I’m strongly considering buying SFH’s in an area because they would diffently cash flow. My only concern is their isn’t a large pool of regular tenants, their might be but it seems that area has alot of open listings for rentals.
my question is can i call the PHA (public housing Authority) in that county and find out if they have a lot of people with vouchers awaiting housing ?? and would they also be able to tell me what # of people are looking for 2bedrrom, 3bedroom, 4bedrooms etc…
anyone with section 8 tenants have any insight ??
I just got the utilities allowances online for the area so this is the last step before i start buying up foreclosures and fixing them up for government employees (section 8 people) :biggrin
My only concern is their isn't a large pool of regular tenants, their might be but it seems that area has alot of open listings for rentals.
I would definitely determine the market situation before you buy. An area with a high vacancy rate is not a good thing for the rental business.
my question is can i call the PHA (public housing Authority) in that county and find out if they have a lot of people with vouchers awaiting housing ??
Absolutely, you should call the PHA and determine the Section 8 situation. Of course, you realize that Section 8 is not for government employees. I’m assuming you were joking - I’m a little slow. Also, I would strongly suggest that you make the tenants pay the utilities.
I knew you would have some insight mike much appreciated. :beer
yeah I was joking about the government employees. I would diffently make them pay their own utlities. the allowance sheet is very inaccurate.
as for the vacancy rate, I’m going by looking at craiglists listing for apts for rent. theres a ton. I’m not sure if it is reliable tho.
another area i’m looking at has almost no listings for rent on craigslist. I didnt think this area would be easier to rent to it doesnt have as many buisnesses there.
would someone at the PHA be able to tell me in detail the needs of people waiting 2bd, 3bd, 4 bd ??
Liquidity - have you considered driving through the neighborhood and looking for “for rent” signs? I drove through an area that I am planning to target this past Saturday and I saw tons of for sale signs and very few for rent signs. This tells me that there are few properties for rent in the area. Because I am targeting that area I am going to drive through it again this weekend. I wrote down the address of all for sale and for rent houses I saw. As I get familiar with the area, I will check if the houses sit on the market for a long time before being rented…
Yes and no. The area i’m looking at is a whole city. the properties (about 25) i have looked at i have noticed for sale signs. When i looked @ 4 unit or bigger apartments i noticed for rent signs.
this area has been hit hard by foreclosures. real hard. Houses i look at i notice they sold for 80k (or more) 2 years ago and their listed for 20k. theres alot of deals out there plus they still have new jobs flowing in so i think that market will be good in the future. I live in michigan btw
Im looking in this area because the rentals would cash flow. my city where i live you cant find deals that would cashflow. So i figured going into the bigger city with a ton of great deals (lots of equity) is the way to go.
What is the date the census data was collected. Any vacancy rates from months or years ago is totally worthless. Vacancy rates can change VERY QUICKLY as the local economic conditions change and you need to know what the vacancy rate is NOW. I would strongly suggest joining the REIA in the area you plan to invest and making friends with the SUCCESSFUL landlords in the area. They’ll know the vacancy rate in the area.
Liquidity - I like propertymanager’s suggestion (I am going to my first REIA meeting on July 14th :O)
Having said that, I wouldn’t feel comfortable making decisions based solely on statistics or other people’s opinion. No matter how recent the statistics or knowlegeable the people. I would still spend the time driving through the area. If the area is too big (like the whole city), I would probably try to identify an specific area that looks more promising than others… And drive around that area. Look for areas where you feel you could get a bigger pool of tenants - maybe close to the city center, or close to major hospitals, maybe close to big university, or a commercial district.
Also you should find out what the Fair Market Rent (FMR) is on your city so you will know what the maximum is that you can receive. You can get a little more insight from my section 8 article here: http://www.fliprent.com/2008/06/19/renting-to-section-8-tenants/
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I already have the FMR for the area and the Allowable utility allowance’s . I actually have FMR values’ of 4 areas I’m considering + their utilities allowance’s.
I wouldn’t judge how difficult it is to find renters based on the number of rental listings. You might want to check the area for the percentage of landlord owned homes.
It sounds like the area isn’t all that great. Sometimes its because its a lower income area where people can’t qualify to buy homes. And investors may own a larger percentage of homes.
This can be a good thing. People can’t buy so they HAVE to rent. Might explain the low vacancy rates. You have a captive audience. The advantage with section 8 is you don’t have to worry about them skipping out on the rent. They’re obligated for the year lease.
Try to find the ones that get 100% of their housing paid for. The less money they make, the larger portion of your rent check will be coming from the govt…