If you are a landlord or property manager in the United States, then learning about section 8 rentals is crucial for expanding your possible pool of tenants. Find out what the section 8 program is all about and whether you will benefit from joining it.
So What Exactly is the Section 8 Program?
The section 8 program is basically a government aid scheme which is set up to help people with lower income with their rental bills.
The government will be paying a sizable portion of their monthly rent by giving section 8 tenants housing vouchers. These vouchers will usually pay for 60% to 70% of the monthly rent while the tenant will have to fork out money for the rest. That's why the section 8 program is also known as the housing choice voucher program.
When you apply to join the section 8 program as a landlord, the section 8 agency will send a home inspector over to make sure that your rental property meets their health and safety codes.
As a section 8 landlord, you cannot freely set your rent - The government will decide what is the fair market rate for your rental property.
What are the Benefits of Being a Section 8 Landlord?
One big benefit of joining the section 8 program is that you will expose your rental property to a larger pool of low wage tenants. If your rental property generally appeals to people with less disposable income, joining the section 8 program will help you find a suitable tenant more quickly and easily.
Another attractive point of being a section 8 landlord is that a good part of your rent will be taken care of by the government. No matter what happens you will have more than half of your rent firmly in hand.
Even if your tenant does not pay you his rent, you can still claim your loss of rent from the government after evicting him. If your tenant caused damage to your property, the government will also foot the repair bills for you.
As you see, having section 8 rentals is an effective way to reduce your risk of financial loss from non payment of rent.
What are the Drawbacks for Having Section 8 Rentals?
All section 8 rentals have to be signed for 1 year. You are not allowed to have a week to week or month to month tenancy with your renters. If you plan to sell your rental property in the near future or you don't want to tie yourself down with a long term lease, then the section 8 program is not right for you.
As I have already mentioned, your rental property has to pass the section 8 home inspections before you are allowed to accept tenants from the program. The problem is that the section 8 health and safety standards are stricter in some areas and you may have to spend more money on property maintenance.
Another unpopular rule of the section 8 program is not you are not allowed to set your own rents. The section 8 agency will decide on what is the market value of your rental property. This restriction will usually lower the amount of your rent you can collect.
Author Resource:-
Teo Zhenjie has been showing landlords how to manage their tenants and rental properties effectively on Propertydo http://www.propertydo.com/ - To learn more important tips on Section 8 rentals, visit his website today for step-by-step real estate guides, free resources and forms.
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