Section 8 in a Class A area

7 Replies

I’m curious to know if anyone has attempted, or even looked into, accepting vouchers in a Class A neighborhood. I am in the process of buying an SFR in what I would consider to be one of the best 2 or 3 areas in town - it’s an incorporated city with its own Blue Ribbon school system and this particular area has primo shopping and dining and is walkable to the schools. I jokingly was talking to a buddy about advertising as a section 8 rental (note - I co-own several Class C properties that currently have S8 tenants so I’m in no way disparaging), but it got me wondering. For context, I am in the Birmingham AL market. Rent for this house I’m buying will be in the $2800-3000/mo range, but there are some comparable rentals in the neighborhood that go for $3400-3500. Curious at reading the responses to this - ha! Many thanks in advance.

I'm sure you could do it if you're feeling really generous. I believe a 3 bedroom voucher won't pay more than $900+/- a month, 4 bedroom $1100+/- a month.

I agree with Mark. The most current pay standards for Birmingham are located on the website for the Housing Authority.  Link to the form >> Payment Standard

thanks @Mark Byers - I hadn’t considered the max rent amounts, sounds like it couldn’t get anywhere close to market for this type of area. Carry on!

Property owners in a class A community would likely not you want welfare recipients renting the house  next door. Most would probably not want to see rental properties in their community let alone welfare tenants.

Home owners that work hard and sacrifice to achieve a high quality living standard are funny that way sometimes. 

This is called affordable housing or variant of... and it's used by developers mostly to either get approval for things or tax breaks.

@Tal Simpson I have to agree with other posters here. You'd be giving up CONSIDERABLE cash flow and, honestly, with multiple housing authorities in Bham, the red tape, delays, inspections, etc. just wouldn't be worth it even if they would pay market rents. I'd say with demand for the OTM zip codes (I'm guessing you're referring to Homewood, by your description?) and the relative lack of rentals, you'll have no trouble getting market rents or higher going to regular route.

Best of luck!

Originally posted by @Clayton Mobley :

@Tal Simpson I have to agree with other posters here. You'd be giving up CONSIDERABLE cash flow and, honestly, with multiple housing authorities in Bham, the red tape, delays, inspections, etc. just wouldn't be worth it even if they would pay market rents. I'd say with demand for the OTM zip codes (I'm guessing you're referring to Homewood, by your description?) and the relative lack of rentals, you'll have no trouble getting market rents or higher going to regular route.

Best of luck!

 Thanks Clayton (and others).  The key part that I was unaware of are the overall rent caps, which obviously are well, well, well below market rents for the area (it's actually in Mtn Brook, but same applies for Homewood).  Like I said, the question stemmed from a conversation in jest I had with another investor, but it got me thinking and I got pretty much zero Google results for "Section 8 in class A areas" (shocker).  We ended up closing on the house this week, by the way.  If you know anyone looking for a rental house in Crestline Village let me know :)

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