Turning Rental Problems into Real Estate Profits

by | Aug 16, 2023

Section 8 Tenants

When I first got started in this business, I did take on Section 8 tenants, not right away, but after the first year. It worked out very well. In fact, over the lifetime of all the properties I’ve owned and over all the years, that first Section 8 family ended up being one of my best tenants bar none, whether you’re considering Section 8 or not.

In the beginning, Section 8 was really good. There were some rights and responsibilities that the tenants had, rights and responsibilities that the owners had, and rights and responsibilities that Section 8 had, the local chapter and also HUD which is Housing and Urban Development. Over the years it started to change and the pendulum swung more towards the tenant and less towards the owner—in other words, away from the owner. The owners were losing rights and tenants were gaining rights.

In fact, the owners were actually making less money. It’s not like they were making a killing off Section 8 anyway. Section 8 rents were supposed to be determined based on market factors, and in the mid-2000s, management was turning over in Section 8 at a rapid pace. They couldn’t keep good managers. Policies were changing and more importantly, their rules and regulations were changing. Procedures were changing. One of those changes was when it came time to determine what fair market value was for rent. They started including other factors that have nothing to do with how you determine fair market rent.

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