Should I get involved with section 8?

[John LaVecchia]

I have limited capital to work with and the idea of buying a property at $25,000 putting about $10,000 into rehabbing the house and renting it for $800 (local section 8 rent estimate) sounds like a great deal. I would hire a property manager experienced in section 8 to guide me through the venture, but I do not want to rely on someone else for the success of my business. Could someone with section 8 experience help me understand how the section 8 program changes the rental process, and if there are any hidden expenses with section 8?

[Jonathan R.]

When reading posts from people discouraging you from going Section 8, make sure and get a feel for whether or not they have ever rented a property through Section 8. I have a Section 8 property, my numbers are very close to your desired target range, the venture has been lucrative and I am having a blast. My tenant only pays $46 and the government pays $629. I didn't see the need to run their credit, I received a deposit of $600, so if the tenant doesn't keep up, I won't renew to him. I do send him a bill every month saying the right things but I don't sweat it much. I did go with a disabled man in his 50s because I think he gave me a good shot at a long term tenant.

I'll be happy to answer any specific questions you have about Section 8. I did not go with a property manager, I just got a list from my local housing authority of what they need done to the property and showed the list to my contractor. You will likely fail your first inspection of two, don't worry about it and be nice to the inspector; I thought of it as a long term play, I want to do many deals with Section 8 so I will likely deal with the inspector many times over. Be calm when dealing with the bureaucratic red tape of the housing authority; make a phone call to figure out the next step when you are going through the process, when you get sent to voicemail, leave a message; when you don't hear a reply a day later, send an email; when you don't get a reply from your email two days later, drive to the Section 8 office and politely figure out what the next steps are. A lot of times you will be past from one person to the next and the last person won't tell you that you are now to be working with a new person.

I get a direct deposit into my bank account every month. I get above market rent.  It's a sweet deal. Just be cool and have fun with it, you'll love it once you do your first deal.