Building a Rental Portfolio

[Joey Fontenot III]

If you were just starting out in real estate at this time and wanted to buy houses for the purpose of buy and rent out for the long term. Would you go with section 8 tenants or open market given that in my market there is a monster demand for single family rentals and they are literally beating down your door. Another question would you manage them yourself or sacrifice 10% of your rent on letting a property management firm take care of the process. Thanks for all the suggestions

[J Scott]

Originally posted by Joey Fontenot III:

...in my market there is a monster demand for single family rentals and they are literally beating down your door.

If they're literally beating down your door, you'll probably want to find a new area to invest in, as that certainly isn't safe or good for your properties... :D

As for Section 8 or not, that's very much a matter of personal preference. There are a few big advantages to Section 8 (guaranteed income, longer tenant stays in many cases), but the obvious down-sides as well.

Generally, you can earn higher returns with Section 8 rentals (lower priced properties in general), but it comes with bigger headaches.

As for self-managing or paying a property manager, that's also a very personal choice. Do you want to be a landlord? Is it worth saving the 10%? For me, the answer is "no" (I'd much rather pay the 10% and not deal with tenants), but there is still overhead dealing with PMs.

All that said, the one thing pretty much all investors agree on is the fact that now is a great time to be buying buy-and-hold property.