I'm looking at investing alongside some family members in a rather large deal in PA. The property is 100+ units and 70% of the property is designated as section 8 housing. The property currently has an in-house management team of 3 full-time people that have agreed to stay on for the new owner.
Does anyone have any experience investing in section 8 housing that can shed some light on how these properties perform? If anyone had any of these properties during the 2008 recession, did tenants continue paying rent?
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
7y
@Alex Rosen, the good thing about section 8, is you can count on the government putting that guaranteed rent payment in your account every month without fail. The knock is, usually the quality of tenants you have to take on. I'm not saying that all section 8 tenants aren't quality prospects, but statistics say otherwise. Is it worth the extra $200 bucks a month to take on non-desirable tenants? What you also have to think about that can potentially diminish the extra $200 is the maintenance cost usually go through the roof, because statistics say they don't take care of the property. Where is the property located? Is it in the path of progress? Is it gentrifying? Is the neighborhood a war zone? Just some things for you to think about
Real Estate Lender · Jacksonville, FL · Member since 2015 · 86 posts · 51 votes
7y
Is the 70% property based or tenant based vouchers? One of my clients does quite well with the property based vouchers as the money stays with property vs the tenant. His history was good in the downturn.
Real Estate Agent · Naples, FL · Member since 2016 · 298 posts · 268 votes
7y
I prefer section 8 tenants in my properties. You know your rent will be there. There is check and connect as far as the yearly inspections and accountability vs other welfare subsidies
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
7y
@Alex Rosen, the good thing about section 8, is you can count on the government putting that guaranteed rent payment in your account every month without fail. The knock is, usually the quality of tenants you have to take on. I'm not saying that all section 8 tenants aren't quality prospects, but statistics say otherwise. Is it worth the extra $200 bucks a month to take on non-desirable tenants? What you also have to think about that can potentially diminish the extra $200 is the maintenance cost usually go through the roof, because statistics say they don't take care of the property. Where is the property located? Is it in the path of progress? Is it gentrifying? Is the neighborhood a war zone? Just some things for you to think about