Should i rent to Section 8 or not?

Question

Is it better to rent to someone with a section 8 voucher or rent to someone without one? Rent would be the same for both.

Erin Dreher · Answer

Owners either like Section 8 or they don't. I always try to lay the pro's and cons of using it. There are definitely things you need to keep in mind like that most of the tenants do not have income coming in to pay for tenant caused damages. So when they move out you will most likely be paying for the all the work that has to be done. There also could be a potential for more wear and tear on the house. If someone is home all day that is just more flushes on a toilet and so on. There are also no repercussions for housing tenants if they trash a house, they can still stay on the program and move on to the next property.

On the flip side. Rent comes EVERY month. Though it is a slow process to get going it is consistent. And I have had a small percentage of tenants on housing that took good care of the property and stay for many many years.

I think I would base the decision on the location of your property. If the area is Class C or low income it may be best suited to use Section 8 so that you can get more in rent by using housing vouchers.

Anthony Napier · Answer

During the COVID-19 fiasco many renters were allowed to stay in my properties without paying rents. The Section 8 tenants paid on time the entire time. The rents were equivalent to market in Dayton and Springfield Ohio. More Sec 8 qualified landlords and properties are desperately needed. Those areas have many qualified tenant voucher holders that are not able to find safe, sanitary, and secure housing. I suffered financially not having more Sec 8 deposits coming in monthly during the Governments COVID-19 rental eviction moratorium. Moving forward I'm having a balanced mix to offset any future repeats. My business plan never accounted for the Government interference in my rental income business! When the moratorium was lifted, my nonpaying tenants vanished before I could take action to participate in the extremely slowly rolled out Emergency Rental Reimbursement Program. Section 8 Tenants properties are inspected frequently by my inhouse assistant. Tenants are given a payment plan to reimburse damages to the property they are responsible to repair. If they refuse to be responsible, I forward to them a notice that I will forward a damage report to the Housing Authority within 5 days if arrangements aren't made to rectify the situation. They respond 99% of the time and make payments and wake up to the reality that if they are denied future Sec 8 status they will have to reapply and go to the back of the three plus year waiting list to maybe be approved again for the program. Since 1986 I have experienced only one tenant going all the way refusing to make or reimburse for repairs. They were removed from the program. I've also had nonsubsidized tenants behave the same. You can do an extensive vetting of prospective renters and still find yourself in this situation. Remember, "If it was Easy...Everybody would be doing it!"

Richard F. · Answer

I realize different regions had a variety of different programs providing rental assistance via covid related funds, and many, including our State, also had moratoriums on evictions, or for that matter, court cases in general. However, when it first became apparent that covid was going to be a lengthy and serious problem, we immediately informed any tenant that reached out, that if they lost their job, or had severe cutbacks, we would accept partial payments (recommending a 50% payment), and work out a payment plan for the balance, without late fee or penalty when conditions moved back toward normal. We also gave them the option of vacating at any point during the pandemic with pro-rated rent only to their last day of occupancy, regardless of any remaining term. Several did decide to move  in with family, and yes, some of those vacated units sat empty for a very long time. Better vacant, than occupied and not paying. We also stayed abreast of the various funding sources and provided this info to tenants that needed it, and where necessary, we assisted them in applying for that funding. Those programs were terribly slow in processing and getting payments out to us, but in the end, we collected 100% rent for all occupied units for the period.

Devon Harris · Answer

good info.

Kolton Gutierrez · Answer

From what I gathered from other property owners as well as books I have read is that its usually a double edged sword. On the one hand your money (for the most part) is guaranteed as long as your tenants stick to the rules their program. As long as they adhere to the rules your money will always arrive on time. The downside to that is it is easy to get kicked off of these programs and then you are stuck with a tenant who cant afford rent. Also, these programs will pay you what they determine to be market rent, whether that be at/above/below what you had originally intended to rent the property for. So that could either help or hurt you depending on which side that swings. Another hard truth is that these lower income families tend to not keep up with your property as well. Whether they don't feel responsible for the property since it isn't their money paying for the rent or they just in general don't live clean and tidy lifestyle. Not saying every family on the program will destroy your property, but is the headache of this kind of tenant worth it? That's going to vary from person to person. And that's just my opinion. I'm sure there will be more people responding with more hopeful insight. Good luck!

Cliff H. · Answer

I’d recommend steering clear of qualifying based on income type, which risks running afoul of fair housing law. Define your qualification criteria, find a system that apply it universally, and accept the best match to your public criteria.

Should i rent to Section 8 or not?

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