Section 8 Rentals

[Jake Minyen]

I am considering acquiring properties to be rented under the section 8 program. My thought is, buying between 50-90k livable (or less than 10k rehab) and being able to rent for 2% or at least close to it trumps the cashflow of typical market rentals since HUD establishes max payable amounts depending on number of bedrooms, and is usually higher than market rent rates.

My question(s) are, who has experience in this and what are some good markets to consider? I know it needs to be landlord friendly state but does anybody have specific markets that have performed well with section 8? Markets that have great need for affordable housing. What are some caveats of this? Don't bash me with the standard "they will trash your place". The potential tenants will be screened thoroughly just as I would with a standard market tenant. That is always going to be a risk.

Typically, tenants are only required to pay up to 30% of the rent while the gov pays the remainder. My thought is, as long as what the government pays covers the property expenses and provides some cashflow, the tenant portion is just a bonus.

Anybody with experience in this please share your opinion!