Anybody have city recommendations for high cash flow for section 8?

Question

Hi all, I am looking for any advice or your experiences for section 8 investing out of state around the 100k mark per house. Anybody have any advice or cities they recommend? I have been considering Jackson, Mississippi.

Samuel Diouf · Answer

There are some great opportunities in the Ohio markets. Many investors from California are choosing to invest in the Midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus because of the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Remington Lyman · Answer

I have some section 8 rentals in Columbus, Ohio. You can get the 1% rule if you buy in C class locations and put section 8 tenants in them

Bhargav Hirapara · Answer

Oakland, CA

Oakland offers the highest Section 8 rents, with $2,729 for 2-bedroom, $3,607 for 3-bedroom, and $4,294 for 4-bedroom units. This makes it an attractive option for high rental income from Section 8 investments.

Cleveland, OH

Cleveland is highlighted for its low property prices ($70,000-$80,000) combined with high potential Section 8 rents ($1,100-$1,400 per month), enabling strong cash flow.1 It has over 20,000 households on the Section 8 waitlist.

Detroit, MI

Detroit offers very affordable property prices ($65,000-$80,000) that can rent for $1,200-$1,300 per month on Section 8, providing excellent cash flow potential.1 Around 30% of families in Detroit qualify for Section 8 housing.1

Memphis, TN

Memphis combines affordable housing prices with stable cash flow from Section 8 rentals, making it suitable for uncertain economic times and indicating resilient demand.

St. Louis, MO

St. Louis presents affordable real estate along with high rental income potential from Section 8 voucher holders, making it a market worth considering for cash flow from Section 8 investments.

David Holland · Answer

Baltimore is a great area for this, although sub 100k homes are getting fewer and fewer. The city can be a pain to deal with but the returns are pretty good.

Travis Biziorek · Answer

Hi Hayk, I'm also in California but invest exclusively in Detroit.

I have 12-doors there, 3 of which are rented to S8 tenants. It's a great market as long as you know what you're doing. And Detroit has been getting a lot of positive, well earned attention lately.

Happy to share some resources with you.

Samantha Fedor · Answer

I will second the idea of finding a good prop around $100k, for section 8 or in general, can be challenging, at least here in Cincinnati. They can be found, but in our experience, they just come with more headache in the short term, leaving you wishing you saved a little more to get the $150-$200k property. However, if you are wanting to get in low, and fix it up, then that is another story. It's all about your long term/short term goals.

Drew Sygit · Answer

@Hayk Sarkisyan we 2nd Detroit, but it's important to understand S8 tenants so your expectations are properly met.

We manage almost 700 doors, almost 100 which are S8, so we're VERY familar with S8.

DM us if you have questions.

Travis Biziorek · Answer

Of course, DM's always open.

James Wachob · Answer

Memphis has a large number of affordable housing units and many landlords participate in the Section 8 program, making it easier for voucher holders to find suitable housing. I'd like to be your contact for anything REI related in Memphis, TN.

Jim Oberst · Answer

The greatest cashflow of section 8 and low income housing (or programs impacting low income and disabled people) isn't just in the rent but to capture the larger income of the programs, contract incentives, tax incentives, and fundding incentives associated with the economic growth and services that the tenant will need to be productive in our society.

My firm funds what we call the PATH.. and property owners that rent out to low income individuals are missing out on a vastly more benefitial world.. would love to chat.

Anybody have city recommendations for high cash flow for section 8?

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