Our first SFH! Section 8?

Question

Hey BP fam!

We are officially under contract for our first property - a SFH in what I would gets is a B-C type of neighborhood. Looking for advice on whether or not we should accept Section 8 applicants? I've read (all my knowledge is theoretical) that tenants on government assistance can be really rough on properties (I also see that as painting with a broad brush) but the government assistance side of that is pretty stable income, and it doesn't seem terribly difficult to raise rent either, just requires 60-days notice instead of 30.

Thoughts/recommendations?

Drew Sygit · Answer

@Carl Rowles we screen all tenants exactly the same, but know several of our local competitors cut corners to attract more S8 applicants - waiving application fees, security deposits, etc.

You can try to weed out applicants that have poor "house maintenance" skills by doing surprise zoom calls and asking them to show you their kitchen, bathroom and another room. How their current home looks is how yours will soon look!

Chris Berry · Answer

Congrats on getting your first property!  I have had a lot of luck on Long Island with section 8.  I was unsure of how it would go originally when I started back in 2017 with our 1st section 8 tenant.  I currently have three which have stayed since I bought the houses 2017, 2018 and 2019.  The turnover is where you will lose a huge amount of money.  It has been good to retain them for so long and section 8 has been good with increasing the rents each year.  I would still screen the tenants just like any other one.  I would also try especially in the beginning at least quarterly to complete some routine maintenance and make sure the house is being taken care of properly.  Good luck with your property and let me know if you have any other questions.

Travis Biziorek · Answer

Hey Carl, I have a few S8 tenants in Detroit, but most of my tenants are "cash paying".

I'd start by searching the forums here for "section 8" related threads. This question is asked a lot and there's a ton of value by just reading those previous conversations.

In short, there are pros and cons to the program. All of which are well documented on the forums. And you need to weigh those pros and cons to make sure Section 8 investing is the right decision for you personally.

I'm currently starting an eviction on one of my S8 tenants because she's trashing the place. The other two are great. But one of the other two also just had her voucher go to literally zero... so that's interesting.

Jonathan Greene · Answer

There are plenty of articles and cases out there about discriminating solely based on how the rent gets funded so you have to very careful how you respond. Most of landlords are not interested in doing Section 8 either, but we phrase it always the same that we will consider all applications as a whole and once we have the application we review it and see.

In my opinion, no landlord should be forced to do Section 8 and I don't think it can happen, but you have to be very careful how you vet tenants and decide so you are open to all applicants, but still able to make an informed, best decision for yourself.

Jonathan Greene · Answer

Section 8 is not a great option for first-time landlords just because it requires more upkeep and working with the municipality. You can't say you aren't taking Section 8, but you can say all applicants will be considered as a whole and it has not been licensed for Section 8 in the past and you had no plans to do it. When you list it for rent you can make a decision if you get who you think would be a good tenant either way. But you should know if it's a B or C neighborhood that you are buying in.