Multifamily vs single family section 8

[Munya Chawa]

Hi all,

I'm a newer investor looking to potentially invest in long term rentals. I was initially hesitant about rentals because of covid when landlords suffered due to non paying tenants they couldnt evict....However, during a networking event, I spoke to someone who is a section 8 investor and the government "guaranteed rent" appeals to me greatly. I know there is a stigma associated with section8 tenants  and destruction of your property etc....but I am still very interested in getting more info about this. I have a scenario/question that I'm hoping this platform can assist me with:

Is it better to get a single family home or a multi family property for section8?

If I were to get 100k 3/2 single home and rent it out on sec8 for 1500, with a mortgage payment of 1000...thus getting me 500 cashflow monthly. Or  .....I get a triplex with each unit a 3/2......Will sec8 still pay 1500 per unit for the triplex thus bringing in 4500/monthly. If the house and the triplex are in the same area, are the 3 bedrooms considered the same when it comes to what the government will pay OR will they pay less for a multi unit 3 bed vs a single family 3 bed?  If all 3 beds are considered equal regardless of the property type, then why arent people buying more multi properties and scale faster this way? In markets like Cleveland, I see you can get both a single family and a multi family for 100k .....is building my portfolio with multi units better for cashflow and scaling purposes? 

[Daylen Fiallo]

Hi Munya, I would get a multi family for Section 8 as you can have more sources of rental income rather than just one. Section 8 is given to the tenants and it depends on what the tenants qualify for. Example: You can rent one unit for $1,500, but if the tenant only qualifies for $1000, then Section 8 will only pay you $1,000 and the tenant has to come out of pocket for the other $500. This is how it works in my city and state. I suggest that you get more info on your local agencies.