So correct me if I am wrong but doesn't an increase in rents decrease the cap rate since the property is more stable with a wider spread between gross income and the operating expenses

Maybe some price appreciation on property would occur and I'd have depreciation to offset rental income and such.

Make sure the rental income comfortably covers your mortgage, taxes, and other expenses.

What do you show for income on your IRS returns?

We aren't necessarily concerned about a monthly profit on our first 10 or so as we are thinking these would be held for at least 10 years.So, a question we have about 2 houses - House # 1-smaller,good area new roof, new window, no basement, no garage, monthly income $140, $6000 left in debt to heloc..........House #2 - larger 4 bed, 2 bath, forclosure, estimated rehab 40k, estimated monthly income zero, zero debt to heloc........ higher value home.  

Your local PHA may also have resources to help match landlords with eligible tenants.The PHA must approve the lease agreement, ensuring it complies with Section 8 rules and rent limits.Pros:Guaranteed Rent Payments (sometimes even 100% based on certain tenant criteria)High demand for Section 8 rentals, which can reduce vacancy periods.Many Section 8 tenants prefer to stay long-term, reducing turnover rates.Cons:Properties must meet and maintain HUD's health and safety standards, which can involve additional maintenance and inspection requirements.The PHA limits how much rent you can charge, which may be lower than the market rate in some areas.Tenants must qualify for Section 8 based on income level and other factors, which may limit the pool of potential renters.Dealing with government agencies can sometimes be time-consuming and bureaucratic.In summary, converting your home into a Section 8 rental can be a good strategy for attracting and maintaining long-term tenants due to the stability and reliability of government-backed rent payments.

I would also recommend asking for reimbursement for lost income and sending documentation that substantiates the actual amount of rents you are out while this matter is being resolved. 

Does he have to report the income he received this past year and declare it a rental event though he would like to move back in eventually?

Assuming I could qualify financially (primary income plus FHA allowed rental income contribution from additional leased units), when I become the owner of the property, would that prevent me from using a FHA 203b to house hack a second property? 

I have good income and minimal debt.