It’s worth investigating how to become a Section 8 landlord because the Section 8 Program is popular with various low-income families and individuals. Read the Hanfincal (hanfincal.com) article to learn the whole process.
1. What Is A Section 8 Landlord?
“Section 8” is known as The Housing Choice Voucher (HCV) Program, which is funded by the United States Department of Housing and Urban Development (HUD). It helps low-income families or vulnerable members of society, such as the disabled and elderly, who require adequate housing.
The HUD’s Section 8 program connects these people to appropriate shelters. It does not provide housing directly, but instead distributes vouchers through local Public Housing Authorities (PHAs).
This program matches them with landlords who can provide them with adequate housing. For low-income renters, these landlords are a valuable resource in the real estate market.
Housing and Urban Development provide funding to the agencies, which they use to pay private landlords directly. The program is reliant on these landlords to provide much-needed subsidized housing for very low-income people.
If you question “How do I become a Section 8 landlord?” Let’s keep reading.
2. How To Become A Section 8 Landlord?
To become a Section 8 Landlord, you can do 5 following steps below:
- Step 1: Contacting your local PHA is the best way to become a Section 8 landlord. They can explain the expectations as well as the specifics of their operation in detail. Find the contact of your PHA here.
- Step 2: You must fill out an application and provide personal information as a landlord. The housing authority will also examine your rental rates to ensure they are competitive with comparable dwellings in your area.
- Step 3: Once you have been approved as a landlord by the housing authority, an inspector will come to your rental property to ensure that it complies with all local building and safety codes. At the very least, all windows and doors must have functional locks, the structure must be sound, and the wiring and plumbing must function safely.
- Step 4: You can start accepting Section 8 housing choice vouchers once the inspector approves your property. After that, you’ll have to find your tenants and sign a separate lease agreement.
- Step 5: The housing authority will mail you a portion of the rent once a month, and the tenant will pay the remainder.
3. The Pros And Cons Of Becoming A Section 8 Landlord
3.1. The Pros Of Becoming A Section 8 Landlord
- Guaranteed payments: Rent is generally guaranteed because the PHA pays the approved voucher amount directly to the landlord. This ensures a steady income.
- Partially screened tenants: The PHA already screens applicants to ensure that they meet certain criteria.
- Low vacancy rates: Because the demand for Section 8 housing is usually greater than the supply, units tend to fill up quickly. Residents also tend to stay as tenants for a longer period of time.
- Annual rent hikes: Landlords are permitted to request a rent increase once per year.
- Good profit margins: Although it may not be applicable in all real estate markets, rent through a Section 8 voucher typically outpaces average C-class or D-class neighborhoods. When combined with regular payments, it becomes a reliable source of funds.
3.2. The Cons Of Becoming A Section 8 Landlord
- Getting rental payments rolling: Landlords in Section 8 housing do not receive the first month’s rent until the tenant has moved in.
- Local PHA bureaucracy: Landlords must adhere to their local PHA, which necessitates additional effort and communication.
- Tenant issues: Tenants may find it difficult to pay for basic necessities, such as their rent. There may also be personality differences, but this can be mitigated by screening.
- Annual inspections: Property inspections are conducted by the local PHA once a year. If one fails, the landlord may be required to make repairs, or the subsidy may be lost.
If you are looking for instructions on how to become a Section 8 landlord, Hanfincal (hanfincal.com) hopes you found the information in this article helpful. Leave comments or feedback if you have any questions.