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Affordable Housing / Section 8

The Advantages and Risks of Becoming a Section 8 Landlord

July 5, 2023

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Is Becoming A Section 8 Landlord Right For You?

The term “Section 8” can be a controversial one in many real estate circles. While we can all agree that affordable housing is necessary and beneficial for society, not every investor wants to take the risk to make affordable housing a reality. Plus, plenty of stereotypes circulate about Section 8 properties, including that they are undesirable, poorly maintained, or unattractive. 

Despite these stereotypes, however, there are many reasons many landlords can and do rent to Section 8 tenants. The HUD incentives and general benefits for landlords to get involved in the program inspire many to apply to the program each year. 

So, could Section 8 investing be for you? In this article, we’ll help you decide by taking a balanced look at some key advantages and risks of becoming a Section 8 landlord.  

Advantages of Becoming a Section 8 Landlord 

#1 Assured Rental Payments 

Many landlords have an assumption that renting to low-income tenants will lead to late payments and rent instability. However, often the opposite is true—government subsidies mean that at least 70% of your rental income is assured every month. 70% of the rent is guaranteed funds that you’ll receive via direct deposit in your bank account each month, which is more than can be said for many landlords who rent traditionally. Plus, the local public housing agency (PHA) who works with the Section 8 family ensures that their portion of the rent is an amount the family can reasonably afford. 

#2 High Demand 

The number of low-income families who qualify for the Section 8 program far outpaces the number of affordable housing units available, resulting in exceedingly long waitlists in most areas. In some cities, the wait lists are so long that PHAs have had to close them for the next several years because there will be no available vouchers in the near future. For landlords, this means there will always be high demand for Section 8 rentals if you accept housing vouchers.  

#3 Low Vacancy Rates 

Along the same lines, high demand for the Section 8 program leads to fewer vacancies over time, which is always good news for landlords. If you accept Section 8 housing vouchers, you likely won’t have extended vacancies, as the wait list is always full of eligible families in need of safe, sanitary, and affordable housing. 

#4 Free/Cheap Marketing 

One of the most underrated Section 8 benefits is the availability of free marketing. Once you are accepted into the program by filing a Request for Tenancy Approval (RFTA) form with the HUD, your local PHA will often connect you with resources and listing opportunities to get the word out about your Section 8 properties. Additionally, it’s free to list a property on 

#5 Competitive Angle 

Even if your neighbors struggle to keep their units occupied, you know you’ll always have Section 8 tenants waiting for a spot. Being open to a large demographic and market of renters can give you a competitive angle against nearby investors who won’t accept vouchers. 

#6 Regular Rent Increases  

Another little-known benefit of the Section 8 program is that local PHAs typically administer generous rent increases each year to compensate for rent inflation. In some cases, it’s even possible that Section 8 rental rates will be above market rates for a property in the area. In medium- to lower-income neighborhoods especially, renting to Section 8 tenants can help you generate more rental income than you would be able to otherwise. 

#7 Long-Term Stability 

Accepting Section 8 tenants also leads to longer average tenancies, as eligible families know it will be difficult to find other landlords who will accept their vouchers. Families who manage to secure a voucher only have a few months to find a landlord who’ll accept it, and once they do, they won’t want to lose it. This means less tenant turnover, which, as you know, is one of a landlord’s most notoriously burdensome expenses. 

#8 Incentivized Renters 

Section 8 families have a very good reason to take care of your property: If they don’t, they could be evicted and lose their housing voucher. This extra accountability keeps many Section 8 renters incentivized to take care of your property. 

#9 Play a Role in Reducing the Affordable Housing Crisis 

The current rent unaffordability crisis in many parts of the U.S. is an increasingly urgent concern. And while affordable housing programs are clearly a benefit to renters, affordable rents also matter for your success as an investor. 

Being able to charge high rents is of course a good sign of a healthy and profitable investment. But if lower-income workers who sustain the local area can’t afford to live in that area anymore, neither will the renters who can afford it. They’ll move away from the area to be closer to essential goods and services, leaving you with vacancies in the long term. For this reason, it’s important to have affordable housing integrated with market rate rentals to ensure areas have housing to serve multiple income levels. 

By allowing families to choose their housing instead of assigning them to specific low-income public housing units, the Section 8 program also works to integrate these families with traditional renters and reduce the stigma and stereotypes about what low-income housing looks like.  

Risks of Becoming a Section 8 Landlord 

Despite the many benefits outlined above, it would be negligent not to include some of the risks involved as well. There are some caveats and less attractive aspects of the program for landlords. 

As you review the list of risks below, you’ll notice that ‘tenant quality’ is not on it. That’s because if you’re doing your job as a landlord, you will eliminate all low-quality tenants—including Section 8 ones—as part of your tenant screening process. If you receive an applicant with poor credit, prior issues with landlords, or even a serious criminal conviction, you shouldn’t take a risk on them. While it’s true that lower-income tenants are associated with negative factors like crime, lower credit, and more risk (and certainly Section 8 investing is not for everyone), this isn’t a problem inherently built into the Section 8 program. It’s up to you as a landlord to ensure you’re screening properly and only accepting qualified applicants. 

#1 Bureaucracy and Red Tape 

The most common critique of the Section 8 program is the high amount of bureaucracy and red tape involved. As a government funded and operated program, Section 8 naturally requires lots of paperwork for both you and the Section 8 tenant, including the Request for Tenancy Approval (RFTA) form and the Housing Assistance Payments (HAP) Contract. You’ll have to be willing to patiently navigate this bureaucracy before you can accept your first Section 8 tenant. 

#2 Initial Delays 

Because the HUD is often understaffed, the processing of these documents could be slow. There is commonly an initial delay in renting to a Section 8 tenant due to the inspection process. If there’s a window without a lock, evidence of mold, or any other problems with the unit, you’ll need to make the repair and start the inspection process all over again. In most cases, you can expect to wait around 30-60 days for the first rent deposit from the PHA.  

#3 Less Control 

Working with a government program means you’ll generally have less control during the leasing and renting process. You aren’t the only one who determines what the rent rate will be or which repairs the unit needs. Additionally, a family’s eligibility for the program may change at any time, which is another factor outside your control. 

#4 FMR Regulations 

Public housing agencies use what’s called Fair Market Rent (FMR) to set a baseline for what a Section 8 family should pay each month. FMR is generally around the 40th percentile of the rent in any given area, but it can vary depending on other factors. Although the landlord’s asking rate for the unit is considered in the determination of the rent, finalized rents may fall slightly lower than the market rate for that unit, especially for high-value properties. 

#5 Security Deposit Issues 

One of the biggest disadvantages of renting to Section 8 tenants is that although PHAs provide the tenant with subsidies for rent, they do not guarantee funds for security deposits. You can charge your Section 8 tenant one anyway, but more likely than not, they won’t be able to afford it. As a Section 8 landlord, it’s up to you to decide if and how you’ll collect security deposits from your voucher tenants. 

#6 Government Scrutiny and Yearly Inspections 

As a Section 8 landlord, your unit(s) will be subject to yearly inspections and scrutiny from the PHA. The HUD is strict about the standards of safety and decency they guarantee to program participants, and it’s your job to adhere to those standards. If you don’t, the PHA will stop providing the subsidy. It’s unlikely that the family will be able to afford your rent without the PHA’s help, so you will have to remove the tenant and re-fill the unit.  

#7 Less Profitability for High-Value Investors 

Section 8 is not right for everyone, and it’s an especially challenging for landlords who invest in high-value properties. It’s very unlikely that the PHA will allow you to set a rental rate for your Section 8 tenants that is anywhere near the market rate you’d get for the units on the private market, so Section 8 is usually not a good fit for those investors.  


The Section 8 program is one of many efforts by federal and local governments to provide affordable and safe housing to U.S. families. Participating in the program is a choice in most states, and it’s not right for every landlord, but it offers benefits to many. Consider each of the pros and cons in this article before making your decision. 

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