My family owns a real estate business of which I am a part of and are looking at transferring some properties to Section 8 based on the location we are in. What are some pros and cons to having a Section 8 rental property?
If you are good at property management and placing tenants. I would say it's a great way to guarantee a long-term stable renter with a partially guaranteed (I've seen up to 80 percent) rental payment. It was very rare if we would not get paid on time due to the low payment requirement on the tenant's end.
If you don't like paperwork or additional restrictions on how you operate then I would give it a second thought.
@Samuel Freeman : pros, in certain areas you will get better tenants than the market rate tenants. The direct deposit of at least a portion of rent is nice. My section 8 tenants stayed a long time.
Cons: annual or biannual reinspections that cost money. paperwork. Delayed first payment. Money order payments that mobile deposit doesn't recognize.
I used to do more Section 8 and have no horror stories. The areas I invested in have gentrified faster than Section 8 rents would keep up with, and the annual (now biannual) inspections became more and more expensive each time, thereby mitigating the benefits of section 8. When I first started, I was getting more rent than the typical renter would pay, given the neighborhoods.
I agree with the other replies you've gotten. I love Section 8 for the guaranteed income, higher rents in certain areas, long tenancies, additional accountability for the tenant through the Housing Authority and supply/demand disparity (very high demand and not enough supply), which helps me attract & retain great tenants.
Cons you will usually hear revolve around typically bad tenants (this can be mitigated through very strong screening including a home visit at their current residence as the last step of the process) and dealing with the bureaucracy of the Housing Authority. Housing Authorities operate differently from one to the next so one can be great and another not.
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