Thinking about adding some low income rentals

[Tim S.]

Been thinking heavy about adding a few low income properties (Houses that I can buy for $10,000 or less and buy cash).

If I decide to go this route I'll rent them to Section 8 tenants and make minimum repairs (paint and new carpet only).  In Augusta, Georgia, a 3 bedroom 1 bathroom is $675 per month guaranteed from Section 8.

Any tips from investors with low income properties would be appreciated.

Thanks!

[Shaine Cobb]

Good morning, Tim!

I will comment not from my own experience (all of my rentals are in North Augusta, SC), but from the experiences of people I have worked with. 

The Section 8 program inspectors in Augusta run a pretty tight ship. There have been several cases where items disqualified properties from being eligible for the Section 8 program. And I'm not speaking about lower class properties in war zones. These were decent, well maintained properties that you would be comfortable visiting at night.

In my experience, the $10k properties that you mentioned are not going to be able to pass an inspection making them eligible for Section 8 without a substantial rehab. Much more involved than just paint and carpet.

Not trying to rain on your parade or discount your strategy, just trying to give you a little insight from a different point of view. I hope it helps.

Best of luck to you.