Broke people live rich and rich people live broke.– Kris Haskins
Section 8 for Real Estate Investors – Here’s What You Need to Know
Many people hear about section 8 properties and immediately run the other way. It is not on their radar. But for Kris Haskins, these underserved communities have brought more than just a check. They have brought fulfillment in knowing he is stepping in and helping to change people’s lives.
On today’s episode of the CarrotCast, Kris will be showing us how section 8 for real estate can be a highly-profitable, overlooked income stream for investors. He aims to help others raise their financial literacy through real estate and entrepreneurship.
Read the Full Show Notes Below…
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Kris Haskins has done it all. He worked in the music business for several years, experiencing all of the highs and lows of the industry. Part of the reason he is so passionate about section 8 for real estate is that he knows what it’s like to struggle with housing inequality.
Not only have section 8 properties provided him with a profitable and low-maintenance portfolio, but they have also provided him with incredible tenants, experiences, and friendships. Here’s a look at how Kris incorporates section 8 for real estate into his portfolio and why you should too.
Serving the Underserved
At one point, Kris was on top of the world. But like many people who have money, he didn’t know how to manage it. After losing everything, Kris realized he needed an income stream and a life that was stable. He found his niche in section 8 for real estate, providing tenants with dignity, respect, and a quality place to live. For Kris, his section 8 tenants have proven to be more reliable, honest, and drama-free.
He highly recommends section 8 for real estate over conventional tenants. Today Kris has about 20 rentals, with 30% of those dedicated to section 8 housing. His other properties are lease-option, which means that no matter what the market does, Kris is able to count on a stable source of income.
Section 8 for Real Estate – The Pros and Cons
The Pros of Section 8 for Real Estate
You Will Always Get Your Money
The rental market is strong and affordable housing is in high demand. Filling your section 8 properties won’t be a problem. Plus, if your tenant should lose their job, the government will step in and cover the rent. You will be able to count on a steady check each month no matter the situation your tenant is in.
Your Tenants are Happy
As a landlord, when you step in with a positive attitude and respectful demeanor, your property will be a place people want to live. Many of these tenants have lived in unfavorable living conditions. To be in a place in which they feel safe and welcomed will give them a sense of pride, hopefully becoming stable and long-term tenants.
In Kris’s experience, his section 8 tenants have stayed the longest and have caused him the fewest amount of problems. He strives to treat each with dignity, empathy, and respect.
Repairs are Minimal
When the tenants are happy, they will do all they can to keep the peace. Their gratitude in having a high-quality place to call home eliminates the petty calls conventional landlords often deal with. Kris has had tenants handle their own repairs, make improvements, and treat the properties as if they were their own.
You’ll Get Market Rates
When using your property for section 8 for real estate, you will need to go through a “rent reasonableness test.” This will compare 3 similar units in your area, helping to determine a fair rental price. You won’t have to worry about renting at a reduced rate.
The Cons of Section 8 for Real Estate
When using section 8 for real estate, your property will be subject to inspection. The process can seem a bit tedious, but this is actually a good thing for new investors. It will force you to check the windows, doors, and locks. It will help you get your property into tip-top shape, which is something you should want to do anyhow.
Vacancy Between Tenants
Kris had a tough time coming up with cons for section 8 properties. The only con he could think of is the loss of income between tenants. That said, if you are providing a great place to live, people won’t want to leave. Your property will be in high demand, so you will be able to find a new tenant right away. The government doesn’t subsidize for the time in between – which is typically very minimal.
A big reason why Kris has been so successful with section 8 for real estate is that he has a meticulous process for screening tenants. He will pay them a home visit, ensuring things look like they are in order. The prospective tenants should be able to perform basic cleaning in preparation for your visit. Of course, you can have a bad apple, but the vast majority of Kris’s experiences have been positive ones.
How to Get Started With Section 8 for Real Estate
To get started with section 8 for real estate, you will need to register your property at Affordablehousing.com. You can list a single-family home, a unit within a building, or an entire multi-family property.
Once listed, you can take the property down at your discretion. People are looking for affordable housing of all types, in all sorts of neighborhoods. One-bedrooms, two-bedrooms, single-family houses, or townhomes, you can do it all with section 8 for real estate.