In the United States, 10 million people receive rental assistance from a federal level, with 69% being the elderly, children, or people with disabilities.
One way to help is to enlist your rental property unit in the Section 8 program. Section 8 can be a great way to get financial assistance for housing costs, but it's essential to be aware of the potential drawbacks before enrolling.
If you are considering whether or not the Section 8 program is right for you, keep reading. This article will provide you with some pros and cons of the program to help you decide.
What Is Section 8?
Section 8 is also known as the housing choice voucher program, and its purpose is to assist people such as low-income families in affording rental housing they may not have been able to otherwise. The Section 8 program also extends to the disabled and the elderly.
The US US Department of Housing and Urban Development funds Section 8, and residents of the US can apply for rent-assisted vouchers.
The Pros of the Section 8 Program
As a rental property investor, you may be wondering if it can be worthwhile for you to rent to Section 8 tenants. There are a few positives which we will list below.
When leasing to Section 8 tenants, the income from your rental property is more assured than if you were leasing to regular tenants. This is because the US government covers 70% of the required rent, while the remaining 30% is the tenant's responsibility.
If you're struggling with rent issues, Section 8 may be an ideal solution to this problem, as the balance covered by the government is paid directly to the landlord.
Fewer Vacancy Issues
You are targeting a specific market by renting to Section 8 tenants. This market is substantial, with 4.8 million Americans receiving housing assistance, so there is no shortage of families waiting for Section 8 housing aid.
By offering your unit to Section 8 tenants, you have a greater pool of potential applicants. In many cases, there are waiting lists for assisted housing, and some lists may be closed altogether to overdemand.
The Cons of the Section 8 Program
There are a few negatives to think about when considering Section 8 tenants. However, you may feel differently. So let's review the cons now.
Because there are rules and regulations surrounding Section 8 properties, your rental will be under the government's watchful eye. For example, the US Department of Housing and Development decides your unit's rental. This is determined by calculating a Fair Market Rent (FMR) price.
Once your FMR has been decided, you may not increase your rental rates higher than set, nor may you accept outside payments for the property. Furthermore, your rental unit will be subject to an inspection of the premises to ensure your property meets the Housing Quality Standards.
Unfortunately, there is also sometimes a stigma surrounding Section 8 houses. Because they're available to low-income families, other tenants often consider these properties run-down or undesirable.
However, this stigma is untrue, especially if you properly maintain your property to meet the Housing Quality Standards we mentioned. By putting in some extra effort, prospective tenants won't be put off by its Section 8 title.
Consider a Property Manager for Your Section 8 Unit
Section 8 is a government-funded program that provides financial assistance to low-income families. The Section 8 program has its pros and cons, but overall, it is a valuable resource for those in need.
If you are looking for a top-notch property manager, visit our services page to see the many ways how we can assist you as a homeowner. We service the Orlando area in Florida, so get in touch today.