody else wants to rent there, except other deadbeats (probably on Section 8). And HUD says that you can’t do anything about it–because the rent is being paid!!!
    I realize that there are truly good Section 8 tenants–however, based on the experiences we have had and the total of lack of support from HUD, they will never have a chance. Our units will just sit vacant.
    A totally horrible experience!!!

  • bayprop1

    Hi JMC.

    Sorry to hear your sect 8 exp was so bad. We have rented to sect * tenants for 20 yrs and for awhile, in 2 counties. Yes, there are some awful tenants, just as there is with non section 8 tenants. You must check everything carefully. We currently have 5 sect 8 tenants that are doing well. one has been with us for 4 yrs and is my best tenant of more than 30 tenants. I just lost the longest term sect 8 tenant that had been with us for 7 yrs. EXCELLENT TENANT!!
    On the other hand, we too, have suffered damages and unpaid rents and trouble making tenants that shy others from living in the complex. Sect 8 use to cover damages from tenants back in the 90’s and then they would terminate the tenants sect 8 voucher. I think they should reconsider this practice or a combination of something to hold the tenant accountable.
    I dont like the fact that the FMR is ALWAYS far less than the TRUE FMR !!
    HUD always tries to cheat the landlord out of what the FMR really is.

    Now with the 3rd part go-sect 8 dictating what the FMR’s for that area are, it makes it even worse. the sect 8 worker inspector use to be able to make on the spot adjustments for the initial contract rent, but not anymore. the problem here is not all studio’s, 1 bd, 2 bd apts and homes are alike, especially when it comes to Victorian homes and Victorian apt buildings. condition, location, sq ft and other amenities play a huge role in rent determination, but not if you go by “Go sect 8” analysis.

    In short, dont shy away from this population. trust me, just do your research first.
    If the tenant has a vehicle, walk out to their car and see how they keep their car inside and out.
    If it is filthy, there you have it. (Dont look at my company work truck as it always has supplies and paperwork in it, Ha ha)

    good luck!!!!!

  • be&be

    I have two triplex units. All six of my units are section 8. I love my tenants. I have had some problems with up keep however once my tenants understood that I am not a slum lord they got on board. I had to send notices every time I saw that they were not keeping up the property. Eventually they learn to respect the way I like things. I have 4 guys and 2 women renting. I find the guys are much easier to deal with. One of my units are all guy and the place is really clean (I mean absolutely no problems) and my other unit has 2 women and 1 guy they all have children. I have had some problems with them leaving bikes and toys around the premises. However, I leave red notices on ALL their doors and place the toys by the doors letting them know that this is not acceptable. They have gotten the hint and have stop it for the most part. I take great pride in my properties and have let my tenants know how I can be before they rent from me. It does work.

    The way I rent my properties 1. I do not make appointments to see the unit. I have open house on specified days. 2. I put out lots of flyers on the property at least 3 weeks before the open house. 3. The day of open house I have ballons, water, and plenty of pens and applications. 4. I get a chance to talk with all the potential tenants and I write notes on everyone I speak too. 5. I make sure the section 8 office gets my open house notice… I find out, the turn out is great. 6. I try and walk them to their cars……That can be a story in it self. (dirty cars most likely mean they
    will make a mess of your place) 7. I ask them to bring their kids so I can meant them.

    *This is not Perfect but it’s a start. It has worked for me but it took me a minute to get to this point. ****GOOD LUCK*****

  • Section 8 -NOT a good idea

    Section 8 -NOT a good idea. At least not in Los Angeles!

    First of all, in addition to City and County officials crawling up your but you get the FEDS. And, if you can believe it they have additional requirements to meet their “standards”. For instance, we had to put a railing up on a small staircase. City and County had no problem, but the FEDS wanted it.

    Second, once you accept HUD for one tenant you have an obligation to rent to ALL Section 8 applicants. If you don’t, then it can be considered discrimination. I was so relived when my last section 8 moved out.

    Third, what they consider market rent is always WAAAAAAY below what you can get in the open market. So unless you want to give deep discount as a charity this is reason alone not to accept it.

    And lastly (and this applies only to the City of Los Angeles) the terrible City Council had tried to make it so that once you rent to a section 8 tenant (most likely at a discount to market rent) the RENT CAN NOT BE RAISED TO MARKET even after the Section 8 tenant vacates!! What landlord in their right mind would even think about renting to section 8 after this???? It’s bad enough we have to deal with their nasty RENT CONTROL!

  • FCV

    Does anyone know if it is legal for the Housing Authority to override the law in regards to raising the rents in the state of California?
    In my county, there is no rent control. However, if the increase is below 10%, I only have to give a 30 days notice to raise it. If over 10%, I have to give a 60 days notice.
    So, I send the notice for under 10% a month and a half early, one copy to the tenant and a copy to the Housing Authority. The tenants get there copy but the Housing Authority says they didn’t get theirs (all were mailed at the same time). After calling and leaving messages for the last two weeks of that notice, they finally call me back to inform me that they didn’t get any notices for the half dozen of my Sec 8 renters and that I have to give a 60 day notice no matter how much the increase is and that I have to start all over again because they never got it. So, to get this done, the process is nearly 4 months for a simple increase. And I keep them priced below my usual market rate due to the cap on their FMR.

    Wondering how their requirements over ride a private contract? I know I agreed to that when I signed their contract but to make me start all over again really didn’t set well with me. They should have at least honored the original date of the first notice and went 60 days from there.

    No more Sec 8 tenants at my property!

Copyright © 2004 - 2017 All Rights Reserved.