Section 8 Eviction Process And Why I’m Doing One

I’m currently working through a Section 8 eviction in Detroit.

Read that again… yes, I’m evicting a Section 8 tenant.

Most people will find that shocking. 

Isn’t Section 8 guaranteed rent?

Why would you evict a Section 8 tenant when the government is paying you monthly like clockwork?!

I’ve written a fair bit on Section 8 investing. And most of my articles take a critical or contrarian view on investing in Section 8 rentals.

Why?

Because I see so many newer investors getting lured in by this “strategy”. They’re buying $5,000 guru courses, thinking they’ve found some silver bullet or investing hack.

So, like everything, I try to balance the good with the bad. Very few people talk about the drawbacks of Section 8.

In this article I’m going to tell you why I’ve started the process for a Section 8 eviction even though the full rental amount is subsidized by our beloved government.

Let’s get started!

How We Got Here

The tenant in question is the original tenant we placed in this home back in November 2019. 

I had a number of applicants for this house, and most of them were not Section 8. But we decided to give this woman a shot. 

She loved the home, her parents showed up at the open house, and her dad was seemingly handy. It felt like it was going to be a good fit.

And I knew a bit about the Section 8 process already because our initial Detroit purchase had a Section 8 tenant living in it at the time.

We had a lot of challenges with this home. And if you’re curious about what we went through and how it has performed, I have the full write up here.

But once we finally stabilized the house we were happy to put it out of mind. We pretty much knew our tenant was being rough on the property. But there was a side of us that didn’t care.

We were going to ride it out as long as possible, letting the cash flow accumulate, and then deal with things when we’d eventually have to do a turnover.

And it seems that day may be coming sooner than later!

What Triggered Our Section 8 Eviction

The other week we received a notice in the mail for two blight tickets from the city of Detroit. 

These happen when people aren’t taking care of their yards which means (shocker) our tenant wasn’t abiding by her lease terms.

My wife was pretty pissed. And it was the final straw for her.

We’d had some back-and-forth with the tenant for months about the yard and she always gave us the runaround. 

My wife had had enough and decided we would start the eviction process.

I wasn’t so thrilled about it.

Kaitlin and I generally divide and conquer on the property management side of things. 

She does a lot of the tenant interfacing, and I’ll do a lot of the coordination with maintenance folks when things need to be fixed.

And I also do a lot of the turnover stuff. And that’s a nightmare to do from out-of-state.

Knowing that our tenant has been pretty rough on the property, I was dreading having to turn this house over. 

So we talked things out and decided we’d first start this Section 8 eviction by understanding the process.

Come to find out, evicting a Section 8 tenant has one big advantage over a normal eviction.

Section 8 Evictions Continue To Pay Rent

I had a hunch that if we proceeded with evicting our Section 8 tenant we’d continue to receive rent payments from our housing department. 

And turns out, I was right!

We talked to our case manager and she confirmed that payments would continue throughout the eviction process.

That was music to my ears.

Most of the time, when you’re evicting a tenant, that tenant is no longer paying rent. That means, in Detroit at least, you’re looking at 3 – 4 months of no rental income.

It sucks, but it isn’t the end of the world.

But our Section 8 eviction is different. We could go through the 3 – 4 month eviction process and get paid the entire time like normal.

And with this house and tenant, Section 8 covers 100% of their monthly rent. 

I was now on board moving forward with the eviction, but I’m still hoping we can avoid it.

We’re Hoping Not To Evict

Ultimately, I’m still working to avoid going through with this eviction.

And my reasons are purely selfish.

I do not want to do a turnover on this home. I know it’s going to require a light rehab to get it rent ready again, and that could be anywhere from $10,000 to $20,000. 

I just don’t want to spend it right now, and I really don’t want to coordinate all the moving parts from 2,000 miles away.

So we’re using the eviction as leverage. We’ve told our tenant that we need three things to happen for us to stop the eviction process.

First, we need the yard cleaned up. She’s done this already, so that’s some progress!

Second, we need to be reimbursed for the blight tickets. We paid over $400 toward these and we’re still waiting for her to reimburse.

Finally, we required a Section 8 inspection so we can get eyes on the property and fix anything that needs to be addressed.

Somehow, the tenant has managed to skirt the annual Section 8 inspection for the last 5 years. 

Don’t ask me how!

She agreed, and we’ve had an inspection done. We’re now working to resolve the punch list items before the end of the month.

If we can get all that done, honestly, I’d probably eat the blight tickets. Keeping her in the home and avoiding a turnover is a far better option for me long term.

Lessons From A Section 8 Eviction

Evicting a Section 8 tenant is no different (at least in Detroit) than evicting a non-Section 8 tenant except for one big thing…

You still get paid during the eviction process.

To me, that was huge. We collect $1,400 per month for this home and we’ll likely be upping it to $1,500 here soon.

That’s between $4,200 and $5,600 I could have potentially lost during this eviction process. 

If you’ve never done Section 8 before and you’re evaluating it as a potential investment strategy, I think your takeaways are different.

Understand that Section 8 is not bulletproof. Your odds of having a lower quality tenant are drastically increased. 

That means they’ll likely be much harder on your home than a non-Section 8 tenant and it could cost you much more in the long run.

The only way I’ve found to combat this is to hope the tenant stays as long as possible. I’d be over the moon if I can get another 5 years with this current tenant, even if she is a pain in the butt.

Because at this point, the damage she’s done to the home is a sunk cost. I’d rather defer all the turnover costs as long as possible.

Here’s hoping we’re able to stabilize things and I’m still writing about this tenant 5 years from now!