What Is Section 8 Housing? | Create Massive Income in 2024

would you invest in real estate if you knew your rental income was guaranteed find out how coming up next hey it's Yama welcome to the Section 8 Sensei today I'm going to show you how to get into an investment where your rental income is actually guaranteed um if you haven't already please subscribe to the channel turn on your notifications and get ready to learn how to make some money all right so let's just do a real quick background on Section 8 uh Section 8 is a federal program that was started by h74 and it uh is a rental subsidy program so it helps people with low income uh afford to rent so what happens is there's an exchange to the point of 2.2 million people in 2022 that are on these subsidies and essentially what happens is is these subsidies are given to the landlord Plus a portion that's given by the tenant so the tenant could be at 0 or they could be at some percentage of the rent but the remainder that comes from the city goes directly to the landlord and is guaranteed so that's the greatest part about it this is not a slum Lord program so HUD requires in order to get the money that you get a clean safe U you know environment for the tenant so they expect them to have a high level of living uh when they're being subsidized into this program all right so before we get into the nuts and bolts of this thing do me a favor in the comment section below let me know what you think the number one reason is that people don't invest in real estate I mean we all know it goes up so it's not that but there's something holding people back uh with investing in real estate so leave me something in the comments below and let me know what you think it is that's the biggest deter or obstacle for investors to jump into the space uh and become profitable all right so what we want to go through is some myths or some you know just things that I think are on the street that people kind of take as fact about the section a program it's kind of The Stereotype and the 10,000 foot view that people maybe have coming out of the shoot so we just want to clear some of these things up because we definitely don't want people operating with bad information and so I think if we can clarify some of these things and and kind of get down to the realities of some of this I think everybody will be able to make better decisions and you know make more profitable decisions um based on 100% of the facts versus a bunch of um myths and misnomers so the first one we have is tenants won't take care of my property the fact that they're Section 8 or not section8 really has nothing to do with whether they're going to take care of your property or not um some people are very clean and tidy some people are slobs um and you just don't know what you're going to get until you get it so it really has nothing to do with the Section 8 it really has to do with you know is somebody a slob or are they somebody that takes care of their belongings and keeps keeps things clean and you know does all of those things uh within their normal scope of their life all right number two Renning to section A tenants will deter other renters all right so keep in mind that there's no you know neon light or sticker on the wall or bumper sticker or anything that tells everybody in the world um that somebody is a sectionate uh voucher holder so there's no list there's no public anything that tells him so there's really no way to know the person who lives next door to you now could be a section a tenant and you would never know so just kind of a uh just kind of something to think about there that there's no connection or anything so all of that information is extremely private and so none of that's ever going to play a part in uh what happens to your property all right number three rent rates to Section 8 are lower than Market Okay this may happen but I can tell you this if you know what you're doing and you follow the plan especially the one that we do that will never happen to you because for example in our world we don't take any properties and put tenants in them in places where we can't see a minimum of a 20% spread between the debt service and the rental income so for us that's 180 degrees false okay now I have seen people who go into Section 8 but because they buy in the wrong area they're running to the wrong tenants they don't know how the voucher system works works and how payment standards are established Etc they get probably at Market or lower than Market rents um and they're really just chasing the guarantee more than they are the money so um it is possible that that could happen but that's because they're not using the program the way that it's meant to be used uh from a landlord perspective and they're not taking advantages of all the benefits and they're definitely misinformed because they never should have a property or a tenant in that situation to begin with all right number four Section 8 tenants have no incentive to pay rent all right so this is actually pretty much the opposite so remember the voucher program is a support system it's free money as long as the people qualify so they have what's called a tenant portion of the rent that they pay so let's say you have $1,000 in rent they could have you know anywhere from0 to5 $600 whatever depending on their income but a lot of times when you choose choose your tenants you're you're going to end up with people who are on the lower end so we have some properties that you know might rent for $3,000 a month and the Tenant is responsible for $50 or $100 and that's it so if you were in that situation and that's all you had to pay to live in a $3,000 a month property it's not real intelligent that you would try to screw that up by destroying the property violating your lease or not paying your tenant portion of rent so um they absolutely have an reason to pay the rent um and and they're incentivized to do so because they're on the program and you actually have a little bit of Leverage because if they violate the lease by either destroying your property or non-payment they could lose their voucher you know they can't just skip from your house to somebody else's and start all over again if they violate and they get evicted or whatever and your lease they could lose their voucher going into the next property all right number five no control over Section 8 tenant chosen okay so this is a little bit of misinformation what this is getting at is saying that hey if I go into the section a program I'm just going to get the hand i'm dealt with and whoever the attendant is is going to be chosen for me and I'm going to have no say so that's not true as a landlord you have 100% choice of who you can um put in there and in fact the pH housing agencies are actually forbidden from steering clients to certain landlords so they can't even so if you call up and say hey I have a you know three-bedroom property blah blah blah blah blah here's my amenities do you have anybody for me they're actually not allowed to direct you to anybody um so just keep that in mind you 100% have the choice of who the person is um you can do whatever background screening you want whatever you know just make sure it's consistent for every tenant you have section8 or non but you can put them through any um any type of you know background or investigation or whatever you want to vet them out however you want to vet them but you always have a 100% choice of who goes in your property okay number six Section 8 tenants will attract crime the Section 8 tenants when they get into the voucher program have to go through a background check so they're going to be screened for felonies or misdemeanors or any anything in the background check criminally they they want to know if they have that on their record they won't qualify for the voucher program so that's number one two um you know so unless they've slid under the radar on all that and they're a criminal and you know they're a drug dealer a prostitute or something like that and somehow that slip through the cracks which you know we've never seen before but I guess is possible um you know you're not going to be in a situation where you know the section a tenant themselves is bringing some sort of criminal activity to wherever it is so most of the time we always tell people hey look if you buy a property that's in a place that's got a high crime rate then that's what it is but that's not because of section A10 or whatever they are you know if you buy a property that's in a non-high you know not in a high crime rate area then you know it's probably going to stay that way so the section 81 is not going to vary that whatever whatever situation you're in One Direction or the other they're just going to live within whatever the situation actually is all right number seven if my property is Section 8 I always have to rent to Section 8 tenants okay remember the property is not Section 8 it's the tenant that's a Section 8 voucher holder okay that's I think the big mistake that people make or misunderstanding that they have is just because you put a property into the Section 8 System where you have a Section 8 tenant you can take at the at the time that that property is leases up you can roll from a Section 8 to a nonsection 8 and then back and forth and do whatever you want the property is not handcuffed into the section a program once you jump into it it only has to do with the tenant on the voucher system so there's no connection between um your ability to move in and out of the system uh at whatever point you want when your leases are up and rent to whoever you want uh number eight it's too much of a hassle just like anything that's worth it it does require a little bit of effort okay now I believe that your high side and your benefit will out raise your workload and your risk okay okay and obviously it's a little overwhelming if you are first starting out and you don't know what you're doing which is why we're trying to help you through this process so it makes sense and it's very systematic for you um you'll get better and better as you get more properties and go through more leases but um you know it's definitely worth it at the end because if you go out and you're just renting to a regular person and you're at Market or below Market rents and you have no protection because your rents aren't guaranteed and all these things happen you know there's some risk in that it may be quote unquote easier but it's still risky so um this gives you a little bit of peace of mind and a little bit of stability and uh eliminate some of that risk by having the rents being guaranteed so those are all things that you want to think about as you kind of go so kind of take a look at the list again here here's a list again of all of them and uh I think you know we talked about you know kind of where these things have gone sideways and so you know I think it's important to uh make sure that you add address these for what they are and uh really find out the truth because I think you'll make some better decisions so there's a couple challenges that kind of uh are in the space right now as far as section A goes so the big problem is is obviously in general the markets have a lack of housing right so just in general there are more people that need to live somewhere than there are places to live so that that's just a global problem we have across the board which is why you're seeing families combine into into one property versus two or you know these types of things people living at home longer etc etc there's just an overall shortage of housing so what puts pressure on the system is there's actually more vouchers that are looking for properties than there are properties to rent to those people and because of the myths and some of these other things a lot of uh you know if you were and I were just to go out and look for a property to rent we would have a choice of pretty much any property we want assuming we pass the credit check and the income check and all that well a majority of those properties if I were apply and say hey I'm a Section A voucher holder a lot of landlords just wouldn't accept it and they would basically ignore my application so the the amount of vouchers that are out there or section A tenants looking for properties is much they have much smaller choice because there's only a certain amount of landlords that will accept that so it's a little bit different than like let's say you had like food stamps as a subsidy for food well every grocery store is required to accept the food stamp well when you come to Section 8 not every landlord is required to accept the voucher so that's a big problem when it comes to uh the shortage the other problem is is that rents in general have risen you know over the last 450 years at about 9% a year so because of that the affordability is kind of out the window which is why this program is so important because a lot of the people in the section 8 program are single moms you know a lot of kids and so you you know you have all these um younger kids that need housing there's a lot of times there's no Father Figure Etc Etc so you want to make sure that you know if you're doing this type of thing you can feel good about what you're doing because you're helping um you know lower income people that really need help um you know get into their into their housing and stuff um the benefits are really pretty simple um from the landlord perspective anytime you can lock down rent no matter what it is but at least know that it's coming or the majority of it is coming and there's not a risk for the payment not being made especially when you have Debt Service that's a huge huge huge benefit for you as a as a landlord um call it from a business standpoint investor standpoint or just pece of mind it's a it's a great thing to have the tenants benefit is clear um you know if I can't afford more than $500 a month I'm going to have a hard time putting a roof over my family of five so if I can get a subsidy and end up renting a house for $3,000 a month that I only pay 500 for that's going to change the life of everybody under that roof so those are really the two benefits that you have in the uh space there and uh what really what drives the program all right so I hope that gave you a little bit of background on Section 8 some of the myths some of the truths some of the things that are made up in people's heads and uh you kind of see that the program does have a need um it does serve a purpose it you know it's if you're going to do something you might as well do good um so all of those things matter in this situation so we're going to continue to post videos on it different aspects of it hopefully it's something that you think you can take advantage of and try to be part of the solution um that's out there uh if you haven't already please subscribe to the channel uh like the video forward to somebody that you think might be interested in the section a program all my contact info is uh in the description below if you have questions you need help with uh trying to finance some of this stuff and try to figure how to get off the ground uh feel free to reach out anytime and we'll talk to you soon [Music]