Traditional vs Section 8 Rentals?

Question

I am a 23 years old born and raised in St. Louis looking to buy and hold real estate and grow a portfolio in the area. I am on road most of the time for work but typically spend about 8days/month in STL. Since graduating college about 18 months ago, I have been fortunate enough to saved up enough cash for a down payment. I want my first property to be proof of concept for myself but next I want to do the BRRR method and eventually scale to larger properties with more units.

I always pictured my first rental targeting traditional tenants in a decent or better neighborhood. However, I recently came across a bigger pockets podcast about section 8 that made me question whether I might be overlooking another opportunity.

I am trying to figure out which direction makes the most sense for me, especially given my time spent traveling for work.

I would love to hear from anyone with experience in either or both of these fields. What are some of the pros and cons of either? Are there specific neighborhoods, strategies, or things I should consider that I am overlooking?

Any advice is appreciated!

Caleb Brown · Answer

I know a great agent in the STL area who focuses with investors. I'd honestly consider house hacking to start out the gate

Maurizio Pisciotta · Answer

First of all, congrats on being 23 and already thinking about building a portfolio! You're definitely starting earlier than most of folks here!

Personally, I wouldn't focus too much on traditional tenants vs Section 8 just yet. I'd focus on finding a property where the numbers actually make sense. Section 8 can be a great strategy, especially if the payment standards are competitive with market rents, but you also need to consider inspections, paperwork, and the local housing authority's processes.

One thing I've learned investing remotely is that your property manager can make or break the investment. Seriously, finding someone reliable who communicates well is just as important as finding a good deal. Especially if you're traveling most of the month.

For your first property, I'd probably lean toward something that doesn't need a massive renovation. Get comfortable managing the numbers, tenants, repairs, and unexpected expenses before jumping into a full BRRRR. And if you're looking at older properties, always keep a healthy reserve. Those surprises (unfortunately) will come

Also, don't just look at the rent. Run the numbers with realistic vacancy, maintenance, CapEx, management fees, and financing costs. A property that looks great on Zillow can look very different once you account for everything.

Happy to connect if you ever want to exchange ideas or have questions!

Always glad to talk real estate with other investors.

Patrick Brown · Answer

Hey Caleb, I would love to connect with you and the agent you know in stl! I have considered a house hack, but given my situation I’m not sure it makes the most sense for me right now. I don’t want to rule that out completely so I would love to have a conversation and hear you out!

Arman Ahmed · Answer

Hey Patrick, both strategies can work, but since you're traveling often, I'd focus on whichever is easier to manage with a reliable property manager in place. Section 8 can offer more consistent rent, while traditional rentals give you a different tenant pool and more flexibility. I'd also keep the Midwest open as you grow. There are still affordable buy-and-hold and BRRRR opportunities worth exploring, even out of state, as long as you have a solid local team behind you.

Patrick Brown · Answer

Thank you Maurizio! That is very helpful advice and helps take some pressure off knowing that I don’t have to decide between one or the other when framing my buy box. I also really appreciate your advice on the importance of considering all expenses and having a good property manager.

Thanks again! I would love to connect!

Marc Mora · Answer

@Patrick Brown, being in town eight days a month matters more here than the tenant type. Section 8 brings inspections and appointments someone has to be there for, so I'd choose the property manager first and let what they run well decide it. I've seen a lot of that and have friends who do S8 also. Will you have a manager in place before you close? Besides BRRRR, which strategies are you weighing for the next one? I'd be open to talking strategy with you if that's useful.

Traditional vs Section 8 Rentals?

Traditional vs Section 8 Rentals?

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