Section 8

[Moe Rehman]

Hi everyone,

Just wanted to start of by saying this site is great and has been a tremendous help and wanted to thank everyone that provides feedback on their investing experiences.. It has allowed me to learn so much more about real estate before making a major investment. So I have been looking at numerous properties for roughly 200-300K where I could afford the down payment and then use it as a rental property in the Northern Virginia area however, I will only be able to purchase one property. On the other hand, I have seen various properties significantly cheaper in baltimore which however appear to be in the worst neighborhoods that none would really want to live in. How hard is it to find tenants to rent to using Section 8. Is the number of vouchers given out for Section 8 properties limited and based on your experiences does it make any sense for me to invest in area where the houses are significantly cheaper as low as 25,000 and use them strictly as section 8 properties. Because this will allow me to make many more investments rather then buying one property every few years since 200-300K is so expensive. 

Thanks and I would appreciate any feedback. 

[David Greene]

I would try not to look at it so much as how many properties you buy.  That part is irrelevant.  In fact, there is an argument to be made that less properties is actually better because there is less work involved in keeping track of them.

The most important questions to ask yourself are 

1. Which strategy will build my equity, and therefore my net worth, the fastest?

2. Which strategy will build my passive income the fastest?

The reality is, you want to buy in areas where you can reasonably expect appreciation. Both in property value and rents.  Buying cheap houses in Baltimore may sound good, but honestly, please listen to this-there is a reason they are cheap.  Low prices equal low demand. Low demand is your enemy in real estate. 

Keep in mind I'm not saying Northern Virginia is better. I have no clue about it at all. What I AM saying is, open your mind to look for areas where you think people are going to want to live in the future, and then start looking at deals there.  Maybe in the end both Baltimore and Northern Virginia aren't the best option.

Now to answer your actual question, finding section 8 tenants is really the same issue as finding tenants anywhere else.  You need to find an area where there is a demand for section 8 tenants.  Asking property managers in area's you are curious about will be the easiest way to find out if there is section 8 demand.

Good luck to you.