Advantages of Becoming a Section 8 Landlord
Have you ever questioned whether to become a Section 8 landlord or what are the advantages of signing a lease agreement with a Section 8 voucher holder? Becoming a Section 8 landlord is an experience that is beneficial for both the landlord and the renter. The Section 8 voucher program is in place to give low-income families access to both safe and affordable housing. Here are a few pros of accepting a Section 8 tenant and partnering with PMHA.
WHAT IS SECTION 8 HOUSING?
According to the U.S. Department of Housing and Urban Development (HUD) the Section 8 Housing program, also known as the Housing Choice Voucher program, is the federal government’s extensive program that assists low-income families, the disabled, and the elderly to live in cost-effective housing that is safe, sanitary, and in good condition. Within this program, housing assistance is provided directly to the family, so they can find their own housing (including single-family homes, apartments, mobile homes, and townhomes).
As a participant in the Section 8 Housing program, the renter has the freedom to make their own housing choices as long as they meet the requirements of the program.
BENEFITS OF RENTING TO SECTION 8 TENANTS
Becoming a Section 8 landlord is an exciting and important opportunity. There is also a great deal of support and incentives to offer as you start your journey in this role. These help to streamline the process and make it as easy as possible for all parties involved.
Currently, there are over 515 private property owners and management agents partnering with PMHA’s Section 8 Voucher Program. These landlords have provided housing to over 1,800 low-income households throughout Portage County. This is making a huge difference in our community. If this is something that you are considering, read our summary of the advantages and incentives you would gain from renting to Section 8 voucher holders, to help you make the best decision for you in this new chapter.
CONSISTENT RENTAL INCOME
One of the standout pros of becoming a Section 8 landlord is the consistent rental income from the government. Whenever you rent to people in the Section 8 Housing program, the government will cover the remainder of the rental cost after the participants’ income ranging between 30% and 50% of the total rent. This means that rent payments are consistent and being paid out on time each month by the housing authority. This will give you peace of mind as a landlord.
FREE ADVERTISING
Becoming a Section 8 landlord means that you will have free advertising assistance through the PMHA website, in-office interact board, and a maintained Landlord Listing Handout. This service allows owners and landlords to promote their rental properties and highlight that they are participating in the Section 8 Voucher program. Contact Mckensi Stankiewicz for more information.
PRE-SCREENED TENANTS
Through the Section 8 Voucher program, every applicant is screened before being issued their voucher. This means that before they can rent your property, participants will be screened for income and employment verification, previous non-compliance with a program that is subsidized by HUD, and criminal history. The screening process provides protection for your rental as well as them meeting a certain level of standards provided by HUD.
LOWER TURNOVER RATE
Since your potential tenants, as a Section 8 landlord, have already been screened, renting to these participants will yield fewer issues that may result in evictions. The opportunity to have fewer evictions means that you will have a lower turnover rate for your property. As eligible families know, it may be difficult to find other landlords who will accept their voucher which will lead to them having longer tenancies. Also, a lower turnover rate means you will be able to spend less time advertising for new tenants and continue to have a consistent stream of rental income. Please note that though PMHA does their screening, you are encouraged to conduct your own, including their eviction history.
REDUCE THE AFFORDABLE HOUSING CRISIS
The shortage of affordable housing has long been an issue and while the gap is starting to shrink, it’s not happening fast enough to account for the need for safe homes for growing families. One way to help is to create more affordable housing options. Many low-income Americans are on the lookout for homes that will give them security and a community to raise their children in. Becoming a part of this program will give you peace of mind as a landlord that you are doing your part to reduce the affordable housing crisis.
COMPETITIVE ADVANTAGE OVER OTHER LANDLORDS
One of the most overlooked Section 8 landlord benefits is the competitive advantage that you will have over other landlords. As we have already covered, the affordable housing crisis is very real, and many families are trying to navigate it daily. Opening your property to Section 8 Voucher holders means that you can advertise your property to both Section 8 participants as well as renters who aren’t part of the program. This will give you a competitive angle against nearby investors who do not participate in this program by renting to participants who are ready to lease your property.
ANNUAL PROPERTY INSPECTIONS
Renting to participants who are a member of the Section 8 Voucher program means that PMHA will ensure that your property is a safe home for your tenants. Before a tenant moves in, PMHA will send an inspector to your property before the initial lease, and then every two years after that. This must happen even if there is no tenant turnover. The inspector’s main areas of focus will be looking at electrical, water supply, sanitation systems, lead-based paint, up-to-code smoke detectors, and carbon monoxide detectors to comply with HUD’s Housing Quality Standards (HQS). PMHA encourages you as the landlord/owner to conduct regular inspections, as well, since it is your investment that is at stake.
RESTRICTIONS FOR SECTION 8 TENANTS
Unlike tenants who are not part of the Section 8 program, there are rules and regulations that participants need to comply with to avoid termination and removal from the program. HUD calls these their “Family Obligations” and by adhering to them, participants ensure continued assistance. That is to make sure that low-income families have safe and affordable housing options. You can read the full list of restrictions and rules for Section 8 tenants here.
Annual Rent Increases after a year
Landlords may be eligible to raise the rental amount each year based on the change in the local fair market rent as determined by HUD. However, landlords may not request rent adjustments in the voucher program to be effective prior to the expiration date of the initial term of the lease. Any adjustments will go into effect after a sixty-day notice is given to the family and a copy give to PMHA. To learn more about requesting a rent increase, please contact Ava Williams.
Landlord Incentives
In addition, if you are a first-time Section 8 landlord (defined as a landlord who has not rented to a tenant-based voucher participant within the past twelve months), there is a one-time incentive payment of $1,000. If you are a current Section 8 landlord, you may be eligible for a $500 incentive payment for continuing to rent your property to Section 8 tenants. Under the Moving to Work (MTW) program, PMHA may offer a one-time rent affordability payment when rent has been negotiated down for the unit to be affordable for the voucher holder. Lastly, PMHA will offer a limited damage claim, not exceeding one month’s contract rent, to the landlord where the MTW voucher participant tenancy ends and there is tenant-caused damage to the unit that exceeds the security deposit collected by the owner.
Landlord Referrals
The referral program is available to individuals and families who are not on the Section 8 Voucher program and are referred by their current landlord due to financial hardship, which have detrimentally impacted the household’s ability to pay rent. Each participating landlord will be able to submit a maximum of two referrals within a twelve-month period. Contact Mckensi Stankiewicz for more information.
BECOME A SECTION 8 LANDLORD WITH PMHA
PMHA also has quarterly landlord orientation sessions, where you can get educated on various topics such as inspections, regulations, and payment information. In addition, there are many opportunities to attend information sessions, open discussion forums, and Match Events for landlords to meet current voucher holders seeking available units and are ready to rent their units. If becoming a Section 8 Landlord sounds like something beneficial for you, please connect with Portage Metropolitan Housing Authority to set up an appointment and learn more. Good luck!