Every real estate strategy works.
But no real estate strategy works without the proper numbers.
The math will set you free.
This is what I told a client recently who was asking my thoughts on focusing solely on Section 8 tenants for a building they plan to buy.
I’m a numbers girl.
This might be why I love real estate.
Numbers are black and white.
There is no emotion or doubt tied to numbers.
The numbers either work. Or they don’t.
Simple.
I’m also an end goal girl.
So we not only touched upon numbers, but I also asked about their end goals AND their tolerance for red tape.
If you aren’t familiar, Section 8 is a federally funded housing program that pays up to 70% of a tenant’s rent.
But the tenant and landlord must follow strict requirements for these payments to be approved.
But most people who are concerned about Section 8, my client included, aren’t even aware of all the hoops you have to jump through to get your apartment approved for Section 8.
Section 8 generally gets a bad rap because people assume that tenants receiving financial assistance are “bad tenants” who will destroy your property.
This is precisely what my client was worried about.
But the reality is that any tenant can destroy your building.
And thinking that people getting assistance are going to care less than regular tenants is a bit silly and classist.
I have had tenants on programs (not Section 8), and overall, my experience has been good.
And my overall opinion is that nothing is wrong with specifically targeting Section 8 tenants as your income strategy.
Nothing is wrong with any strategy really, as long as it meets the numbers test and your end goal test.
I personally don’t want the government to have more power over my property than I do.
So, section 8 in a state or city that is tenant friendly is not where I would invest.
There is already tons of red tape built into the section 8 program.
So additional red tape at the city level is not what I would want to deal with.
So, my thoughts after some back and forth with the client were this:
→ First, decide what your end goal is with this property.
→ Decide the situations you do and don’t want to deal with.
→ Then determine your best course of action that gets you what you want.
It may or may not include focusing on Section 8 tenants.
But whether you want to focus on section 8 tenants, single moms, or luxury Airbnbs…
It all comes down to the numbers working for you.
If your numbers aren’t there, nothing else matters.
Your success starts with buying a profitable house.
And that is determined at the time you buy it.
NOT after you have purchased it.
Would you have hesitations about focusing solely on section 8 tenants? DM me and let me know.
