I don't know that market, but the thought of getting $1200 a month for a house that you paid $25,000 for raises a little skepticism.

You should be able to find the town on HUD's site and see what they pay for Section 8 rent in that town. They make very little allowance for condition or location. It is simply so much rent for a 3 bedroom and so much for a 2 bedroom. Their rent allowance includes utilities, though. You won't include utilities if you are smart, so the rent you would get from HUD would be less than what they are showing in their rent tables.

If it is a larger town, you can look on Craigslist and see what the asking price of rent is, and what kind of house commands that sort of rent.

And finally, call a couple of different property management companies and get their opinion on rents.

Also, be aware that unless you screen very carefully, Section 8 tenants will probably tear your houses up. There are a few good Section 8 tenants but they are not in the majority.