First Rental Purchase

9 Replies | Chicago, Illinois

I am looking to purchase my first 2-4 unit building as an investment based on research, my assumption is there will be holders of Section 8 certificates interested in the areas I am looking to purchase property. Are there any Investors who rent to this segment, I am not sure how you advertise a property for rent is it by market rate or by the rate (which I understand is roughly 110% of MR) you expect to receive through Section 8, if anyone can talk me through this, it would be greatly appreciated.

@Adrienne Wonzer

Find out what Market rate is....then add about 5 to 10 percent to that.   Go onto GoSection8.com in your area and advertise the unit for rent.....they will call you very quickly.......screen the tenants carefully...you want to advertise a little above market rate because Section8 may or may not give you market rate but it's best to start a little high and have them tell you that they will pay you a little lower amount than to start low and have them go even lower on you.....I have section 8 rentals in Ohio and California.

If you haven't already done, you might want to check out this site to see what Section 8 consider and will pay as fair market rate.

https://www.huduser.gov/portal/datasets/fmr/fmrs/F...

Also, you want to find out who your local housing authority is (cha.org) if the property is located in Chicago. Go to their website, there is usually all the information you need to become a Section 8 landlord.

Hope this help

Originally posted by @Adrienne Wonzer :

Thanks Garrett, I have been on the HUD site and found CHA a little disorganized but will try again. I appreciate everyone's input.

 It is very disorganized.  Still trying to figure it out.  If you crack the code please share.

CHA is VERY strict on properties, especially if it's an older property and there are children. Be prepared for inspections and long failure lists (chipped paint, torn screen, missing light globes). They even site you for the tenants lack of cleanliness and tenant damage. CHA is not very landlord friendly at all. Depending on the area, think twice about doing section 8 under CHA.

Don't believe the rents you see on the HUD website. In my market we never get those rents. We tend to be about $300 under that, which still gives us a very strong rent in a low end neighborhood. I choose SEC 8 vs non-SEC 8 depending on the neighborhood. In a neighborhood where all my applicants have low paying, undependable jobs I would much prefer to have a SEC 8 tenant. I wrote a blog on the subject if you are interested. https://www.biggerpockets.com/blogs/9232/55313-intro-to-section-8---your-perceptions-vs-my-realities