Should You Become A Section 8 Landlord?

June 21, 2019 by Jorge Lopez

 Hands of family together holding house in green park
Section 8 housing is a federal program administered at the local level and is key to providing affordable housing to low income Americans. For those who qualify, this program can be life-changing, providing a stable home environment, giving children a safe place to grow up, and even helping them access a higher quality education. In order for Section 8 to function, though, landlords have to sign up qualifying properties for the program and accept vouchers from tenants – and this is where problems arise.

Today, there is a shortage of Section 8 apartments available, and many landlords discriminate against voucher holders; Houston landlords, like those in many states, cannot be punished for refusing Section 8 vouchers. However, despite rampant discrimination, some landlords seriously consider accepting Section 8 vouchers, and it’s often a mutually beneficial relationship.

If you’re considering becoming a Section 8 landlord, here’s what you should consider.

Tenants Face A High Bar

One of the main reasons that landlords are hesitant to join the Section 8 program is that they worry that they will get bad tenants and ultimately have to evict them. In many cases, though, what landlords characterize as a “bad tenant” is really cultural misunderstandings. Tenants in the Section 8 program often come from unstable housing situations where rule enforcement is lax and where they may not have formal leases. If you encounter trouble with your tenants, it’s important to try to understand their perspective. You’ll likely find that they were intentionally causing trouble, but were acting in ways that would have been acceptable in their last housing situation.

In addition to the fact that Section 8 tenants are often reliable and can learn to be good tenants, it’s important to recognize that they’re actually pre-screened and have to pass a high bar to qualify for the program. Not only does Section 8 screen for income, but tenants cannot have been evicted within the last three years for drug-related activity and, depending on the crime, many prior felons are disqualified. Anyone with a lifetime registration as a sex offender, for example, is permanently disqualified from Section 8, and other felony convictions must be at least five years in the past.

There’s A Wide Market

Rental markets rise and fall, but one thing that’s true about the Section 8 program is that there is a huge pool of potential tenants. Because the number of landlords for the program and available apartments is much smaller than the number of applicants in need, you’ll be able to fill vacancies almost immediately. Your property will also receive free advertising through the local housing authority, so you’ll be inundated with applications as soon as your listing goes live.

Steady Payment Process

The goal of Section 8 is to ensure that tenants with a low income level are able to afford housing, which means that they’re only responsible for a small portion of the rent. The rest comes from the government through the voucher system and if tenants lose their jobs or face a wage cut, the government will increase their share of the rent.

Not only does the government provide consistent rent to Section 8 landlords, tenants are especially timely about their payments. That’s because if tenants don’t pay their share of the rent on time, they can lose their Section 8 voucher. In this regard, these tenants may actually be more reliable than tenants who pay the full rent.

One thing you should be aware of is the fact that Section 8 does not pay security deposits, unlike private tenants, so you won’t have that added insurance if there is damage to the property. In most cases, though, this isn’t a serious problem. Many people think that Section 8 tenants are more likely to damage a property because they have less of a financial investment in it or because they are simply less responsible, but the opposite is true. Section 8 tenants often have to wait years to find housing through the program, and they are grateful to have an affordable place to live.

Increased Inspections

Depending on your current inspection schedule, you may be subject to an increased number of inspections by joining the program. That being said, experienced landlords say that anyone who views these inspections as a problem likely isn’t maintaining their apartments well enough. If you’re maintaining the vents, checking the smoke alarm, and performing other regular maintenance activities, then you’ll be more than ready for any official inspections.

Not only are official inspections more than reasonable, if they make you a more attentive landlord, then they’ll also likely save you from facing more expensive repairs. What could turn into a big leak or a large mold patch is caught before the damage gets out of hand.

It’s Easy To Join

Overall, it’s simple to become a Section 8 landlord. Since your property most likely already meet the required health and safety standards, all you have to do is fill out the appropriate paperwork. After that, your status will undergo an annual review to remain a member of the program. Your local branch of Section 8 will also assess your fees and determine whether you’re able to raise rents on an annual basis. Rents for Section 8 units are based on comparable units in your area, which means you may receive less than is normal for your neighborhood; all rents are on par with the city or state as a whole, however.

While landlords are responsible for signing their property up for Section 8, you don’t have to handle the subsequent concerns alone. Once you’re signed up, your property management team can help you negotiate your tenants’ needs, handle inspections, and provide additional screening. They can also address conflict between tenants and ensure that everyone is getting along properly.

At Green Residential, we know the Houston community intimately, and we recognize that all members of our city can make great tenants. Contact us today to learn more about how we can help with your property management needs, provide tenant screening support, and handle ongoing inspection and maintenance. You’ve made a space where everyone can make a home – let us help you keep it running.

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