If you are a property owner, turning your land into an income-generating asset by converting it into rental housing is a good idea. And if you want a guaranteed monthly collection, you may want to consider being a Section 8 rental investor.
What is Section 8 Rental Investment
Americashousingalliance.com shares that Section 8 is a subsidized housing program under the US Department of Housing and Urban Development. Its primary purpose is to help low-income families, the disabled, the elderly and other disadvantaged groups find decent homes at subsidized rates (as much as 70% to 100% of the monthly rent) while providing incentives to landlords who list their properties under the program.
The types of houses covered by the Section 8 program include:
- single family detached
- duplex or two family
- row house or town house
- low rise (3 to 4 stories)
- high rise (5 or more stories)
- manufactured home
- group residence
- single room occupancy
- shared housing
Renting your Property Section 8 Style
Here's a guide on what you need to do:
1. Application with your local housing authority who will assess your qualifications and evaluate your rental rate which must align with the program's rates for comparable dwellings in your location.
2. Inspection for safety, security and strength of each major part of the home covering the rooms (living room, kitchen, bathroom and other rooms), building exterior, heating, cooling and plumbing and electricals, among others.
If you feel you just don't have the time for all the paper works, you can partner with a real estate investment and property management companies to do that for you.
Perks of Section 8
The biggest perk is of being a Section 8 rental investor is, of course, the guaranteed payment since the government is committed to ensuring you collect your payments on time. You are also assured of long, and continued income stream as the subsidized payments make tenants stay longer in their rented homes.
The law also allows Section 8 investors to charge higher rental rates over time (as much as 8% over five years). Your tenants are also required by law to keep the property in good condition.
How good your Section 8 Rental investment will turn out to be depends on how committed you are to making it work by finding solutions to challenges, being a good landlord and a smart business owner