Buying around Section 8/ HFH homes a bad move?

Question

Hello! I'm currently looking to purchase a new construction townhome. To keep it short, there are homes that are right across from the units that looked a bit odd. I did some research (after the fact) and found out that they are habitat for humanity homes and there are some more sec 8 homes up the street. Im thinking about pulling the plug but I wanted to get some insight since I already put down some earnest money and I have to stay around a certain price point. Thanks!

Jessica Morrison · Answer

Hello and thank you for the reply! They are proposing some sort of transit about a block down. But I can see your point about the builder taking into account the area as it currently is.

Luka Milicevic · Answer

I read through your thread.

I would equate this to the efficient market hypothesis. The value of your townhome being next to section 8 housing is already priced in.

Same way it would be if it had a train the backyard, busy highway, etc.

It would be a different story if you were buying something that had a proposed development, train tracks, road, etc.

Where else can you find a new townhome for 255k that close to Nashville? That price point has a lot of limitations.

Jessica Morrison · Answer

Those are good questions to think through and It's worth a shot! Thank you again for your reply and help!

Nicholas L. · Answer

@Jessica Morrison

all good, thanks for the additional info.

some questions to think through - what are the numbers while you're living there, vs. if / when you move out?  what are other rentals renting for?  what's rental demand like?

can you try to find some local meetups - there are probably lots in Nashville - and see what they think?  will be tough to do this before closing i assume but i would try

Jessica Morrison · Answer

Apologies, I'm new to this.

This will be my first home and I will be doing house hacking for a year or two with hopes of renting it out thereafter.

The townhome is a new construction located in Middle Tennessee, about 40 min from Nashville and is located not too far from the town center. Its a 3 bed 2 1/2 bath.

It is around 255k and I am using the state's first time homebuyer loan that provides 6k towards the down-payment. My cash to close is super low due to the incentives the builder has provided

My agent thinks that as long as the area is kept up it should be fine

Nicholas L. · Answer

@Jessica Morrison

would need way more info... you haven't provided geographic location / area, numbers, strategy, financing info...

what does your agent think?

Jessica Morrison · Answer

Hello! My question is, should I move forward with the purchase given the proximity of the section 8 and habitat for humanity owned homes? Would I be losing money and will there be headaches down the road with finding roommates and selling? And yes, I am currently under contract.

Nicholas L. · Answer

@Jessica Morrison

what's your specific question?  are you saying you're already under contract?