Section 8 rentals in Alabama?

[Brian Garlington]

What are the pros and cons of investing in Section 8 rentals in Alabama? Looking at the idea of expanding into this market. I've heard some good things about Tuscaloosa, Mobile, Montgomery and Birmingham. It is my understanding that Birmingham is in Shelby County and Jefferson County. I know having a good property manager that is skilled at placing and working with tenants with a housing choice voucher is crucial as well as obviously working with an investor friendly. 

Has anyone had success in these markets?

[Spencer Sutton]

Hey Brian,

We're here in Birmingham and actually manage a large number of Section 8 properties. The biggest factors in making it a successful investment is going to be the age and design of the house and then understanding your ongoing maintenance costs.

Age matters here in Birmingham and the older the home, the more renovation and ongoing maintenance will be required. Also, I mentioned design simply because if you get an odd house or a house with a White Elephant (a defect you cannot correct such as a very steep driveway, on a busy road, next to railroad tracks, funky layout, etc..), it's going to take you longer to rent the home and you might not keep that resident long term. 

Ongoing maintenance will be higher on most S8 houses because they're lived in more than a home with a working resident that is gone up to 8 hours a day.

Hope that helps - there is a Birmingham based podcast (the Birmingham real estate investor) we put out where you can hear from a lot of local investors on topics like this.

Spencer