because Section 8 tenants may not take care of the property as well as other tenants, causing more damage and therefore more turnover.
The Great Debate: Renting to Section 8 Tenants
The question of whether or not to rent to Section 8 tenants is a hot topic in the real estate world. Just a year ago, if you had asked me if I would consider renting to them, I would have firmly said no. But since then, I have learned more about the pros and cons of Section 8 and my stance has shifted. In fact, I have come to realize that in some cases, it may even be the better option.
Understanding Section 8
Most people are familiar with the basics of Section 8 tenants, but for those who aren’t, here’s a quick rundown: the government provides financial assistance to low-income individuals or families to help them secure housing. The government pays a portion of their rent each month, while the tenant is responsible for the rest. And let me tell you, the government pays a pretty penny. At least, that’s been my experience compared to what the tenants themselves contribute.
The Risk Factor
The general perception is that Section 8 tenants are low-income and therefore pose a higher risk for the quality of their tenancy. It’s assumed that they will cause more damage to the property and not take care of it. While this may not always be the case, it is a realistic concern. However, it’s important to note that not all Section 8 tenants are bad quality. In fact, there are many who take immaculate care of their homes. It’s just that the risk of getting a less-than-stellar tenant is higher compared to renting to higher income individuals in nicer areas.
To Rent or Not to Rent?
So, should you rent to Section 8 tenants? It’s ultimately up to you as the owner, and you should never do anything you’re not comfortable with. However, it’s important to have a good understanding of the pros and cons before making a decision. Here are a few to consider:
The Pros of Section 8 Tenants
1. Guaranteed Rent
For any investor who has struggled to collect rent from tenants, this is a major plus. With Section 8 tenants, the government is responsible for paying the rent each month, so you can count on receiving your check on time.
2. Less Vacancies
While not guaranteed, it’s common for Section 8 tenants to stay in one place for longer periods of time. This is because the government is covering a large portion of their rent, so they have less incentive to move. This can mean less turnover and fewer vacancies for landlords.
However, it’s worth noting that some argue that Section 8 tenants may actually cause more vacancies due to potential damage to the property.
3. Potential for Higher Rent
In some cases, the government may pay more for a Section 8 tenant’s rent than what a landlord could charge on the open market. This means landlords can potentially earn more from renting to Section 8 tenants.
The Cons of Section 8 Tenants
1. Higher Risk of Property Damage
As mentioned earlier, there is a higher risk of Section 8 tenants causing damage to the property. This can result in additional expenses for landlords and potentially lead to more vacancies.
2. More Regulations and Inspections
Renting to Section 8 tenants means adhering to certain regulations and undergoing regular inspections by the government. This can be time-consuming and may require additional expenses for landlords to ensure their property meets the necessary standards.
3. Limited Pool of Potential Tenants
By choosing to rent to Section 8 tenants, landlords are limiting their pool of potential tenants. This can make it more challenging to find suitable tenants, especially in areas where there may be a stigma attached to Section 8 housing.
The Bottom Line
Renting to Section 8 tenants is a personal decision that should be carefully considered. While there are potential benefits, there are also risks involved. It’s important for landlords to weigh the pros and cons and make an informed decision that aligns with their goals and comfort level.