1st Single Family Investment Property-Section 8 or No Section 8?

Question

Hello,

I acquired my 1st single family investment property late last year. If you see my previous post. I acquired it for $1 and I was having a hard time finding funding to fix it up. Well I got over that hump and it is less than a month away from being finished. The house is not in the best neighborhood but it is definitely not in the worse neighborhood. The idea of getting it Section 8 approved was brought to my attention. I hear good and bad about Section 8. What do you guys think? Just FYI I live in Dallas, TX and the SFH is in Tulsa, OK (4 hrs away). Give me your Pros and Cons Please.

Thanks!

Michael Bennett · Answer

Hello @Janikka K. White. I currently have a renting property in North Tulsa with a section 8 tenant. I’ve been owning the property for about 6 months now and so far so good. If possible I would highly recommend section 8. There’s nothing like guaranteed funds every month.

Thomas S. · Answer

It will depend entirely on the class of property and the amount of hands on management you are intending to do. Managing S8 tenants can be very demanding. If it is a true C/D class property S8 is a option knowing there will be issues with both tenants and inspections. Big problem is often in collecting the tenant paid portion. If it is a C+ or approaching B class finding better quality tenants may be easier than falling back on S8. If you are looking to upgrade the quality of the property or the location is in transition S8 is the wrong direction.

It comes down to your assessment of the quality of the property now and in the future.

Scott England · Answer

@Janikka K. White

Section 8 is a great option when you’ve got C class rentals.  I have multiple section 8 tenants at any given time and prefer it that way.  The inspections can be pretty frustrating, but guaranteed rent for that asset class is valuable.