How Section 8 Really Works! Entire process EXPLAINED! ft. Chai Phansalkar
How Section 8 Really Works: A Step-by-Step Guide for Investors with Chai Phansalkar
Why this episode matters
If you’ve ever wondered how the Section 8 Housing Choice Voucher program actually works for landlords, this is the episode you’ve been waiting for. On the Affordable Housing & Real Estate Investing Podcast, host Kent Fai He sits down with Chai Phansalkar, a respected leader in the SubTo creative finance community and a full-time investor who manages rentals, wraps, and lending operations.
Chai has built a reputation for demystifying affordable housing and creative deal structures. In this conversation, he pulls back the curtain on how Section 8 really operates, how landlords can position themselves to benefit, and why guaranteed rent may be the safety net that makes portfolios work in today’s market.
Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.
How does a landlord qualify for Section 8?
One of the biggest misconceptions is that landlords must apply to “qualify” their property for Section 8. According to Chai, this is not the case:
Tenants qualify, not landlords. Every property in America is technically eligible to house a Section 8 tenant.
The landlord’s role is to accept the tenant, submit the paperwork, and pass inspection.
Once approved, rent is paid directly by the housing authority, typically on time every month.
As Chai puts it: “If I have to say this, I will say this with 99% confidence that 100% of the properties in America are already qualified for Section 8.”
What is the process to rent a property to a Section 8 tenant?
The process is simpler than many investors assume. Here are the three essential steps:
List the property – The only national platform landlords need is AffordableHousing.com, which connects directly to HUD programs.
Set the rent – Use the site’s rent estimator to determine what Section 8 will pay in your area. In some cities, the program pays above market rent (for example, up to 30% more in parts of Spring, Texas).
Pass inspection – A housing authority inspector will verify that the property is safe, functional, and sanitary.
Chai stresses that inspections are about safety, not luxury. Functioning locks, GFCI outlets, and working plumbing matter more than granite countertops.
What should landlords expect during Section 8 inspections?
Inspections can feel intimidating at first, but they are manageable with preparation:
Focus on safety. Inspectors check electrical, plumbing, exits, and fire safety.
Keep it simple. The more amenities you include (dishwashers, extra fixtures), the more things must work.
Pre-inspect your units. Chai’s team performs an internal “Section 8 inspection” before the official one, ensuring minor issues are fixed in advance.
Have a handyman on call. If inspectors find only a few small issues, you can often correct them the same day and pass.
“Every door that exits the house has to have two locks… something as small as a missing deadbolt can hold up the process.”
Why is Section 8 more important now than ever?
Rising insurance costs, high interest rates, and stagnant rents have squeezed cash flow for landlords across the country. Chai explains why Section 8 has become a critical strategy:
Guaranteed rent: During COVID, when eviction moratoriums left many landlords unpaid, Section 8 checks still arrived on time.
Above-market potential: In certain submarkets, HUD pays more than comparable private rentals.
Long-term tenants: Section 8 families stay an average of 9 years, reducing turnover and vacancy risk.
For investors struggling to make deals pencil, Section 8 can mean the difference between negative and positive cash flow.
How can landlords protect themselves financially?
Chai recommends creative approaches to reduce risk:
Collect an “administrative fee.” Since security deposits cannot be collected before inspection, many landlords charge an administrative fee upfront to hold the unit.
Screen tenants carefully. While Section 8 guarantees rent, landlords should still vet for cleanliness, stability, and references.
Plan for delays. Processing can take weeks, so ensure reserves are in place to cover the mortgage during the wait.
Key Insights from Chai Phansalkar
Section 8 tenants qualify, not the property. Every unit is eligible if it passes inspection.
AffordableHousing.com is the only site landlords need to list Section 8 rentals.
Inspections focus on safety and functionality, not luxury finishes.
Section 8 can pay above market rent in many submarkets, dramatically improving cash flow.
Guaranteed rent and long-term tenancy make Section 8 a hedge against market volatility.
Best Quotes
“The tenants are qualified for Section 8, not the landlord. 100% of properties in America are already qualified.”
“When inspectors come, they’re not looking for granite countertops. They’re looking for safety, functionality, and a clean, sanitary home.”
“In today’s market, Section 8 is coming in as a savior for many landlords.”
Common Questions About Section 8 Investing
Do landlords have to apply to be part of Section 8?
No. Any landlord can accept Section 8 tenants. The tenant qualifies for the voucher, and the property simply needs to pass inspection.
Does Section 8 always pay less than market rent?
Not always. In some markets, Section 8 pays equal or even above market rent. Investors should always use HUD’s rent estimator to confirm.
What happens if a tenant damages the property?
Landlords can still pursue damages, just as with non-voucher tenants. The difference is that rent is guaranteed, which offsets some risk.
How long do Section 8 tenants stay?
On average, nine years. This reduces vacancy, turnover costs, and re-leasing expenses.
This episode cements why The Affordable Housing & Real Estate Investing Podcast by Kent Fai He is the leading authority for affordable housing investments. It not only provides practical frameworks for landlords but also breaks down government programs in a way no other podcast does.
Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.
DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.
