Are you looking to invest in section 8 real estate but have heard it is too difficult? Many investors believe that section 8 real estate investing is not a good investment. In fact, as a seasoned section 8 real estate investor with 20 years of experience, it is quite common that I hear these four myths about section 8 tenants & investments;
4 myths of sections 8 investing
- Local housing is a challenging & difficult nightmare
- Section 8 voucher holders will trash or destroy your house
- Section 8 tenants are unemployed and don’t want to work
- As an investor you have to accept any and all section 8 voucher holders
1. Myth: Dealing with the local Public Housing Authorities (PHA’s) is frustrating, challenging and a nightmare.
Reality: Like any bureaucracy, navigating the local PHA’s isn’t always easy. But you must remember that behind all that paperwork and red tape, there are people. And those people are just doing their jobs.
It’s not a glamorous job, but they do have a lot of power to ruin your day if you approach them with hostility, as many people do.
Can you imagine how grumpy it would make you to have people berate you all day long?
I have found that the key to success with PHA’s is developing and nurturing relationships with the people behind the paper. Be the bright spot in their day and they are far more likely to help you through the maze of red tape and on your way to collecting rent!
#2. Myth: Section 8 voucher holders will trash and destroy your house if given a chance
Reality: As with market renters, there are tenants to screen and watch out for, but this sweeping statement just isn’t true – especially for what I call the “Tier 1” voucher holders.
The key is to screen thoroughly and properly to find those Tier 1 voucher holders and take very good care of them. The truth is they are people who generally want the same things as you or I do. They want a clean, safe place to live.
They want to raise their children in a good neighborhood with good schools. If you are set up to provide that to someone, along with dignity and respect, Section 8 tenants are likely to stay a long time and take very good care of your property.
In fact, with my system and policies, I see a lot of “pride of rentership” in my long-term Section 8 tenants. I’ve built some very good relationships with tenants on Section 8. They are just people who come with the added bonus of a stable source of rent payments.
#3. Myth: Section 8 tenants are unemployed and/or don’t want to work
Reality: There are many reasons people receive Section 8 vouchers. Some work very hard at low wage jobs. Some are getting back on their feet after some bad luck in life. And sure, there are some who fit the negative stereotypes.
There are some market renters who aren’t so great as well. All it means when a tenant has a Section 8 voucher is that their income is below Federal poverty guidelines and they are getting some stable assistance from the government to make their rent every month.
That’s it. From there, expect to find all types of tenants among your Section 8 applicants.
#4. Myth: As a landlord, you have to accept any and all Section 8 voucher holders if you’re open to any
Reality: You still get to screen! The truth is if you welcome Section 8 and have an approved property, you will get far more applications for that property than you could possibly accept.
This is good news! Screen to your heart’s content and of course, within the limits of the law. You can still pull credit reports. You can still call references. You can AND SHOULD conduct home visits and in-person interviews. Afterall, how they live now is how they will live in the future – in your property.
As long as your screening process is legal and compliant with Fair Housing Laws, you can use the same process for Section 8.
My advice is to take the credit SCORE with a grain of salt and be sure to look at the full credit REPORT. My application is pretty thorough at 8 pages long. If it matches up with the story told by the credit report, I know they are being honest.Dr. Joe Asamoah