Experienced Section 8 Landlords

[Matt DiNofia]

We have been thinking about expanding our portfolio into more section 8 properties.  I understand the ins and outs of the tenants, the problems, the beat up homes, etc. I’ve also seen section 8 stop paying because of a small code violation on a home here or there  

On a larger scale, we are reluctant to put too much of our portfolio into section 8 because of potential payment concerns and having too many eggs in one basket. It’s not that we do not think the federal government will pay, but what if something arbitrary happened. Maybe a new employee that has the accounting mixed up, maybe something like a small fire or injury that gets blown out of proportion, a criminal act, an agreement violation, a IRS problem etc.  If the wrong person in the wrong mood decides to shut off payments and it goes on for months it could put you in a bad spot.   I did hear of somebody that had a property fire and somebody died. There was a code violation and they held the landlord criminally liable.  It wasn’t section 8, but again what would happen if it were and the landlord had many many properties?
Has anybody heard or had a problem with section 8 stopping to pay on multiple properties?  Should the landlord diversify more. It would be interesting to hear some thoughts.