Section 8 Housing, is it still worth it?
Hi All! I am looking to purchase my second investment property and want to buy a multifamily (preferably 4 units). I was interested in making some, if not all of the units section 8 housing. I have heard mixed things about section 8 right now. Some say it is amazing while others say it has been more difficult to get properties approved for section 8 at the moment. Curious to know what section 8 investors think. Is it hard to get properties into section 8 right now? How would I vet which markets are best for this? Thank you for any insight.
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#1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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- Buffalo, NY
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#1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Real Estate Agent
- Buffalo, NY
Section 8 is C/D class investing. That means potentially higher returns, as well as higher risk.
Our data shows C/D class investing can work, but when it goes wrong it goes further wrong than A/B class investing.
Some things to consider: A roof does not change cost based on asset class, so if you purchase a cheap property that needs a lot of CapEx, you can get underwater quick.
Higher Risk = higher chance of property damage. Property damage can cost years and years of cash flow. If someone does 20K in damage, you have an $800 deposit to cover and almost no recourse on collecting for damages.
People fall off of section 8 frequently and become responsible for the rent themselves, that can and often does lead to an eviction.
- Matthew Irish-Jones
