Being a landlord, you receive application for tenancy form many types of individuals and families. One of these types is section 8 tenants. If you do not know, Section 8 is a move by the government that aims to make rented housing more affordable for eligible families. As a property owner, you can accept section 8 vouchers from low income families and allow them to live inside your rental property. These vouchers are reimbursed by the government to cover the shortfall of any amount paid by such tenants.
Tenants must prove that their monthly household income is less than a third of the monthly rent being charged by landlords in their area. After that they become eligible for financing from the government. This program has become so popular among low income families that it has created a huge wait-list in many cities and neighborhoods.
There are both tenant based as well as project-based section 8 vouchers. If the voucher is tenant based, the family can move out of a home and use its vouchers to take advantage of the program in another property. On the other hand, project-based vouchers can only be utilized in a particular property designated under the program and a renter who moves out is not eligible for benefits in another property. Landlords who follow the guidelines of the HUD and get certification from the government have no worries about tenants as owners of these vouchers line up to gain entry into their property.
Pros and cons of renting to tenants with section 8 vouchers
Rent payment on time
As the payment of rent is backed by a guarantee from the government, you will get the money in your bank account on time every month.
No worries of vacancy
If you start accepting section 8 tenants, you will never have to worry about shortage of tenants. Low income families eligible under this program will line up to get a chance to live at your rental property. You will get lots of tenants even without any marketing efforts.
Free promotion of your property
If your property qualifies for section 8 tenants, government promotes it on many realty websites with ads. This is done to help low income families find suitable accommodation within their budget. It means your property gets highlighted without any marketing effort on your part.
You need not worry about tenants screening
One big benefit of allowing section 8 tenants is that you are not required to deploy a tenant screening system. All renters identified under this program have already gone through verification by government agencies.
Cons of allowing section 8 tenants
Be ready for tough inspections
Properties chosen under this program are inspected by the officials. You must be prepared for strict inspections where you need to prove that you have followed all guidelines. If there are any issues pointed out in an inspection, you must carry out repairs by the time next inspection takes place.
You cannot raise monthly rent
One of the biggest drawbacks of section 8 tenants is that you are not allowed to raise the rent like other landlords. Rent is calculated by the authorities and it is generally less than what other landlords get for similar properties in your area. Rent is capped and you cannot charge higher monthly rent from your tenants.
Eviction process is complex
Even though a background check on tenants has been done, it is possible to get a bad quality tenant at times. Dealing with a bad quality tenant is a complicated procedure under section 8 tenants. You are required to follow a certain HUD procedure to get a tenant out of your property.