How to Start Investing in Section 8 Housing: Advice Needed

Question

Hi everyone,

I'm looking to get started in real estate investing, particularly in buying and renting homes to Section 8 tenants. I’m intrigued by the idea of providing affordable housing while generating steady rental income, but I’m still in the research phase and have a few questions:

• Is investing in Section 8 housing a good idea? What are the pros and cons compared to traditional rentals?
• What’s the best way to start? Should I look for specific types of properties or areas?
• What’s the process like for becoming a Section 8 landlord? Are there extra steps or regulations I should know about?
• What challenges have you faced? I’ve heard there might be stricter inspections or potential delays with rent payments.
• Any tips for beginners? Are there resources or books you'd recommend to help me understand this niche?

I’d love to hear from anyone with experience in this space—success stories, lessons learned, or even things to watch out for. Thanks in advance for your insights!

Looking forward to your advice!

Drew Sygit · Answer

@Megan Mason recommend you watch some of the videos from @James Wise youtube channel on S8 evictions.

We've been dealing with S8 tenants for over 20 years and they are NOT a cure-all for rent collection challenges.

Since rents in Class A & B areas exceed S8 limits, most of your S8 rentals are going to be in Class C/D areas.

Many investors make the mistake of over-improving their purchases in Class C/D areas, which when damaged by Class C/D S8 tenants - costs them thousands.

Another fallacy of S8 investing is that the S8 Caseworker will keep the S8 tenant inline by threatening to take their voucher away.- The reality is this depends on each individual caseworker. Since they are social workers, they are always overworked & underpaid. Some do a great job, many do okay, some do a terrible job. Regarding finding S8 tenants for vacancies, yes there are always S8 tenants looking to move, but you should ask yourself WHY they are moving! - We've chosen many times NOT to renew a S8 tenant's lease because of the damage they cause, which their caseworker won't hold them accountable for.- We just evicted a S8 tenant that refused to pay their portion of the rent. - We also have S8 tenants move because the owner won't agree to repaint, replace carpeting, etc. - that were new when the S8 tenant moved in 1-2 years ago.

Another challenge of finding S8 tenants is many EXPECT you to waive application fees and security deposits.

Is it possible to make money with S8 rentals? YES!- To actually make money investing in S8 rentals, you'll need to develop a thick skin, so you can make business decisions that often conflict with one's humanity tendencies.

DM us if you'd like to discuss more.

Jaycee Greene · Answer

Hey @Megan Mason! Welcome to the BP Forum! I'm glad to hear you've got an interest in providing AH, but have you researched any S8 properties in your market or walked the neighborhoods where those properties are located? Are you looking to invest in the same market/city where you live?

Travis Biziorek · Answer

Hey Megan, I'm glad you're interested in Section 8 investing—it can be a very rewarding niche, but it’s definitely got its share of challenges. I’ve been renting to Section 8 tenants for years, particularly in Detroit, and I’m happy to share my experiences and help answer your questions.

• Is investing in Section 8 housing a good idea?
Yes, but it really depends on what you're after. Section 8 comes with guaranteed rent payments straight from the government, which is a huge perk. It's reliable cash flow, and it's why many landlords get interested in the first place. There’s also a lot of demand for these rentals, so filling vacancies usually isn't a problem, which means fewer months with no rent coming in. But there are also some real challenges, like dealing with lower tenant quality on average, the extra red tape, annual inspections, and the longer time it takes to get tenants placed compared to the open market. The trade-offs are real, but for consistent cash flow and the right landlord, it can be an excellent strategy.
• 
• What’s the best way to start?
There are two main approaches to getting started with Section 8. You can either buy a rental property that already has a Section 8 tenant in place, or you can place a Section 8 tenant yourself. Each approach has its own pros and cons. If you buy with a tenant in place, you save yourself the hassle of paperwork and inspections upfront, but you miss the chance to screen the tenant yourself—which can be risky. The screening process is crucial because tenant quality can vary widely, even under the Section 8 program. Placing your own tenant takes longer (usually 3-4 months with inspections), but it gives you full control over who lives in your property, which is a huge plus in my book. In Detroit, for example, I like to focus on strong C-class areas where Section 8 demand is high, but I still get some quality control over tenants.
• 
• What’s the process like for becoming a Section 8 landlord?
The process is pretty simple, but it does involve extra steps compared to a traditional rental. You market your property like you would any other rental—put it up on Zillow or AffordableHousing.com, and make sure to note that you accept Section 8 tenants. Once you find a potential tenant, you have to go through a Housing Quality Standards (HQS) inspection, which can take a while and may require some repairs or tweaks to pass. Then, there’s paperwork to finalize with the local housing authority, and finally, you start getting rent payments. The first payment can take a while to come through, but once it does, the rent is very consistent.
• 
• What challenges have you faced?
One big challenge is the inspection process, which can feel like a hurdle. The housing authority can be very strict, and even minor issues can delay the process. Another common challenge is the tenant quality. You’re generally working with tenants who, by definition, have lower income and often less favorable credit. That doesn’t mean they’re bad tenants—many are just trying to provide stability for their families—but it does mean you need to be extra diligent with screening. You can’t just rely on the voucher and guaranteed rent; you have to make sure the tenant will take care of your property. If you don’t, you might end up spending more on repairs than you’re making in rent.
• 
• Tips for beginners?
Start by networking with other Section 8 landlords. Whether it’s local investor groups, forums, or BiggerPockets, connecting with folks who've been through the process is invaluable. Also, remember that screening is key. The guaranteed rent is great, but don’t let that lull you into taking any tenant with a voucher—look at their rental history, employment, credit, etc. Also, be prepared for paperwork and some level of bureaucracy, but keep in mind that if you’re willing to work through it, the rewards can be substantial. In my own experience, Section 8 tenants tend to stay longer, and fewer vacancies mean less turnover cost and hassle, which is a huge win.

Is investing in Section 8 housing a good idea?
Yes, but it really depends on what you're after. Section 8 comes with guaranteed rent payments straight from the government, which is a huge perk. It's reliable cash flow, and it's why many landlords get interested in the first place. There’s also a lot of demand for these rentals, so filling vacancies usually isn't a problem, which means fewer months with no rent coming in. But there are also some real challenges, like dealing with lower tenant quality on average, the extra red tape, annual inspections, and the longer time it takes to get tenants placed compared to the open market. The trade-offs are real, but for consistent cash flow and the right landlord, it can be an excellent strategy.

What’s the best way to start?
There are two main approaches to getting started with Section 8. You can either buy a rental property that already has a Section 8 tenant in place, or you can place a Section 8 tenant yourself. Each approach has its own pros and cons. If you buy with a tenant in place, you save yourself the hassle of paperwork and inspections upfront, but you miss the chance to screen the tenant yourself—which can be risky. The screening process is crucial because tenant quality can vary widely, even under the Section 8 program. Placing your own tenant takes longer (usually 3-4 months with inspections), but it gives you full control over who lives in your property, which is a huge plus in my book. In Detroit, for example, I like to focus on strong C-class areas where Section 8 demand is high, but I still get some quality control over tenants.

What’s the process like for becoming a Section 8 landlord?
The process is pretty simple, but it does involve extra steps compared to a traditional rental. You market your property like you would any other rental—put it up on Zillow or AffordableHousing.com, and make sure to note that you accept Section 8 tenants. Once you find a potential tenant, you have to go through a Housing Quality Standards (HQS) inspection, which can take a while and may require some repairs or tweaks to pass. Then, there’s paperwork to finalize with the local housing authority, and finally, you start getting rent payments. The first payment can take a while to come through, but once it does, the rent is very consistent.

What challenges have you faced?
One big challenge is the inspection process, which can feel like a hurdle. The housing authority can be very strict, and even minor issues can delay the process. Another common challenge is the tenant quality. You’re generally working with tenants who, by definition, have lower income and often less favorable credit. That doesn’t mean they’re bad tenants—many are just trying to provide stability for their families—but it does mean you need to be extra diligent with screening. You can’t just rely on the voucher and guaranteed rent; you have to make sure the tenant will take care of your property. If you don’t, you might end up spending more on repairs than you’re making in rent.

Tips for beginners?
Start by networking with other Section 8 landlords. Whether it’s local investor groups, forums, or BiggerPockets, connecting with folks who've been through the process is invaluable. Also, remember that screening is key. The guaranteed rent is great, but don’t let that lull you into taking any tenant with a voucher—look at their rental history, employment, credit, etc. Also, be prepared for paperwork and some level of bureaucracy, but keep in mind that if you’re willing to work through it, the rewards can be substantial. In my own experience, Section 8 tenants tend to stay longer, and fewer vacancies mean less turnover cost and hassle, which is a huge win.

Section 8 isn’t for everyone, but if you want reliable cash flow and are willing to do the upfront work, it can be a great way to invest in rental properties. Just make sure to weigh the pros and cons carefully—like any investment, understanding the trade-offs is key to making it work for you. Good luck, and feel free to reach out if you have more questions!

Greg Scott · Answer

Megan:

The process for managing rental real estate is not 
terribly different between Section 8 and market rate tenants. Learn the 
latter and you have 98% of what you need for renting to a Section 8 (voucher) resident.

I would describe the main differences this way:

Pros - Rent is guaranteed by the government.  Sometimes the housing agencies help to correct behavior of a tenant who is violating a lease.

Cons - The biggest con is just government bureaucracy. Some agencies are better than others, but the bad ones are a nightmare and there is not much you can do about it. Also, I've generally found the average Section 8 resident to be more difficult to manage and they are rougher on the property than those with a security deposit to lose.

How to Start Investing in Section 8 Housing: Advice Needed

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