Buying apartment buildings that provide Section 8 Housing is so successful it has been called a license to print money. Obviously, we landlords do not really have the capability to print money. When Uncle Sam ensures your rental income, it’s likely the next best thing.

Federal housing assistance for low-income households started throughout the Great Depression as a way of transferring individuals from a substandard shelter and into safer housing. When shanty villages vanished and sub-standard housing was no longer the crucial problem, the plan focused on helping low-income households cover the increasing portion of their income spent on rent.

Today, low-income families that qualify for Section 8 pay a maximum of 30% of their modified monthly income on rent and resources. If a renter makes $2,000 per month, he’d pay no more than $600 for rent and resources. In case the Fair Market Rent for his flat is $1,100, the government pays the landlord the distinction of $500. One note of warning the Fair Market Rent is based on the U.S. Department of Housing and Urban Development, therefore, it is not a Marketplace rate in the feeling that the free market establishes it. Understandably, San Francisco, California rent levels will be higher than Milwaukee Wisconsin.

 

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