How does accepting Section 8 affect the future marketability of a two-family rental property?

January 30, 2009 3:10 PM

How does accepting Section 8 affect the future marketability of a two-family rental property?

I know someone who owns a rental property and has had very few applicants over the last 12 months or so. They are losing money on the property and need to find renters quickly. They are also interested in selling the property but the Real Estate market is really struggling here. Currently, they do not accept Section 8 applicants.

posted by fishthefly to Work & Money (10 answers total)

From what people tell me, there are pluses and minuses with Section 8s. On the plus side, a check arrives on time each month from the government, removing the hassles of late or absent rent payments. Also, some states allow you to accelerate the eviction process for Section 8s that are using illegal drugs.

Although many Section 8s are good tenants, others are associated with the problems you often find with low-income housing, including drugs and property destruction. Renovation costs for apartments can be high when tenants are gone, and appliances may be missing. So if you decide to take in Section 8s, do a thorough background check, looking for prior evictions and the like.
posted by Gordion Knott at 4:12 PM on January 30, 2009

It works in the same way as getting paid rent from any other tenant, except it costs the tenants less. Section 8 tenants are just people, like any other renters.

There are no identifying marks on them or anything that would somehow make the property value go down because the place is being rented to *gasp* poor people.

In contrast to what Gordion Knott says, Section 8 recipients are made to go through various checks to keep their benefits, so in this way, they are a better class of tenant. They're actually less likely to cause damage or any other sort of trouble than unsubsidized renters because of what's at risk.
posted by cmgonzalez at 4:31 PM on January 30, 2009

Also, please don't treat poor people any differently (like potential criminals or trouble) just because they're poor. They have dignity too, you know.
posted by cmgonzalez at 4:51 PM on January 30, 2009

I lived in a building where the landlord rented to Section 8 tenants (as well as standard tenants) and they were, by and large, good and considerate neighbors. So seconding CMGonzalez not to be Judgy Judgerton on them. (Some of the rudest, most apartment-trashing neighbors I had, who left half-eaten hamburgers on our mutual stairway, were a pair of investment bankers. Money can't buy class or consideration.)

So yes, screen any prospective tenants, but they will have to do this with everyone and not single out the Section 8 prospective tenants for rigorous screening.

Incidentally, people with pets - as long as they are responsible pet owners with neutered indoor pets - often make good tenants because they will stay longer, and are extra-careful to avoid the negative stereotype of pet owning tenants. The owners might consider allowing someone with one indoor cat if a blanket "pets allowed" policy is too much.
posted by Rosie M. Banks at 4:55 PM on January 30, 2009

I can't speak to the Section 8 issue, but as a dog owner, it is damned near impossible to find good rental property, so if the landlord doesn't allow dogs, consider it. The demand for the property WILL increase.
posted by desjardins at 5:05 PM on January 30, 2009

So if you decide to take in Section 8s, do a thorough background check, looking for prior evictions and the like.

There's really no point, because the Housing Authority in your area that issues the Section 8 vouchers has to do all of this, and they have much better resources for the task. Credit checks, criminal background checks, landlord interviews, unannounced home visits... etc. As cmgonzalez says, Section 8 tenants are usually very good tenants for a number of reasons:

1. There are a number of eligibility restrictions for those hoping to get a Sec. 8 vouchers. So you don't have to worry about renting to rapists or murderers.
2. Almost universally, Sec. 8 tenants will have jobs or be receiving disability. By law they are not allowed to pay over a certain percentage of their salary to rent (30% if I recall correctly), which means they aren't going to be broke, forced to rob clothing from their neighbors. They're just normal people like you and I, living on hard times.
3. The rental amounts are evaluated on what's called fair market value, which naturally differs from neighborhood to neighborhood. But the good news for you is that you'll be getting a reasonable deal. If you have a fancy hardwood-floored, stainless-steel-applianced penthouse apartment, you might want to try the private sector. But if your place is just like everyone else's, it's nice to know you don't have to compete for a fair lease price.
4. Last, but certainly not least, you never have to worry about collecting the rent. This cannot be stressed enough. You are renting to the U.S. government. That's about as reliable a check as you can get these days.

posted by Civil_Disobedient at 6:41 PM on January 30, 2009

i'm a landlord with a renter on rental assistance. the biggest annoyance was having to deal with the agency's housing inspector coming by and telling me i needed railings on the stairs down to my basement.
posted by rmd1023 at 8:18 PM on January 30, 2009

Well, my dad actually owned some houses that he rented on Section 8 unfortunately the house was trashed at least a couple of times, I'm sorry to say. Maybe they've gotten better at doing background checks, since then but it was certainly no picnic.
posted by delmoi at 8:19 PM on January 30, 2009

My girlfriend's parents have three rental properties that they've been renting out for the last 15-20 years, and they say they much prefer a section 8 tenant to a non-section 8, because of reliability of government checks and the length of time section 8'ers stay put.
posted by bluejayk at 8:38 PM on January 30, 2009

My husband owns dozens of rental properties. 90% are rented to Section 8 tenants. To answer your specific question, renting to Section 8 tenants would not affect the future marketability of the property any more than other tenants, IF the property owner properly screens the tenant just like any other tenant. They are not different, the only difference is their rent is paid by the government. In our experience, the property inspection done by Section 8 is fairly intense, as your property must meet their standards.

My husband uses his people skills to vet tenants, and this is a very important step. His favorite trick to screen tenants is meet them at the property and find an excuse to walk by their car and check out the inside. If their car is neat and clean, and their children are polite and well-mannered, they usually always make good tenants. He does very few rentals now outside the Section 8 program, due to the difficulty and high cost of collection and eviction when tenants don't pay.
posted by raisingsand at 5:55 PM on January 31, 2009