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[Marqus Freeman]

A partner and I discussed shifting our attention to large section-8 rental communities for the consistent income - anyone familiar with the space & barriers to entry? Thoughts?

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[Evan Polaski]

@Marqus Freeman I only have experience with Section 8 rentals with single family rentals.  While it can be good in a down economy, at least in my dealings with Cincinnati MHA there are downsides.  There are costly annual reinspections that the LL has to take on.  Additionally, you are dealing with tenants quite frequently who prioritize other things above rent. 

One of the biggest wake up calls I had was with my first property and first tenant, walking into the house after she moved in to look at a couple small repairs that I missed in my rehab when I bought.  She had 4 TVs in the house, 3 gaming stations, new bikes for each of her kids, etc.  I was driving a 95 honda civic with one small tv in my house, no gaming stations, no luxuries.  Granted, I owned 2 houses and she was renting, and overwhelmingly she was a good tenant.  But her priorities were not always making sure rent was received on the first of each month.  

Also, while section 8 in Cincinnati supposed to be paying market rents, they don't anymore.  Granted, I did believe I was getting better rents with section 8 than I could in the market back in 2011 when I was buying these houses, and the above market rent more than made up for the annual repairs needed at reinspection.  But over time, the repair list was getting more and more expensive, and market rents were growing faster, and soon above section 8 rents.