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landlord section 8

Many landlords with means automatically assume accepting Section 8 housing vouchers means a prospective tenant will inherently carry too much risk. But good tenants and bad tenants come from all walks of life. Plus, the changing economy means many tenants who may not have needed housing assistance in the past now do to keep a roof over their heads.

If you own rental property, your goal is to turn a profit. Accepting government-guaranteed housing payments can create a way to keep numbers in the black when the market turns. Here’s what all landlords need to know about Section 8 so they can make the best decision as to how to manage their investment.

What Is Section 8? 

The U.S. government instituted the Housing Choice Voucher Program, commonly known as Section 8, in 1937 to provide low-income Americans with stable housing and utilities. Given the reality of the job market, minimum wage workers cannot afford to rent a two-bedroom home anywhere in the U.S., assuming they work 40 hours per week.

Households who qualify receive vouchers to cover part or all of their rent and utility costs. If the cost of rent exceeds the voucher amount, the family pays the difference to the landlord. Local authorities administer the voucher system and determine who qualifies.

Must Landlords Accept Section 8?

Because Section 8 falls under local jurisdiction, the answer as to whether or not landlords must accept vouchers depends upon the law in their municipality. Some jurisdictions require landlords to consider Section 8 applicants using the same screening process for screening other tenants. Others permit landlords to accept the vouchers or not as a matter of individual preference.

Landlords choosing to accept Section 8 must meet inspection standards the local public housing authority sets. Residences eligible for Section 8 vouchers must maintain specific safety requirements, which is another factor that often causes landlords to think twice about accepting vouchers, even if the property qualifies.

Pros of Accepting Section 8

Renting to Section 8 tenants has one benefit above all others — because the federal government guarantees all or a substantial portion of the rent, landlords know they’ll have money coming in. Since most landlords rent to turn a profit, Section 8 alleviates the stress of worrying whether or not a tenant will pay.

Another benefit to accepting Section 8 is tenants need to sign a lease of at least one year. Because many individuals receiving Section 8 are elderly or disabled, few can afford to move. Those seeking long-term tenants benefit from accepting Section 8, as residents tend to pay faithfully month after month.

Cons of Accepting Section 8 

The downsides of accepting Section 8 tenants parallel the risks any rental situation poses. Some tenants care for the property better than others. While few landlords expect tenants to keep the property constantly ready for a photographer from “Better Homes and Gardens,” messy tenants can create long-term maintenance issues for investors.

Because the federal government guarantees payments, a local inspector will need to perform regular property inspections. These inspections can take time to schedule. During the period a landlord awaits the inspection, their property may stand empty.

Finally, landlords renting to Section 8 tenants must comply with department qualifications for what they charge. They may not raise rents above fair market value for similar properties located in the same area.

How Section 8 Can Work for Everyone

Even though financial planners recommend spending no more than 30% of income on housing, the changing economy renders this target impossible for many renters. Landlords who choose to accept Section 8 tenants can create a reliable income stream month after month. More importantly, those who need affordable housing the most will be able to keep a healthy roof over their heads.

Holly Welles is the editor behind The Estate Update, where she shares real estate tips and ideas for home fixes.

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