Interrupter CheckmarkInterrupter IconFacebookGoogle PlusInstagramGroupRamsey SolutionsTwitterYouTubeExpand MenuStoreCloseSearchExpand MenuBackStoreSign in

Ask Dave

Regular Vs. Section 8

Justin is debating if he should invest in regular rental property tenants or Section 8 housing, which has a guaranteed cash flow.

QUESTION: Justin is debt free and has some money to buy a rental property. When choosing a tenant, what are the pros and cons of having a normal tenant vs. the guaranteed cash flow of Section 8 housing?

ANSWER: The only pro of Section 8 is the government pays the bill. Some people in Section 8 are very nice people and passing through their poverty and working to get through it. Others are drug dealers and prostitutes. You don’t find as high a percentage of drug dealers and prostitutes when they’re paying their own bill.

Get in their face before they move into the property and let them know that you will call the cops if they make trouble. You need to do a physical inspection of the property once a month to make sure they are not rehabbing their car in your living room. I’ve had good people and deadbeats in Section 8 housing that I had.

I’m not a big fan of it just because I resent the whole thing in a sense. If you don’t watch it, they will tear it down. I’ve seen disasters in those situations. It is a high maintenance proposition, but you do get the guaranteed money from the government. I wouldn’t do it.