2-Minute Money Manager: Is ‘Federal Rent Checks’ a Legit Program?

Woman Capital
Photo by eurobanks / Shutterstock.com

Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about investing; specifically, whether a heavily advertised investment program called “Federal Rent Checks” is worth your time and effort.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “Earn 50 Times More on Your Savings” and “Should I Invest in Real Estate Investment Trusts?” You can also go to the search at the top of this page, put in the word “Investing” and find plenty of information on just about everything relating to this topic.

And if you need anything from ideas to make extra money to a mortgage, be sure and visit our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by Money Talks News, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Cathy:

What do you think of the “Federal Rent Checks” I have been hearing so much about lately. Is this a legit program? Seems a bit too good to be true?

I have to admit, I’d never heard of “Federal Rent Checks” before Cathy sent me this question, so I had to do a little homework on this one. But I found an article or two, so now I’m ready to help.

What’s the ‘Federal Rent Checks’ investment program?

Cathy is asking about an investment program called “Federal Rent Checks” that she saw online. You can see it as well — just do a web search for “Federal Rent Checks.” But look, don’t touch.

The pitch basically implies that since the federal government pays rent on some of the buildings it uses — and you, as a taxpayer, “own” the federal government — you’re entitled to your fair share of the monthly rent the government is paying.

Simple, right? Here’s a cut and paste of a few words they use:

“Each of your ‘Federal Rent Checks’ could initially be made out for $1,795. But over time, those checks could be worth much, much more.”

After a brief written pitch, you’ll be asked to view an online video that explains the concept further and is packed with pictures of “real” people and the fat federal rent checks they’re getting every month. Some of the checks are more than $15,000.

Wow!

Is it legit?

If the question is, “Are federal rent checks a real thing?” The answer is, “You bet!”

Uncle Sam absolutely occupies lots of office space in lots of buildings nationwide. Many of those buildings he owns, but some of them he rents. So, sure, the feds are definitely paying rent.

But who are they paying it to? Here’s where the logic kind of breaks down.

Think about it: When you pay rent, whom are you paying it to? Answer: You’re paying the landlord — the building owner.

And who owns the buildings being rented by federal government agencies? One likely landlord is a real estate investment trust, otherwise known as a REIT.

A REIT is simply a company that owns, manages and/or finances real estate. In other words, it collects rents from tenants, like Uncle Sam, then passes along the income to the company’s shareholders, one of whom could be you.

How do you become a shareholder and get a chunk of the rental income the REIT collects? You buy shares of a REIT like you would any other stock, wherever stocks are sold. You can also buy groups of different REITs with mutual funds and/or exchange traded funds, also known as ETFs.

So, here’s your bottom line: If you want to collect federal rent checks every month, no problem: You just need to own shares in the company — the REIT — that owns the buildings.

And that’s ultimately what this pitchman is telling you to do: Buy REITs. But here’s what he’s not telling you: In order to collect $15,000 monthly, you’d likely have to put $2,000,000 or more into a stock — one that’s not guaranteed and, like all stocks, has risk attached.

Here’s the takeaway

Pitches like this one are common, and they’ve been around longer than I have.

Like many stupid investment tricks, it starts with a kernel of truth: Federal agencies pay rent. But it paints this simple truth as a shocking secret; one that few understand and only our pitchman can reveal — for a price.

Bottom line? The same thing I’ve now said at least a billion times over my 40-year career: If it sounds too good to be true, it is.

Hope that helps, Cathy! And hope to see you all right here next time.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
How to Achieve Your Financial Goals in 2020
How to Achieve Your Financial Goals in 2020

New year, new you. Get your finances on track with the help of these tools for investing, saving, budgeting and earning.

This Online Bank Rated Best for Second Year in a Row
This Online Bank Rated Best for Second Year in a Row

This bank pays interest without charging monthly fees, but there’s a downside.

10 Items Every First-Aid Kit Should Have
10 Items Every First-Aid Kit Should Have

Take control of your health and safety by customizing your own first-aid kit with these Amazon purchases.

How to Avoid Being Surprised by 7 Nasty Expenses
How to Avoid Being Surprised by 7 Nasty Expenses

Major expenses are difficult to predict, but there are ways to make sure you’re protected.

Retiree Households Lose $111,000 to This Social Security Misstep
Retiree Households Lose $111,000 to This Social Security Misstep

A study finds 96% of retirees make this mistake when claiming Social Security benefits.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

This Is the Most Popular Age for Claiming Social Security
This Is the Most Popular Age for Claiming Social Security

Both men and women are most likely to start receiving Social Security benefits at this age.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

6 Things You Should Never Buy at Trader Joe’s
6 Things You Should Never Buy at Trader Joe’s

We love Trader Joe’s for plenty of reasons. But think twice about this handful of products.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have these documents that are crucial to their golden years — especially during a pandemic.

7 Unusual Ways to Declutter Your Home
7 Unusual Ways to Declutter Your Home

Tired of possessions weighing you down? Here are seven ways to declutter painlessly and effectively.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Expenses That Quietly Drain Your Wallet
11 Expenses That Quietly Drain Your Wallet

It’s scandalously easy to overspend in these areas of your life.

9 Dumb Ways You Are Ruining Your Home Value
9 Dumb Ways You Are Ruining Your Home Value

Homeowners, beware these mistakes that can drive away potential buyers.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Things That Really Are Free on Amazon
10 Things That Really Are Free on Amazon

These freebies are available to anyone — no Prime membership necessary.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

15 Outrageously Overpriced Products — and How to Save on Them
15 Outrageously Overpriced Products — and How to Save on Them

Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.

Why Half of Retirees Now Owe Taxes on Social Security
Why Half of Retirees Now Owe Taxes on Social Security

Growing numbers of seniors are paying taxes on their Social Security benefits, but you might be able to avoid this fate.

18 Amazon Purchases That We Are Loving Right Now
18 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.