Section 8 Viability?

[Chad M.]

Hello!

I've been lurking for a while on BP trying to learn as much as I can from this great community and thought I'd jump into the conversation with an issue I have been struggling to fully understand!

I'm considering purchasing 2-flats in Chicago's Southside where most of the rents are Section 8. Wanting to understand all potential risks, I see one such risk that the government lower the amount they are willing to cover for rent (or even end the program).

Given the knowledgeable forum members as BP, I'm curious to hear others' experience around the longevity of the Section 8 program--have you experienced any adverse government actions with regard to your Section 8 rentals?

[Lynn McGeein]

Chad, One thing I found disturbing is that the Section 8 people froze rents, no increases, for the last few years. Had I known they were going to do that, I would have raised rents earlier even when not needed. It was frustrating that when my expenses triggered needing a rent increase, they randomly put a freeze in place. Just policy, no consideration of no past increases or that it's the lowest rental in the area. They now are allowing maximum 3% increases per year, but you have to justify it ... any increase must show improvement for the tenant, not just repair expenses or increase in real estate taxes or insurance, even though it's over 7 years now without any increase. My only option is to not renew their lease, forcing out a grandmother taking care of her handicapped grandchild, which is going to feel horrible but that property should rent for much higher, and taxes, insurance, and HOA fees have gone up considerably in the last 7 years. So I don't have any other Section 8's because I don't like how a change in their policies can randomly dictate my business.