The Pros And Cons To Investing In Section 8 Rental Property


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Real estate investors often consider the advantages of investing in section 8 rental property.  However, they should also realize that it comes with a long list of drawbacks.  Those investors who understand the pros and cons to section 8 rental property can decide for themselves whether it is worth investing in.  In general, most investors ultimately choose not to invest in section 8 rental property, as the problems associated with it tend to make it unattractive.

Some pros of investing in section 8 rental property include, guaranteed rental payments and a large number of potential tenants.  Since section 8 rental property is a program mediated through the government, rental payments are directly deposited into an investor’s bank account on a monthly basis.  Investors don’t have to go knocking door-to-door in order to collect the rental payment and can simply focus on management issues.  In addition, there are plenty of individuals with section 8 vouchers looking to take advantage of residency at these properties.

With these two pros to investing in section 8 rental property stated, now let’s look at the cons to such an investment.  First of all, investors who own section 8 rental properties are ultimately working with the government.  With that said, expect large amounts of paperwork, government inspections, and all sorts of bureaucracy.  In addition, section 8 rental property offers investors with about 70 to 80% of the typical rental rates in their area.  Again, this rental rate is guaranteed, although, in many cases, it is delayed.

There have been a number of horror stories from investors who have invested in section 8 rental property.  In some cases, rental payments have been delayed months, forcing an investor to somehow scrap together the monthly mortgage payment and pay expenses.  In addition, real estate investors who were almost through the approval process for section 8 rental property have been denied, as they were unable to meet the necessary inspection standards.  Since applying for section 8 rental property and dealing with the investment itself is a hassle, investors should consider other options first.

Some other cons to investing in section 8 rental property are based around tenant quality.  In many cases, tenants at a section 8 rental property will damage the unit and end up costing an investor dearly.  In addition, evicting section 8 tenants is a difficult task, as they are protected by certain regulations.  Those who have no other choice but to evict these tenants have to realize that they will be automatically appointed an attorney and therefore, cost an investor a great deal in legal fees.

Real estate investors who are considering investing in section 8 rental property should analyze the pros and cons before hastily entering this niche of the industry.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

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