Is Section 8 Good For Landlords or Not?

Aristotle Kumpis RealWealth Investment Counselor

Aristotle Kumpis


Summary: In this article, you will learn what it means to rent to Section 8 tenants and the pros and cons of becoming a Section 8 landlord. 


Whether you’re a brand new landlord looking to rent your very first income property or an experienced one with a massive portfolio to rent out, chances are you’ve at least considered renting to Section 8 tenants.

With benefits like government-subsidized income and free advertising, it’s not hard to understand the appeal. However for many, there are certain hardships of being a Section 8 landlord that outweigh the potential rewards.

In this article you’ll learn what it means to use this strategy and the pros and the cons associated with accepting housing subsidies for low income tenants. We’ll also explain how you can qualify to become a Section 8 landlord and find eligible properties for sale. Continue reading to learn more about this controversial strategy, so you can decide if it may be the right fit for you.

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What is Section 8

The Housing Choice Voucher Program, which was founded in 1937, is an affordable housing initiative that allows landlords to rent homes at lower market rates to qualified low income tenants.

In practice, the voucher program will pay the balance of a rent payment that exceeds 30% of a renters monthly income. The federal program, run by Housing and Urban Development (HUD), is carried out by the local Public Housing Authority of each state.

Prior to being approved as a Section 8 landlord, units must be inspected and approved by the local housing authority and the rental amount must be at or below the Fair Market Rent set by HUD. The local Public Housing Authority will directly pay the subsidy amount to the qualifying property/landlord. The amount of rent not covered by the voucher, will need to be paid by the tenants.

Project Based vs Tenant Based Section 8


The tenant-based voucher is attached to the tenant. When the tenant moves, the assistance can move with them.

It’s important to note that the demand for Section 8 housing far exceeds the supply. In other words, tenant vouchers are extremely limited and many individuals and families must put themselves on long waiting lists. Once a voucher has been received, there are often strict rules that the tenant must follow to avoid losing the voucher and being forced to reapply.


The Project-Based voucher is attached to a specific property. When tenants move into a property that participates in the Project-Based Section 8 Program, they receive the same type of financial assistance as tenants with a voucher. However, if they move the program benefits stay with the property, benefiting the next resident of that home.

In this case, the landlord must qualify for the voucher and then qualify tenants independently (the tenant does not have to work through HUD directly). Qualifying properties also tend to have long waiting lists.

Renting to Section 8 Tenants: PROS

Renting to tenants with housing vouchers is a great option for many landlords. There are a variety of reasons for this; it can be profitable, the housing authority is not as difficult to work with as many people think, and properties usually rent more quickly (lower vacancy rates mean even more profit). With that said, how well it will work for you as a landlord largely depends on how you run your business.

For example, large property management companies can easily handle the extra work that accompanies Section 8 rentals, while private landlords may not have the time to invest in the program. Below, is list of the top 5 benefits of renting to tenants with housing vouchers.

11 Benefits of Renting to Section 8 Tenants

  1. Consistent Rent Payments Made by the Government
  2. Pre-Screened Tenants
  3. Constant Tenant Base (Lower Vacancy Rates)
  4. Less Turnover (Another Reason for Lower Vacancy Rates)
  5. Tenants are Motivated To Pay their Portion of Rent
  6. Less Delinquency
  7. Fewer Evictions
  8. Better Profit Margins
  9. Free Advertising
  10. Business Support Scholarship
  11. The Joy of Being Able To Help People in Need

1 – Consistent Rent Payments Made by the Government

The biggest perk of accepting Section 8 subsidies is that a substantial part of the rent money you are owed will show up on time each month via direct deposit or a mailed check. Also, tenants will typically pay their portion on time, because failure to do so can cost them their housing voucher.

Another key factor is that, even if the tenant loses their job or receives lower wages than before (like during a Global Pandemic like COVID-19), the government will continue to make up the rest of rent that the tenant is unable to pay, after their 30% of income amount. As a landlord this can help you avoid rental payment issues that could arise from a full-paying tenant facing a similar financial dilemma.

2 – Pre-Screened Tenants

Another benefit for landlords is that tenants are pre-screened by the housing authority. In addition to qualifying a tenants income, the housing authority also performs criminal background checks and drug testing for all household members that are 18 years of age and older. This screening process may provide extra protection for your rental, as tenants have to pass both your tenant screening process and the housing authority’s.

3 – Constant Tenant Base (Lower Vacancy Rates)

The Housing Choice Voucher Program is popular and most urban areas have hundreds (if not thousands) of tenants on their waiting lists. As such, by participating in the program, your property becomes marketable to a wider pool of tenants which gives you a better chance of getting it rented quickly.

4 – Tenants Often Stay Longer (Another Reason for Lower Vacancy Rates)

Because Section 8 guarantees rental assistance for individuals who qualify (as long as there isn’t a big change in income or family size), most of these tenants stay longer. This is another big contributing factor to the lower vacancy rates Section 8 landlords usually enjoy.

5 – Tenants are Motivated to Pay their Portion of Rent

HUD sets Fair Market Rent at a level that is in the 40th percentile for the rents in the area. Put simply, this means that 40% of homes in the area rent for less than this amount and 60% rent for more than this amount. As such, rents are slightly lower than the median rental price for that area. In some more expensive metropolitan areas Fair Market rent is set at the 50th percentile.

This is important for Section 8 landlords, because it means that low-income tenants will be able to afford their portion of the rent. These tenants also really want to pay their rent, because they want to keep their Section 8 vouchers.

6 – Less Delinquency

The Property Teams we work with at RealWealth often report that tenants using Section 8 vouchers have fewer delinquencies than non-Section 8 tenants. This makes sense, because Section 8 tenants want to keep their Section 8 vouchers so they can continue enjoying the benefits that this program offers.

That said, if a Section 8 tenant is delinquent on their rent you can evict them as you would a normal tenants. In some cases, this process can take longer, however. There can be more red tape to jump through.

7 – Fewer Evictions

This Section 8 benefit goes hand in hand with the one above. Most Section 8 tenants want to keep their vouchers, so they will do their best to keep your property well maintained and to follow the lease agreement.

8 – Better Profit Margins

While it might not be true in every real estate market, in many areas the rent you can get from a tenant using a Section 8 voucher is higher than what you can get in your typical C (or even D) neighborhood. When you couple this fact with the consistent and timely rent payments you’ll receive from government and the willingness of Section 8 tenants to pay their rent, many landlords enjoy (and some even prefer) Section 8.

9 – Free Advertising

The U.S. Department of Housing and Urban Development has a website that prospective tenants can use to find qualifying low-income housing. Several local housing authorities also maintain websites or a separate lists of landlords who accept housing vouchers in their areas. Both of these services are provided free of charge to tenants and landlords.

10 – Business Support Scholarships

There are companies that offer scholarships to Section 8 landlords to obtain advanced property management training as well as discounts on everyday property management supplies. You can contact your local housing authority to learn about these opportunities.

11 – The Joy of Being Able To Help People in Need

While there are a variety of benefits of becoming a Section 8 landlord, one of the biggest is being able to help someone in need. ?

Renting to Section 8 Tenants: CONS

While there are many benefits of renting to Section 8 tenants, there are also some potential disadvantages. It would be wise to talk to participating landlords in your area to learn how it is going for them. In the meantime, here are 11 disadvantages that to be aware of. Please note that these will not apply to all section 8 landlords or tenants!

11 Disadvantages of Renting to Section 8 Tenants

  1. Rental Pricing Regulations
  2. Risk of Renting in Lower Income Areas
  3. Restrictions of Section 8 Tenants
  4. Don’t Receive Voucher Payment Until Tenant Moves In
  5. HUD Does Not Pay Security Deposits
  6. Annual Property Inspections
  7. Potential for Difficult Tenants
  8. Property Damage Issues
  9. Harder to Evict Difficult Tenants
  10. Full-Paying Tenants May Turn Away
  11. Difficulty Selling Properties to Free Market

Please note: Section 8 varies from city-to-city, so make sure to check with your local housing authority about their specific rules and regulations before making any decisions about becoming a Section 8 landlord.

1 – Rental Pricing Regulations

Complying with the Housing Voucher Program entails setting rental prices according the Fair Market Rent (FMR) calculated by HUD. They make these calculations based off of the number of bedrooms in a unit and sometimes the value of your property. This will vary according to your specific county.

During the screening process, tenants are approved by HUD for a voucher covering a 1-bedroom or greater unit, depending on their family size. In order to qualify as a Section 8 landlord, your 1+ bedroom units will need to match the dollar value of these vouchers.

For example, if HUD says that the FMR in your county/community for a 2-bedroom is $900 dollars, you will be asked to keep your rental rates at $900 or less. Therefore, if you are a landlord with a property in a higher-rent neighborhood wanting to receive market value, it may be near impossible to find renters of Section 8.

2 – Risk of Renting in Lower Income Areas

As mentioned above, if you own property in a higher-income area it likely won’t make financial sense to accept housing vouchers. While there is considerable profit to be made from the housing program in lower income areas, there are some risks to be aware of, including:

  • More crime and drug issues
  • Increased property damage
  • City authorities ignoring water/safety issues in the area
  • Less appeal to potential renters

3 – Restrictions of Tenant Vouchers

Tenants must comply with many HUD restrictions. One restriction is the number of bedrooms in a rental unit. For example, a household of 3 people will qualify for a two-bedroom voucher; therefore, the tenants will be looking for units only with two bedrooms. HUD will subsidize for this particular family on a two-bedroom rental, paying the rest after what the tenant is required to pay, which is 30% of the household’s income.

4 – Don’t Receive Voucher Payment Until Tenant Moves In

A common dilemma is when you will receive your first rental payment. Typically, you will not be paid by the housing authority until after the tenant moves into the property. This is mostly due to the administrative process, which can be quite slow initially. However, once you receive the first payment, you should expect consistent payment each month.

If you do not have the financial ability to wait a couple of months to receive the first month’s rent, then you might want to reconsider renting to Section 8 tenants.

5 – HUD Does Not Pay Security Deposits

HUD provides housing vouchers that pays toward the tenant’s monthly rent, public housing authority does not pay security deposits (which are typical for most rentals). If you wish to collect a security deposit, you’ll have to collect this directly from the tenant. This could be an issue because the tenant has already shown to have income problems.

6 – Annual Property Inspections

After the initial housing inspection, you will need to be ready for annual re-inspections by the housing authority. There are 13 main categories of safety they look at, and it is not uncommon to fail in one of these areas (or more). An example of a hazard that could cause you to fail an inspection would be a broken handrail.

If you do fail the inspection, you will be given a list of items that need to be fixed. Once you fix all items on the list, you can schedule a re-inspection with the housing authority office. They will once again send the inspector to determine if all issues have been fixed.

If you are consistently doing your own inspections and fixing issues as needed, these inspections can go smoothly. However, if you have problematic tenants or do not perform regular managerial inspections, an inspection from the housing authority might be very stressful and a nuisance.

7 – Property Damage Issues

Many landlords are wary of Section 8 tenants. Since these tenants are not paying much for the rental, they have less incentive to keep the property in great shape. However, the opposite could be said because tenants have more incentive to stay in good status with the landlord’s policies to avoid losing their voucher. The risk of property damage may or may not increase with tenants in the program.

8 – Potential for Difficult Tenants

It is assumed that Section 8 tenants are in a financial bind and, even with the housing subsidy, may still have difficulties paying their percentage of rent. For example, many individuals that qualify for housing vouchers are physically or mentally unable to hold a job or much of one. This may be from complications with old age, disabilities, or other health issues. Considering their personal hardships, they may not be able to maintain a high standard of property upkeep and cleanliness. They also may require more safety features and assistance throughout their rental period.

9 – More Work to Evict Difficult Tenants

In a Section 8 eviction you will need to abide by state and local laws governing evictions just like with any other tenant. More work to evict comes into play as you will need to send copies of documentation throughout the eviction process to your local housing authority office. This includes copies of notices sent to the tenant explaining the violation(s) and when corrections need to be made to avoid eviction.

Additionally, some states have created rules requiring notification that the landlord receives permission from the housing authority to proceed against the tenant in court. Tenants do know, however, that if they receive a court eviction order, they will lose their voucher so, more than likely, they will try to fix the problem before hand.

10 – Full-Paying Tenants May Turn Away

Full-paying tenants may be turned off by your property if you have Section 8 tenants, because of the negative stereotypes associated with low income individuals. They may assume the worst of these tenants and not want to be their neighbor.

You cannot change the way others feel, but you can make sure your property is well maintained and appealing. In addition, it would be wise to only accept vouchers from tenants with a good standing rent history.

11 – Selling Section 8 Properties to Free Market

It may be difficult to sell your property with Section 8 tenants later down the road. Potential buyers who are not interested in accepting housing vouchers may not want to deal with the hassle of ending leases to be able to rent to the free market again.

The Future of HUD Section 8 Changes

The security in real estate and of affordable housing opportunity for all is always a balancing act. There are never any guarantees with real estate or government assistance, such as in the housing program. In 2018 and 2019, government officials made budget cuts in assistance programs for low-income individuals and families.  HUD has also recently enacted a change in Fair Market Rent calculations. It is important to be aware of potential HUD changes to the low-income housing program.

Federal Funding Cuts

We are all aware that government leaders and the financial stability of our country are always changing. Currently, there have been substantial cuts and According to Center on Budget and Policy Center, “Among these are substantial cuts in low-income housing programs that would affect a broad swath of low-income households, including several million working families with children, seniors, and people with disabilities.” 1 Having that said, there may be fewer vouchers or added regulations that will trickle down making things more difficult for Section 8 landlords.

With budget cuts projected to continue throughout the next decade, we are left to wonder how the Housing Choice Voucher Program will be affected. If vouchers were eliminated, would you have a difficult time renting your unit to full-paying tenants? Is your rental located in an area where people want to rent and is well maintained to appeal to most renters? Real estate and federal funding are always changing; therefore, Section 8 landlords need to be extra prepared to switch gears in how they rent and what they rent.

Restrictive and Changing Laws

Laws for landlords accepting tenants receiving rental assistance can vary greatly by city. In some cases, cities have laws to prevent discrimination of those with housing vouchers and other cities may be loose on their guidelines of Section 8 rentals. If you live in a city with many rules and laws governing low-income vouchers then it may be more of a hardship for you as a landlord then it is worth. Where as if you live in an area where there aren’t many rules, it may seem easier; however, loose rules can create uncertainty and lack of organization.

As of April 1, 2018 the Small Area Fair Market Rent rule has been enacted by HUD. This has changed the calculations of FMR in metro areas because calculations are done by zip code and not just areas within a zip code. This means that higher income areas are included with the lower ones when calculating fair market rent. This is intended to help increase housing options to Section 8 recipients other than just low-income areas. However, these recent and upcoming changes create uncertainty in both the minds of recipients and landlords.

Chief Ben Carson of the Department of Housing and Urban Development (HUD) is known to oppose aspects of the housing assistance program. He is currently proposing an increase of the percentage that low-income tenants contribute toward housing, from the current 30% to 35%. This may change the dynamic of the Housing Choice Voucher Program and tenants’ ability to keep up with their portion of rent.

How to Become a Section 8 Landlord

After reading about the pros and cons of becoming a section 8 landlord, you may be wondering how to get started. In order to accept housing vouchers, your local housing authority must approve both you, the landlord, and your property. Below is an outline of how to qualify as a landlord in the Housing Choice Voucher Program.

  1. You will need to contact your local public housing authority. The housing authority contact information can be found on your state’s Public Housing Authority website. Each housing authority has different preferences and requirements based on their service area affordable housing needs.
  2. The housing authority inspector will meet with you and inspect your property to make sure it meets all local building and safety codes. They will use a government inspection form. They will also review your rental rates to ensure that they fall in line with rates for comparable dwellings in your area.
  3. Once the inspector approves your property, you will sign a W-9 and paperwork to then begin accepting Section 8 housing vouchers. At that point, you find your own tenants or they find you.
  4. Then, once a month, the housing authority will mail you a portion of the rent or directly deposit it into your bank. The tenant will pay you the rest. Although your rental rate may stay the same, the amount paid to you by the government may fluctuate depending on the Section 8 tenant income.

How To Find Section 8 Properties for Sale

Looking to purchase pre-existing Section 8 rental properties? A place to begin your search is the U.S. Department of Housing and Urban Development. There may be properties that are currently rented and simultaneously for sale. It might just be a phone call to that existing landlord to know if their property is for sale.

If you are buying a property with current voucher tenants, you may keep this status with those tenants by both the seller and you, the buyer, signing a landlord exchange on a W-9 form.

Purchasing a property with current Section 8 tenants may be a jump start; however, keep in mind that you can become a Section 8 landlord anywhere you choose and feel is a wise business decision. All or part of your rental property can be rented as long as you have followed the HUD guidelines.

At RealWealth we also offer Section 8 inventory through property teams in our network. To view sample Section 8 properties, visit the Investor Portal. Click here to get started. (Note: the Investor Portal is only accessible by RealWealth members. Sign up today in less than 5 minutes. Membership is always 100% free. ?)


Is Now the Time to Invest in Section 8 Housing?

There could very possibly be an influx of renters who need government subsidized housing during and following the wake of the COVID-19 Pandemic. 

HUD-owned property is still available and now may be a great time to invest in section 8 housing!

How Will Biden’s Presidency Impact Landlords?

Control of the Senate will be determined by two runoff elections in Georgia on January 5, 2021. If the Democrats aren’t able to win these seats and take control of the Senate, then it will be a lot harder for Biden to pass his plans for housing. 

Biden’s overarching plans include expanding affordable housing, particularly for low-income American’s. Currently, the Fair Housing Act aims to 1) put a stop to housing discrimination, and 2) promote diverse inclusive communities.

One of Biden’s affordable housing proposals includes more funding for Section 8 housing vouchers. The plan would entitle all eligible Section 8 people to receive vouchers to help pay for housing. 

Even with the 2 million low-income households that do receive government funding under Section 8, there’s still a huge need. According to HUD, about 75% of households that are eligible for Section 8 vouchers do not receive them. In many places, there’s up to a two year wait for housing assistance because the program is so underfunded. 

The second component of Biden’s affordable housing initiative is to stop discrimination against renters using Section 8 vouchers. If passed, this would mean that all landlords would have to accept Section 8 tenants. 

To accomplish the second goal of the Fair Housing Act, Biden plans to bring back the Affirmatively Furthering Fair Housing (AFFH) rule created by the Obama administration. The rule was eliminated by Trump not too long ago.  The AFFH would require cities that receive money from HUD to create a plan to end housing discrimination at a local level. 

Solomon Greene of the Urban Institute was on the team that drew up the 2015 fair housing rule.  According to Forbes, Green explains, “The 2015 AFFH rule offers guidance, not a particular solution. Every plan I’ve reviewed has been incredibly diverse; there was a huge range of strategies depending on the area. This is very far from Trump’s assertion that the AFFH rule was requiring rezoning of suburbs or even to build affordable housing.”

On the other hand, there are many objectors to Biden’s approach to affordable housing, saying that spending billions of government dollars won’t solve the bigger issues going on–like an affordable housing shortage.

If Democrats can win the majority of the Senate this January, it will be a lot easier for the Biden administration to push their plans for affordable housing through congress. If Republicans retain the Senate majority, it’s likely there will continue to be a great divide between the House and Senate. As such, plans to expand affordable housing may be stymied.

To learn more, check out our CEO, Kathy Fettke’s predictions for how Biden’s presidency might impact the housing market in 2021-2024 and potentially longer if he wins a second term.


As you’ve learned, there are compelling pros and cons you should consider before renting to tenants in the Housing Choice Voucher Program. Renting out your property in general has its advantages and disadvantages; but when considering becoming a Section 8 landlord, you will want to weigh-out the additional pros and cons.

As mentioned previously, with the long tenant wait list for low-income rentals, you will always have tenants ready to move-in and sign a lease. Although, you it can be easier to find renters, you cannot be guaranteed to charge the highest rent amount or that these tenants will be the most responsible. There are also no guarantees in real estate – it’s always possible that you can lose your Section 8 status, so you’ll need to stay prepared for that. Hopefully, you are now ready to make a well-informed business decision!


  1. Trump Budget Deeply Cuts Health, Housing, Other Assistance for Low- and Moderate-Income Families – Center on Budget and Policy Priorities
  2. Housing Choice Vouchers Fact Sheet –
  3. How to Become a Section 8 Housing Landlord – Requirements, Pros & Cons – Money Crashers
  4. Common Questions About Section 8 Housing – Affordable Housing
  5. Section 8 Eviction Explained – Apartment Ratings
  6. The Advantages of Renting to Section 8 Tenants – The Balance
  7. Should You Accept Section 8 As A Landlord? – Forbes
  8. How a New HUD Rule Changes Section 8 Housing Vouchers – U.S. News & World Report
  9. HUD chief Ben Carson proposes hiking rents for some low-income Americans getting housing subsidies – Fox News

Aristotle Kumpis RealWealth Investment Counselor
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