Top 4 benefits of investing in Section 8 properties (2024)

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Section 8, sometimes called the Housing Choice Voucher Programme, is a US federal housing subsidy programme for people on low incomes. Essentially it makes housing more affordable through heavily discounted rental payments. And at Bricksave, many of the properties we help you invest in are covered by the scheme. Here’s everything you need to know about Section 8 properties.

What is Section 8?

Section 8 aims to reduce rents to about 30% of a tenant’s monthly income, making well-maintained housing in great communities genuinely attainable. People can live in a qualifying home while paying far less than the normal market rate, and according to the Centre on Budget and Policy Priorities, over 2 million people in the US are already benefiting.

Section 8 is different from other social housing schemes

One key advantage of Section 8 when compared with other social housing schemes is freedom of choice. Section 8 vouchers can be used to access a much wider range of properties, giving tenants the chance to select a home that suits their needs: for example, nearer their workplace or in an area that they know or like.

There are lots of great things about the Section 8 scheme; here are just four to get you started.

1. Helping people on lower incomes find a good home

So what are the criteria for Section 8 eligibility?

• Family status. To receive Section 8 support, you need to have family status. There’s a lot of flexibility when it comes to exactly what defines a family, and individuals need to contact their local Housing Authority to ensure that they qualify in their region.
• Income level. Section 8 is all about helping people with low incomes to afford quality housing. To qualify, family income will need to be below a certain level, which is normally calculated as a percentage of an area’s average income. A low income is often defined as being 80% of this average, for example. The size of each family will also be taken into account.
• Citizenship. You will need to be a citizen of your country or have eligible immigration status to receive Section 8 vouchers. To prove this status, people are normally asked to verify it with a passport, social security card or similar documents.
• Eviction history. Nobody who has been evicted from a property within the last three years for breaking the law can claim Section 8 vouchers.

2. A growing demand

Across the market, there has been a huge surge in the need for rental property. A combination of higher purchase prices and post-pandemic economic challenges has seen more and more people seeking affordable rentals – demand is unprecedented.

In July 2021 the rental occupancy rate across the US reached 97%, so the pressure on affordable housing is growing. Landlords with Section 8 tenants are clearly set to benefit from constant demand, as their properties meet the needs of families who simply can’t afford unrealistic, soaring rents.

In a world where new leases are rising at record rates, month on month, the need for accessible, affordable houses has never been greater. Section 8 currently supports 2.2 million families and this figure is likely to keep rising.

3. Annual rent reviews

Section 8 allows landlords to annually negotiate an increase in rent, protecting the value of their investment long term. Over time, this means a property with Section 8 tenants could be more profitable than one with private renters.

Here’s an example. If you rent a property for $800 a month, over a period of five years, the rent could increase to $1,175. And because in most cases the scheme provides between 70% - 100% of monthly rent through government vouchers, you are not putting families under increased financial pressure in the process.

4. Long-term tenants mean better returns

Section 8 tenants are typically looking for a stable home for their families. If they like a property and the way that it’s being managed, they are much more likely to settle long-term than private renters. By minimising tenant turnover, Section 8 properties can provide a consistent, secure income for years to come, underpinned by stable, guaranteed rent payments from the government.

Investing in Section 8 homes with Bricksave

At Bricksave, we embrace Section 8 and its ability to provide quality homes for vulnerable people. That’s why we make sure that we offer properties that are accessible, affordable and good to live in.

It’s very much a win-win situation, thanks to the incredibly buoyant rental market and the opportunities provided by the scheme to people who might otherwise struggle to find a decent home in the right location.

From the investment point of view, Section 8 properties are a stable investment too. As a government voucher provides the majority of any rent due, there’s a much smaller risk that you won’t receive your income.

If you’d like to begin investing in property for as little as $1,000 and offer homes to people on low incomes, find out more about how Bricksave works and sign up here.