How to Invest in Section 8 Housing

Section 8 housing vouchers are provided by HUD

Investing in Section 8 housing means being able to collect a substantial portion of a qualifying tenant's rent through Section 8 vouchers, between 60 t0 70 percent. Section 8 housing is a federal voucher system for assisting low-income persons or families with their housing rent. Provided by the United States Department of Housing and Urban Development (HUD), it refers not to the housing type or dwelling itself, but rather the income level and qualification of the individuals or families in need of assistance. Therefore, Section 8 housing can mean a type of housing, whether apartments, duplexes, or single family homes.

Instructions

1. Contact a local real estate agent or broker. This will be a proper first step for an investor that wants to invest in Section 8 housing. These professionals will be able to answer many questions about owning Section 8 property such as, how often are government inspections conducted? How does the government provide the vouchers? What if the tenant does not make their 30 percent or 40 percent contribution? How many Section 8 tenants is a particular property allowed to house?

   An agent or broker will also assist the investor in locating properties suitable for Section 8 housing and walk them through the process of qualifying Section 8 tenants.

2. Locate a property for Section 8 rental. This can be any type of housing, but typically, Section 8 housing is apartments (with four to eight units), duplexes or triplexes. Keep in mind if the property is not already receiving Section 8 vouchers, it will have to undergo an inspection to qualify for the Section 8 vouchers. The higher the poverty level in a given area, the more Section 8 tenants will be available to occupy the property.

3. Rent the property. While Section 8 vouchers are given on the basis of the tenant's income, the federal government will conduct routine inspections to ensure the property is fit for occupancy---so it is up to the property owner to list and advertise the property and moreover to qualify prospective tenants. It is advisable to run a background check and request proof of employment via pay stubs or any documentation supporting their income if the tenant is not employed.

Tips & Warnings

• HUD does not run a background check on Section 8 tenants, nor does it provide a list of tenants or refer tenants---it is up to the investor/property owner to find and screen tenants

References

• "Landlording on Auto-Pilot: A Simple, No-Brainer System for Higher Profits and Fewer Headaches"; Mike Butler; 2006

Resources

• "Section 8: Federal Assistance, US HUD"; L Surhone, M. Timpledon, and S. Marseken; 2010