Section 8 - Pros & Cons

[Allen Moore]

I am thinking that providing section 8 housing may be a more affordable and recession proof way to get started in real estate for rental income. There is more inventory for single family homes than multi and I've done research on the allowable rent payments based on bedrooms. My local counties provide assistance to battered women, elderly, disabled and low income; its a great way to give back to the community and there's always a waiting list. You are subjected to regular section 8 inspections, but as a good landlord you'd want to keep your properties up to standard anyway. I'm still leery of investing in high crime areas, but there are decent blocks and streets. 

Does anyone have experience on section 8? What are your experiences and thoughts on this investment strategy?

[Jennifer Donley]

@Allen Moore -Hi - I'm surprised no one has responded.  People usually have very strong opinions about Section 8.

I only take Section 8 and have a portfolio of 27 doors.  I obviously really love the program.  I love it for the guaranteed rent, tenant stability, additional accountability with the housing authority and large demand for Section 8 housing without enough supply.

With strong screening, I'm able to find great tenants and Im not owed any rent.

Cons you will often hear is that the tenants are harder on your properties (doesnt have to be the case in my experience if you screen really well), the Housing Authority is a pain to deal with (this depends on a couple things - how well run your local PHA is and how good you are at handling process & details) and the extra inspections/red tape make the niche unprofitable (see what I said above about Housing Authorities).

Done right, I believe Section 8 is one of the most stable & profitable.  I especially think this is true if you're in C areas (and maybe D areas but I'm not in the those areas). But it's not for everyone.  

If you're thinking of going that route, there is a learning curve.  I answer a lot of uestions here on BP about Section 8 so check out my Forum responses if you want.  I suspect there will be a lot of answeres to questions you didn't know to ask yet!

Good luck.