This week’s myth buster is for my soon to be and experienced investors. I often hear: “Section 8 is bad”.
I would like to make the case that this is FALSE. Many landlords shy away from having section 8 tenants. They think they are poor people with too many people in the unit and don’t care about taking care of the unit because they pay so little.
It could be that at one time that was true, but now, consider the following. Section 8 is a program that is part of HUD – the the Department of Housing and Urban Development of the US Government (also in charge of the FHA program and many others).
Section 8 in some areas has a waiting list. So if a landlord can prove that a tenant is destructive to a property, that person can be taken off the list and someone on the waiting list gets in. Therefore, the tenant who is getting assistance is strongly motivated to play by the rules.
It’s also hard to find another place to rent, so these tenants have less turn-over, therefore fewer vacancies, than the regular rental market.
The government pays their portion of the rent automatically and on time. Usually the federal government is paying the biggest share of the rent. I like that backing much better than someone’s own stand-alone ability to pay…
No fuss no muss.
Section 8 pays market rent, even “top of market” rent. Even if the rental market becomes soft, this market is always strong.
Inspections: It’s true that they do inspections to make sure that the property has no health or safety issues, but you wouldn’t want those kinds of issues anyway. As a responsible landlord you probably would do inspections once a year yourself to make sure you , or your manager, are aware of the condition of the unit since the tenant moved in.
If the tenant fails to pay their 10-50% of the rent, you still can evict them. You still have the right to state how many people are allowed in the unit before they rent, so the “too many people” is actionable by the clauses you have in your rental contract.
So, be open to the possibility that Section 8 tenants might just be your best bet.