3 Things to Look for When Buying Property for Section 8 Tenants

When I’m looking at properties for my Section 8 rental property portfolio, I’m looking for many of the same features and amenities that any landlord would look for – low maintenance, small yard, good area,

That is not what I’m going to be talking about here.

Instead, I want to share with you a few things I’ve learned about buying properties specific to the Section 8 niche.

  1. Because of the way that HUD sets the “fair market rent,” if you’re in a larger metro area, you may not be able to get rents in “A” areas that are competitive with market rents.  Research your local market to determine how rents are set to find out if this is the case where you buy.
  1. For me, 3 and 4 bedroom houses work the best.  This is because the rents are high enough to allow for enough cash flow for all expenses, reserves and still have enough left over to put in my pocket.  
    • In addition, 4 bedroom houses are in extremely high demand for Section 8 voucher holders because there are very few of them available.  So these houses rent very quickly.
  1. Speaking of bedrooms…
    • What your local county or municipality calls a bedroom may or may not count as a bedroom to HUD.
      • For instance, in my market, the county will not count a room with an exterior door as a bedroom.  HUD/Section 8 will as long as it meets the other requirements listed below.
      • Also in my market, if you have to walk through a bedroom to get to another bedroom, the county will call both of those bedrooms.  But HUD/Section 8 will only count that as 1 bedroom.
    • A bedroom has to have a heat source, a closet or something resembling a closet like a wardrobe/armoire, and at least 70 square feet with at least 7 foot ceilings.
    • Basement bedrooms are tough … unless it’s a true walkout basement where the door or full size window is attached to the bedroom AND you do not have to walk up stairs immediately upon exiting the basement, it’s probably not a bedroom.

NOTE: If in doubt, check with your local Section 8.  We do this with inspectors from time to time and they’re very helpful.

  • Sometimes you can add a bedroom to a house or “swap” bedrooms.  For instance, you may have a room that you know the tenants will use as a bedroom (as long as it’s safe of course) but that HUD won’t call a bedroom.  Maybe due to ceiling height or the “walk through a bedroom to get to a bedroom” issue.  In these instances, we try to find another space in the house that will qualify as a bedroom even thought the tenants probably won’t use it as one (like a 4 seasons room, for example).

This is just the beginning of what I’m looking for when buying houses for Section 8 tenants.  Want to learn more about how you can succeed as a Section 8 landlord? Reach out to me at jennifer@section8educate or through the contact form on our website.