12 Pros and Cons of Section 8 Tenants: Landlord Guide
When weighing the pros and cons of Section 8 tenants, there are a few critical factors you must consider. Section 8 real estate is often misunderstood and shrouded in mystery, so it’s time to bust the myths. We’ll get into what it’s like to be a Section 8 landlord below.
Pros and Cons of Section 8 Tenants: Main Takeaways
The pros and cons of Section 8 tenants are guaranteed government-subsidized rent, long-term tenants, free marketing, enhanced lease term enforcement, and other bonuses. On the other hand, some rules and regulations can be tricky to navigate.
Pros of Being a Section 8 Landlord
As established property managers in Northern Virginia, we know that being a Section 8 landlord comes with many benefits. Let’s uncover them below.
Government-Subsidized Payments
The biggest bonus of being a Section 8 estate is that a significant chunk of your rent money is guaranteed, unlike non-voucher rentals. You can expect to see it on time each month. It’ll arrive regularly through a direct deposit or check. To boot, the government grants you this money, so it comes from a reliable source.
This government backing can come in handy in a way that non-government-subsidized rentals cannot. Typically, when tenants face unexpected blows to their income, you’re left with one less source of reliable cash flow.
However, with housing vouchers, that isn’t the case. After all, the government will keep picking up most of the tab. They’ll even cover part of the tenant’s remaining portion of the rent. Especially in uncertain times, like pandemics or recessions, this can be vital.
Pre-Screened Tenants
Housing authorities pre-screen tenants before presenting them as options. In this process, they qualify a tenant’s income, perform criminal background checks, and undergo drug testing for all adult household members. With this, you can have an extra layer of defense against unruly tenants.
Huge Pool of Tenants
At any time, hundreds or thousands of tenants may be on any given housing voucher waiting list. On that note, if you get involved as a Section 8 landlord, you gain access to a built-in pool of tenants. As a result, you can fill vacancies much more quickly.
Tenants Tend to be Loyal
Generally, housing voucher tenants are long-term tenants. Per policy, as long as tenants qualify, the program guarantees them housing. So, they have reason to stay for as long as possible. This gives a Section 8 landlord the potential to earn consistent income throughout the years.
Less Late Rent
Program-enrolled tenants have an urgent incentive to pay their rent on time, perhaps even more so than non-voucher tenants. After all, tenants with a low income have fewer resources and choices than people with more funds do. Many times, your property is one of their best options. So, they understand the value of your rental and will prioritize paying for it.
Fewer Evictions
Every landlord dreads the drama of an eviction. Related to the above point, because Section 8 tenants need their vouchers, they will work hard to obey them. In turn, this means fewer evictions for you.
Free Marketing
The U.S. Department of Housing and Urban Development has prepared a web portal that enables enrolled tenants to find Section 8 housing. Additionally, numerous housing authorities maintain databases of local landlords who accept housing vouchers. You can access these services for free.
Enhanced Enforcement of Lease Terms
Housing Authorities can serve as another layer of lease term enforcement. If you have any issues with your tenant, like complaints or property damage, the Housing Authority can intervene. This way, you have extra safeguards in place.
Helping Your Community’s Most Vulnerable People
By being a Section 8 landlord, you can give the elderly, veterans, families, and people with disabilities in need a roof over their heads. In practice, the elderly and people with disabilities make up over half of voucher users. Also, 25% of vouchers provide shelter to low-income single-parent families.
To put it another way, you are helping some of the most vulnerable, voiceless, and underserved people in society gain shelter for survival. Needless to say, having stable housing is imperative for people’s mental and physical health.
Cons of Having Housing Voucher Tenants
As with all types of tenants, having Section 8 tenants comes with a few nuisances. Here they are:
Additional Inspections
As part of your participation, voucher officials must perform an annual property inspection. Additionally, this would be separate from the other compliance licensing inspections your local jurisdiction requires.
Usually, this isn’t a problem; however, if inspectors find maintenance issues, owners have a very short timeframe to fix them.
Potentially Lower Rental Rates
Housing programs examine the local rental rates for units like yours and offer owners a comparable market value. However, the offer may not match the owner’s desired rate. If this happens, owners can reject the offer.
Complicated Housing Programs
Each local housing program is run by different people with different policies, so experiences with them can vary. If your local program employees aren’t the best, you may want to steer clear of them.
The above issues might deter you from cashing in on an otherwise profitable opportunity. However, these bumps in the road shouldn’t stop you from widening your tenant pool.
None of these nuisances are impossible to overcome—far from it. If you use an intermediary, like Section 8 property management professionals, you can iron out these issues with minimal personal involvement.
FAQs
Take a look at some ways being a Section 8 landlord works.
Does Being a Section 8 Landlord Have Different Rules?
Tenants with housing vouchers may go through a slightly lengthier approval and property inspection process. Otherwise, in terms of Fair Housing Laws and for ease’s sake, Section 8 property management should be the same as other homes. You should treat your voucher-using tenant the same way you would treat any other tenant.
How Long Does It Take to Receive Section 8 Voucher Payments?
For the very first payment, processing will take up to 14 business days. After that, the government will give you all other payments around the 1st of each month. As for the tenant’s portion, they should pay by their due date and lease terms.
Who Sets the Rent Price?
Owners ultimately set their chosen rent price. Voucher programs will make an offer based on your property’s age, size, type, location, and local comps. If this offer doesn’t match your expectations, you don’t have to accept it.
Furthermore, if you make renewal increases, they should be similar to other local market rates.
Can Owners Turn Down Individuals with Housing Vouchers?
As a property owner, you have the right to decline any applications that don’t meet your criteria.
However, all these criteria must comply with applicable Fair Housing Laws (FHL). For instance, in some areas, a tenant’s source of income (like a voucher) counts as an FHL-protected class. So, you can’t reject tenants because they use vouchers to pay for your rent.
Furthermore, you cannot reject voucher-using tenants because of their race, gender, or other factors.
Which Kinds of Homes Are Eligible as Section 8 Real Estate?
Per governmental Housing Quality Standards, most homes qualify as reasonable living accommodations. As long as a home is safe, sanitary, and decent, it is eligible. It considers rental homes, single-family homes, apartments, and mobile homes in this deal.
Get Expert-Led Section 8 Property Management
The pros and cons of Section 8 tenants are numerous. On one hand, you get consistent rent, loyal tenants, free marketing, and other bonuses. On the other hand, some of the rules and regulations can be tricky to navigate.
However, there’s a way to get the benefits without any of the downsides. You simply have to work smarter, not harder. To do this, you can outsource your work as a Section 8 landlord to Section 8 property management experts.
As a traditional & Section 8 property management group, we can handle the troubles outlined in this article. These span all the way from rent collection to inspections, to even communications with housing authorities. Beyond that, we also take care of legal compliance, property maintenance, tenant concerns, and other everyday issues a Section 8 landlord may face. Contact us today to check your Section 8 property management woes off your list.
