If you’re considering investing in Section 8 housing as a landlord, there are a number of factors to keep in mind. Section 8 real estate comes with certain trade-offs, and the most successful landlords are the ones who expect them and understand them.
What are some of the potentially complicating factors you need to consider as a Section 8 landlord? Here are some tips, courtesy of Americas Housing Alliance.
Some landlords are initially surprised at how often property inspections take place under the Section 8 program – they’re done once a year even if there’s no tenant turnover. Inspectors are considering 13 different areas, from sanitary systems to electrical and smoke detectors. If there are major issues or you fail the inspection, you’ll be given a list of items to fix, and you can go through a re-inspection once these are completed.
Section 8 housing provides vouchers for tenant rent, but these do not include the security deposit amount. If you wish to collect this as a landlord, you have to get it directly from the tenant. Tenants are able to reach out to other agencies for financial assistance here.
Generally, you won’t receive your first rent payment until after the tenant moves into your property. This delay can be unexpected for some landlords, and you need to factor it into your finances.
Keep in mind that there’s a maximum amount Section 8 will pay. This is calculated using the Fair Market Rent tool for your area given the number of bedrooms you’re renting out – the housing voucher will be for between 90 and 110 percent of this number. In some cases, you’ll be able to rent your property for a higher amount.
Section 8 housing gets a bad rap in some circles because many believe Section 8 tenants are destructive on average. While there have certainly been some horror stories here, this is no different than tenants in a standard property – as a landlord, you always need to take the proper screening methods for your tenants and do your best to be careful. In general, this reputation is overstated, and most Section 8 landlords find no issue with tenants.
Want to learn more about Section 8 investment, or interested in any of our other services? The brokers at Americas Housing Alliance are standing by to assist you.