Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3w
I am not familiar with there but I will give my thoughts on what I see in KC. Section 8 is you either hate it or love it. It's guaranteed rent, above market rate, in high demand and the more bedrooms have the better. The downside is the tenant pool is rougher than market, you deal with annual inspections from the city (which can be nit picky) and turnovers/evictions is more common. If you have a PM you will use I would make sure they are familiar and able to tackle that. Hopefully people local can chime in, if there are local FB groups or meetups then I would network there too.
Investor · Lexington, SC · Member since 2018 · 779 posts · 501 votes
3w
Jon, I would evaluate the local housing authority as an operating system, not just a source of rent. Verify current payment standards by bedroom count, typical inspection timing, the most common failed items, how abatements are handled, lease-up time, and the property manager's actual experience with the program. Then underwrite the neighborhood and resident screening the same way you would for any rental, while following all applicable fair-housing and program rules. The key question is whether the rent premium, if any, compensates for the extra process and timing risk. Have you spoken with managers who currently operate voucher rentals in your exact Jacksonville submarket?
Lender · Orlando, FL · Member since 2023 · 220 posts · 183 votes
3w
Hey Jon, both responses above make good points. One thing I would add that is specific to Jacksonville is that Jacksonville Housing uses Small Area Fair Market Rents, so the voucher payment standards vary by ZIP code. I would definitely check the payment standard for the specific ZIP and bedroom count before buying rather than assuming Section 8 rent will be the same throughout Jacksonville.
From an investment standpoint, I would look closely at 32208, 32209, 32254 and 32206. Those areas tend to have lower acquisition costs and a lot of rental/investor activity, which can make the numbers work better for a voucher strategy. There are also pockets of the Westside, including 32210, that can make sense depending on your basis.
The biggest thing with Jacksonville is that I wouldn't buy based on ZIP code alone. It can change pretty significantly within a few blocks. I'd underwrite the exact property based on purchase price, current Jacksonville Housing payment standard, taxes, insurance, expected repairs and the specific street.
Also, don't assume "guaranteed rent" means guaranteed performance. Jacksonville Housing still performs an inspection and rent-reasonableness determination before the HAP contract and payments begin, and the owner is still responsible for screening the tenant. If you're buying specifically for Section 8, having a property manager who already deals with Jacksonville Housing can make a big difference.
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
3d
Super poor tenant base. Very difficult to deal with. This keeps housing prices low though. You'll make money if you can handle the savageness of these folks. Personally I love the Section 8 space. I've made millions renting houses to savages, but it by no means is a business for the squeamish. It will be war every single day.