While there might be a stigma around Section 8 housing, it’s still something to consider. It’s commonly known for having too much government involvement, a lot of paperwork, lower quality tenants, and some legal issues that might come up. If you plan to own section 8 housing, the right property management company makes a difference.
What is Section 8 Housing?
Section 8 housing offers rental assistance for low-income households throughout the United States. This program has a goal of providing safe, sanitary, and decent housing to those that cannot afford the current market prices. Property managers gain specific incentives to work with this type of housing.
The HUD Housing Voucher program runs section 8. This program is either project-based or tenant-based. If it’s a tenant-based voucher, the tenant can select any privately rented home, as long as the owner is a part of the section 8 housing program.
However, if it’s project-based, the voucher is good for specific communities that work with public housing authorities. One of the major benefits gained by section 8 property management is the large number of pre-screened applicants to choose from. Landlords also get to charge full market rates with this type of program.
Pros & Cons of Section 8 Property Management
If you want to become a landlord for section 8 housing, it’s important to understand the pros and cons.
Pros
- Consistent rental income – Section 8 will provide a government-subsidized option, which means landlords get consistent rental income. The public housing authority will either write a check or make a deposit to the property management company. Late payments can cause a tenant to become ineligible, so they tend to pay on time.
- Fewer Vacancies – With a high demand for section 8 housing, there are plenty of renters ready to get into your properties.
- Pre-screened applicants – The housing authorities take care of the screening process for you. They check income levels and criminal backgrounds.
- Free Marketing -Section 8 rentals are often found on the HUD website, which means you get some free marketing with this type of property.
Cons
- Tenants Might be Difficult – You might get great tenants, but section 8 does tend to attract low-quality tenants. It’s a bit more common to deal with criminal issues, drugs, or property management with section 8 property management.
- Harder to Evict Bad Tenants – Section 8 tenants are not as easy to evict, but this will depend on your state.
- Harder to Attract Other Types of Tenants – If you advertise your rentals as accepting section 8, it might cause other full-paying tenants to skip over your listing.
- Regulated Rental Price – When you participate in the section 8 housing program, you have to set rental prices based on the Fair Market Rent from the HUD.
- Yearly Property Inspections – You will also have to have an annual inspection done of the property. If this inspection isn’t passed, you will have to fix things and have a re-inspection done.
Section 8 property management isn’t the same as regular property management. It requires knowledge of the paperwork, rules, laws, and regulations of the program. If you plan to get into this section of the rental market, make sure you have the expert help you need.