How Michael Caggiano Scales Section 8 Rentals with Condos and HOAs

Why This Episode Matters

If you’ve ever wondered how investors can consistently cash flow from affordable housing without drowning in repairs or management headaches, this episode is for you. On the Affordable Housing & Real Estate Investing Podcast, I sat down again with Michael Caggiano, founder of Section8Secrets.com. Michael has mastered the art of investing in condos and HOA communities with Housing Choice Voucher (Section 8) tenants.

He’s not just theory. Michael manages 8 properties across multiple states, cash flows over $7,300 per month, and has built a systematic model that allows him to scale while working a W2 job and raising a family.

How Do You Know What Rent Section 8 Will Pay?

New investors often ask: “How much rent can I actually charge, and how much will the government pay?”

Michael breaks it down simply:

• Fair Market Rents (FMR): Published annually by HUD. You can look up by zip code and bedroom count.
  
  

• Payment Standards: Local housing authorities often pay above FMR to cover utilities.
  
  

• Targeting: HUD bases FMR on the 40th percentile of rents in a market. Smart investors use this to identify properties where Section 8 will approve rents.
  
  

Michael even built a deal analyzer that pulls FMR data for every county in the U.S., removing the guesswork for investors.

Should Landlords Include Utilities in Rent?

One of the most debated questions is: “Should I cover utilities to get higher rent?”

Michael’s answer: usually no. Covering utilities can cut into profits and lead to tenant waste, like blasting heat with windows open. The margin of extra rent rarely justifies the hassle.

But here’s the nuance:

• In condos with low utility costs (shared heating, stacked units), it sometimes makes sense.
  
  

• HOAs that cover water, sewer, or trash can be leveraged, since HUD will reimburse part of those fees.
  
  

This flexibility makes condos in HOA communities a sweet spot for Section 8 investing.

What Makes Condos and HOAs Better Than Single-Family Homes?

Michael compares the two models:

Single-Family Headaches:

• Lawns, roofs, siding, grading, driveways, crawlspaces.
  
  

• More repairs inside: disposals, ceiling fans, large HVAC systems.
  
  

• Larger square footage with no rent premium from HUD.
  
  

Condos & Townhomes Advantages:

• HOA covers exterior issues.
  
  

• Smaller units mean fewer repairs and quicker turnovers.
  
  

• Same HUD rents as larger homes because FMR is based on bedroom count, not square footage.
  
  

• Less competition from investors, since many avoid condos.
  
  

Result: higher ROI per door with less effort.

How Can You Scale a Section 8 Portfolio Without Partners?

Many investors think they need partners or syndications to grow. Michael proves otherwise.

• Cash Flow Recycling: Every 7–8 months, his existing portfolio produces enough to buy another property.
  
  

• No Property Manager Needed: His systems (Google Form tenant screening, inspection checklists, deal analyzers) eliminate the need for expensive management companies.
  
  

• Avoiding Investors: Without outside partners, he keeps 100% of cash flow and appreciation, and avoids time-consuming investor calls and disagreements.
  
  

This lean model allows him to scale steadily without creating another full-time job.

Key Insights from Michael Caggiano

• Know your numbers first. FMR and payment standards dictate your rental ceiling.
  
  

• Condos beat single-family for Section 8. Lower maintenance, fewer repairs, and same HUD rents.
  
  

• Don’t automatically include utilities. The small margin rarely offsets the risk.
  
  

• Scale with systems, not syndications. The right process lets you expand without partners.
  
  

• Reinvest cash flow. Compounding is the secret to long-term growth.
  
  

Best Quotes from the Episode

“HOA fees are not your enemy. They’re your friend, because they eliminate problems and let you scale.”

“The government doesn’t care if it’s a 3,000-square-foot home or an 800-square-foot condo. FMR is based on bedroom count.”

“Most people think they need investors. You don’t. The biggest cost you risk isn’t money—it’s your time.”

“With the right model, every 7 months my portfolio buys me another property.”

Common Questions This Episode Answers

How do I calculate Section 8 rent?
Check HUD’s Fair Market Rents for your county and bedroom count. Then compare with local payment standards.

Is investing in condos better than single-family for Section 8?
Yes, because HOAs cover many expenses, condos cost less to acquire, and HUD pays the same rents by bedroom count.

Should landlords include utilities in Section 8 rent?
Usually no. The added income rarely offsets the hassle and waste risk, unless utilities are already low or included in the HOA.

Do I need investors to scale a Section 8 portfolio?
No. With strong systems and cash flow recycling, you can scale steadily without syndications or outside capital.

What’s the average ROI per door in this model?
Michael averages about $1,000 per door in net cash flow on his condos and townhomes.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. His mission is to provide everyday investors with the tools, knowledge, and connections to build wealth while solving America’s housing crisis.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.