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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (7170)	12/6/2002 3:56:00 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 306849

Section 8 seems just a worse version of being a landlord in general in sue-happy America. why take on all that property specific risk and tenant risk (and with HUD do you even get to choose the tenants!) when it is possible to diversify. i would not be a landloard unless i was a lawyer and/or real estate professional. as they say, a lot of pain can happen when one stretches too far for yield.

To: MSI who wrote (7170)	12/6/2002 7:10:46 PM
From: Doughboy	Read Replies (1) \| Respond to of 306849

I've had and continue to hold high-end rental properties, and the ease of renting them is certainly a plus, but it takes me a few years of ownership before I can get cash-on-cash returns to go appreciably above 10%. This Section 8 building I'm looking into has immediate 15-20% cash-on-cash returns. And that's figuring for full-time management, excessive vacancy, and high maintenance costs (I'm budgeting for some totally trashed apartments and problem non-paying tenants). The rents from HUD are wired into my account and HUD automatically raises the rents by about 5% per year. I just don't see the downside. But it helps to hear some others' perspectives before I jump in with two feet. Any Section 8 nightmares out there? Doughboy.