You may be a newbie in the real estate rental market, or you may have built an expansive portfolio of property investments already. No matter who you are, you may have heard about Section 8 rental investments before. Experts advise investors to stay away from Section 8 housing. But is it really that risky?
Americas Housing Alliance, LLC provides more information about Section 8 rental investments.
Section 8 housing refers to a program of the U.S. government that offers up-to-standard rental properties to low-income families, the elderly, and the disabled. Without section 8, these people may not be able to afford safe and decent housing. They will otherwise live under poor housing conditions or in neighborhoods with high crime rates.
Split Housing Costs
Section 8 allows low-income families, the elderly, and the disabled to afford a house by splitting rental and utility payments between the tenants and the housing authority. The authority pays around 40 to 70 percent of the total rental and utility costs. The tenant, on the other hand, pays the remaining percentage of the total costs.
On Time Partial Payments
Herein lies the advantage of Section 8 housing for investors. Every month, you will receive a percentage of the total payment for your rental property because of the government subsidy. Of course, you should pay the remaining amount. The good thing about this program is that you can be sure that the amount will definitely be paid partially.
Moreover, Section 8 allows you to reach out to a whole new market. You may gain an advantage over competitors who may not accept Section 8 tenants. At the same time, concerns about tenant behavior can be addressed because you can still screen tenants. You can till rent out to non-Section 8 tenants as well.
With the advantages outlined above, you can carefully consider an investment in Section 8 housing. This type of investment makes more sense for investors who have low or middle-priced rentals. You can easily qualify for Section 8 and enjoy all the benefits it can bring.