The new normal that hit us in 2020 left investors in all kinds of assets nervous about the future. Stock markets crashing, real estate owners are not getting their rents, and bondholders are skeptical about ever getting paid. But there’s one type of property that is performing exceptionally well.
Never having to worry about getting paid again is something that attracts investors. Every time someone puts their money away to invest in something, they want to know three things: how do I get in, how much will make, and how do I get out. And the lest question is the most important to be answered.
Investments come with risk. Always. There is no such thing as “risk-free” investment. Even saving your money at home has its risks: inflation, getting robbed, a fire. So, when you find something that gets close to having no risk, you pay attention to it.
Imagine not having to work for money anymore; having a source of income that is [virtually] perpetual, with very low risk. Imagine waking up without the anxiety of having to make money to pay your regular expenses, like rent or mortgage, lease or car finance, utility bills. That’s freedom.
Section 8 is a program where the Government helps low-income families and individuals to pay for their rent, in full or partially. Those who seek the benefit need to qualify, as well as the property owners who would like to have their assets rented.
What attracts investors to this kind of real estate investing is knowing that is the Government who will pay the rents, not the tenant. This reduces the default risk to meager standards. You won’t have to worry about getting paid, hiring lawyers to receive your rents, or pursue an eviction order if your tenant defaults. It’s the dreamland of investing.
Crisis Proof Cash Flow
Residential income is proving itself the be the best kind of cash flow investment in real estate. Usually, investors default into commercial or industrial leases looking for a safety net. By having corporations and businesses as tenants, the risk of default seems lower on those cases. But that’s not true.