A friend of mine recommended we buy a house in Cleveland, OH, but we live nowhere near there. He suggested hiring a property manager to manage the property for us and have Section 8 tenants. I’ve seen videos of people owning multiple Section 8 units, but I’m concerned about the area and the economy in Cleveland. Any insights would be appreciated.
Sounds like your friend got his real estate degree from TikTok U. For the record, I’ve financed large-scale commercial real estate for 25 years, and seasoned developers typically avoid Section 8. Most tenants on Section 8 treat their units poorly, knowing they can just move if they get hassled. Collection issues also persist, even with low rents. It may seem like easy money, but there’s a reason they’re desperate for landlords.
Unless your friend is a successful real estate advisor, do your own research. This idea seems fraught with headaches.
Cleveland is not a good choice, especially for someone with no experience. Attracting low-income tenants and paying a management fee are not ideal. Buying in an area you don’t know is risky.
Did your friend run the numbers, or is this just a gut feeling? Make sure to analyze all aspects before committing.
We looked at the numbers, and they sound good, but I have a feeling this is a bad idea.