Here’s a terrific article from Mark Ford in DailyWealth:

“Every month, the government deposits $1,250 into my bank account. But I’m not collecting Social Security. And I’m not talking about tax refunds or municipal bonds.

I’m talking about Section 8 housing.

Section 8 housing (officially Section 8 of the United States Housing Act of 1937) is the government program that helps about 3.1 million low-income families pay rent. It operates through several programs, the largest of which is the Housing Choice Voucher program. It was meant to pay for “a portion” of the rents and utilities of those in its care. But often, as you will see, payments are greater than competitive rental prices.

Here’s a real-life example…

Peter, my partner in local real estate ventures, recently bought a house in a working-class neighborhood. In 2008, the house sold for $500,000. Three years later, we bought it for $80,000 and renovated it for another $15,000. It’s a three-bedroom, two-bath house with a fenced-in yard, new appliances, and tile floors.

Instead of renting it on the open market, Peter offered it to the local Section 8 housing authorities. They found a young lady with three children to take it. She seems to be an upstanding citizen – she is clean and sober and holds down a steady job. Her only “issue” is that she’s had three kids from different men who don’t feel it’s their job to provide for their children.

The Section 8 people offered to pay us $1,500 a month for this property, which is about $300 more than it’s worth. After Peter and I cover the monthly expenses – the mortgage, maintenance, and taxes – we are netting more than 12% on our cash. That’s darn good money in today’s world. So there must be a catch, right?

I figured the catch would be…”

Read full article…