Investing in Section 8 Housing, or the Housing Choice Voucher Program, can be a solid decision.
The federal housing program assists the low-income and disabled with housing needs.
The renters pay rent according to their income, typically 30-40%, while the federal government covers the rest, on a pre-decided amount based on fair market rent that takes market share in the area into account, as well as unit size and status of utility payments.
The program enables those who would otherwise have little to no options when it comes to housing live in a safe and adequate situation.
The demand for Section 8 housing is high and grows constantly.
As more and more men walk away from their familial responsibilities, leaving women to raise children alone, the need for subsidized housing units increases.
The economy also leaves many people plunging into the depths of low-income status, working at jobs that pay very little just to get by.
As the population grows, so does the disabled population and as will the number of affordable housing units required.
As our population ages, the number of low-income seniors is expected to rise, given the economic downturn that drained many investment accounts.
Investing in Section 8 housing is solid.
The controversy with investing in Section 8 housing comes in with miles of rules and regulations per the federal government that units must meet in order to gain Section 8 housing status.
The goal of the program is to provide a higher level of living quarters, after all, so there's little room for shortcuts.
This translates into a higher upfront cost and a possible risk in the future when regulations or rules can change.
After the initial investment, however, the housing units should be profitable over the long-term even when sweeping regulations change.
Investing in Section 8 housing can mean a steady payoff over time in the future.
With waiting lists in any particular area thousands-long, units rarely if ever go empty.
Due to the fair market rent calculation performed by the federal government, your units may fetch less than they would have on the open market.
However, by participating in a federally subsidized program, your units are fairly safe from local forces.
Should the industry in your town dry up tomorrow and people flee the area, your units should remain full while non-subsidized take a hit.
There is no such thing as a guarantee in investing, of course, but banking on federal programs comes with a certain peace of mind.