Section 8 ? What is the big risk?

Question

This may seem like a simple question but why are so many landlords against renting to Section 8 tenants; when it seem like a pretty guaranteed payment. I've always thought renting to Section 8 tenants would be one of the safest ways to get rent paid on time minus the fact that some may have to pay a little extra out of pocket. Basically I am trying to understand what is the risk behind so many "No Section 8/DSS" postings for rental properties.

Thanks

Alexander Felice · Answer

I LOVE section 8

everyone has different experiences and part of that is local S8 infrastructure. Some people have bad experiences and relay that, some people have good experience (like myself). What you have to be careful of is stereotyping, someone who has a bad tenant then assigns their negative PERSONALITY traits to an entire demographic of people who's only separation is based on ECONOMICS. This is poor and toxic behavior imo

the fact is though, that S8 are just people no different than anyone else, some are wasting air while most are outstanding humans. You get to vet them like any other tenant. I think the risk is much lower imo since you have a secondary method to screen (S8 office) and guaranteed payments, but that part is certainly debatable.

Nick C. · Answer

I think the landlords against section 8 either had a bad experience with a sec 8 tenant and assume they're all like that or heard about someone who had a bad experience. Or maybe they really are slumlords and their units won't pass a section 8 inspection.

Personally I haven't noticed a difference in sec 8 tenants and non sec 8. Some are good, some are bad. Do a good job screening on the front end to mitigate risk is all that can be done with any tenants. At least with sec 8 they have something to lose (their voucher).

Andrew Kerr · Answer

@Victor G. - Not always, but a lot of the times I found the folks that are strongly against it, have never actually had Section 8 tenants. They have just heard its bad or heard horror stories.

When I did section 8, I liked it. It was difficult to get started (lots of hoops to jump through signing up and getting approved). Then I found the physical inspections to be easy as I wasn't a slum lord and actually maintained my units. And then as far as finding tenants, it was pretty easy, and even if they are approved for section 8 it doesn't mean you have to accept them. You get to do your own screening as well. Then you get the rent automatically deposited to your account every month.

I had a friend get me into section 8 tenants as I was already doing affordable housing. He built his whole business on it and loved it.

Jonathan Taylor Smith · Answer

If you have proper systems and practices in place and do a reasonable job at tenant screening, the risks can easily be mitigated and there are actually several benefits. I like participating in the program as it works well for my business, but if I ever have to evict a Section 8 tenant it's highly unlikely that I would be able to collect against them in court, although eviction is an unlikely outcome for a properly screened tenant since they would lose their voucher and most would seek desperately to avoid that.

Thomas S. · Answer

Quality of welfare tenants is entirely dependant on how your local government handlers manage the system.

Assuming you have basic screening standards the vast majority of S8 would never pass. Forget about credit scores or credit history. You take what you get and ride it out. This means you must lower your standards even for a C class property. S8 is high risk, not due to payment so much as opposed to damage/abuse to property, violation of the lease, restricted breeds of dogs, bringing in unregistered tenants etc. Along with lower intelligence comes low social skills and standards which means much greater hands on management. What they deem as appropriate behaviour is not appropriate for the average person which results in considerable property damage. They will without hesitation move in their expectant daughter soon to be followed by the dead beat X-con boyfriend. They have a high sense of entitlement along with a poor me attitude.

They are a handful and a full time job to manage. Turn over costs on average are higher but returns on C/D properties are better on average.

The majority may be good but the bad ones will drive you out of the business.

I have had my fair share, all inherited, had to evict every one, I personally despise them.

Victor G. · Answer

@Andrew Kerr

Thanks for the reply and yes that is true I have heard lots of horror stories, and I was believing that once you got pass the whole hurdle of paper work and inspections then the rest will be smooth

Section 8 ? What is the big risk?

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