Multi-Family w/ first floor Section 8

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Hello all - I just looked at a multi-family tri-plex. The realtor just informed me that the first floor (only) is Section 8. I know NOTHING about Section 8 housing, other than the fact that it can get a little rough:). Could anyone offer any info on whether they would look into this further, or run for the hills?

Thx!
Shelby

[Joel Owens]

I have rented to section 8.

What I know from experience. Pay special attention to the voucher amount versus the rent you are charging in the lease. If there is a big spread I find section 8 people never come up with it. Example if the lease says 800 rent and voucher amount is only for 600 there is no way I rent to them because they will not have the 200 every month. If the difference is 50 bucks that is one thing. Also their cases and voucher amounts getting paid out can change over time and then cause issues with making the payment if their voucher amount gets reduced.

Sure you could possibly get them out and re-rent at higher rates but if they have been there 7 years you will have serious turn over costs with the unit when they leave (sometimes in the thousands. Even if you made 100 more a month in rent it might take 1 1/2 to 2 year to get that back in turnover costs. You always have to weight these things very carefully.

Pay attention to the unit mix. Section 8 might have a directive for the area coming down the line where rents on 1 unit apartments vouchers are going down but 2 units are going up. I have seen areas where section 8 rents are above market and then some were way below market.

Many more things to look at but hope this helps. You set up the difference with the voucher versus rent amount with tenant utility payments.