Im looking at a 4 plex in new orleans, 200K purchase price, current rents are 800 per unit, section 8 potential at 1K per unit....obviously this is lower income...not sure if its worth investing in, the numbers are good but i just cant get past the neighborhood, its not the worst of the worst but i would definatley hire a management company...anyone have good or bad experience with lower income section 8?
$1K a month per unit and that's considered lower income? Must be a different market in New Orleans.
2 br 2 bath, brand new has potential for to go 1K for section 8, 3 units are currently rented at $800 per month, i may or may not turn the 4th into section 8, not sure if its worth it.
Hi, You will find that in areas such as you described, where there may be issues at lower socioeconomic levels, there may be unique, yet common, concerns that property owners will be faced with. Consider the timelyness of payments under Section 8 and the fact that you have greater control over the conduct and contract compliance with tenants under Section 8 as opposed to those that are not subject to any requirements or oversight. Section 8 tenants have alot to lose if they do not tow the line. IMO management issues will be easier and more consistant under Section 8 than not. I'd suggest you consider the benefits of putting all of your units under Section 8 while you are not actively involved in management. IMO, Bill
I've found not all section *'s are created equal. Some states don't require any deposit . Some don't have any damage clauses. I think I would take a very cautious approach to renting section 8. Unfortunately, I've found that they aren't the greatest tenants. I'd worry about turning a brand new building over to section 8 tenants. You might not come out ahead down the road. Rich
I have a Section 8 tenant in my single family property. I screened her the way I did every other tenant. She keeps the house in great condition and her rent shows up like clockwork. She does have a belligerent attitude at times and we've butted heads; she is what you'd call a "professional" tenant.
But overall, she takes good care of my house and I get paid every month without worry. Screen your S8 tenants like any other and you should be fine. Section 8 tenants or not, landlording is not always smooth sailing.
current rents are 800 per unit, section 8 potential at 1K per unit
I'd be careful. They don't just automatically pay the max. You'll be asked to justify any rent you ask and provide at least a stipulation that you're charging your "normal" rate. If the others are at $800..... :roll:
95% of my properties are section 8. In my area Cleveland,ohio I feel it is the way to go. You get good tenants and bad tenants either way. If you have a bad tenant at least your rent in there every month and you can choose not to renew the lease after one year. Like the previous poster said, Sec8 tenants have more to lose than straght rent payers, if they don't pay their bills as agreed in the contract or trash the place they can be proposed for termination. That means no more free ride.
The great thing about Section 8 is that you most likely will maximize your return for that property.
I started out with Section 8, had dozens of Section 8 tenants and they fell into the following categories...
10% I almost never hear from...
80% show up on my radar screen every now and then... and
10% seem to always be the problem tenants. Regardless of how well they are screened.
One thing to seriously think about is putting mostly Section 8 tenants in a multi-unit. Doing so could put you at risk of creating your own 'project" and things can get out of hand very quickly.
Perhaps a better approach would be to contact various agencies such as the Homeless (housing is healthcare is huge across the country), or agencies that have programs to help those with disabilities, etc. as almost all of these tenants come with counselors and the rents are usually higher then Section 8.
Best of luck!
Id say section 8 is totally worth the BS you put up with at first to get in, its GUARANTEED rent for one year, I dont care how well you screen and how good of a job and much money your tenant makes, things always go wrong, the best tenants ive screened are the ones who went sour, with section 8 i know for the next year I will have rent at the beginning of each month. As stated above section 8 will question the rent and can require you to prove your rate is around the same as like units, with this being a 4 unit your obviously going to have similar units. Section 8 tenants do not want to get kicked off section 8 and are generally pretty good tenants. Everythings local, I'd suggest trying to find more info about your specific section 8 office, some are good some suck. $200k is alot of money for 4 section 8 units IMO
I think you should talk local investors in your area that have dealt with Section 8 locally. Some offices/departments are easy to deal with, others are a nightmare of bureaucracy. Some areas have a large waiting list of applicants and are currently giving out vouchers, and some areas/departments have eaten through their surplus right into a huge budget deficit (my area) and are no longer giving out vouchers. That means it's very tough to find section 8 tenants because the only people with vouchers are already living somewhere.
So do your research locally. Overall, it is definitely good to get a guranteed check every month AND in certain areas, you will get more from Section 8 for a particular unit than you would from regular tenants in that area.
Quick note: rent is NOT guaranteed. If the tenant doesn't feel like paying their share, all they have to do is break something and complain to the HA. The HA stops your rent (all of it) until the repairs are done.
Also, the high figure for the rent is for units where all the utilities are included.
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