Tenant Troubles? The Pros And Cons Of Becoming A Section 8 Landlord

In the competitive rental property sector, landlords are constantly on the lookout for new markets to tap into. In this article, we’ll take a look at everything you need to know about becoming a Section 8 landlord.


What Is Section 8?

The Section 8 Housing Program covers a range of schemes set up by the Department of Housing and Urban Development to enable low-income families, elderly citizens and those with disabilities access subsidized housing. The most common scheme, one that has become synonymous with Section 8, is the housing choice voucher program.

Under this voucher program, participants can have between 30% and 100% of their housing costs paid by the local housing authority. The amount, dependent on the participants’ income eligibility and local market rents, is paid directly to the landlord.

The Pros Of Taking Section 8 Tenants

  • A steady stream of income. Because rents are paid by the local housing authority under Section 8, landlords working with these tenants will receive a guaranteed income stream. Local housing authorities are regular and reliable – no more chasing up tenants for late checks.
  • Long term tenancy. Section 8 tenants tend to long term tenancy because of the added layers of bureaucracy related to the housing voucher program. Further, because demand for Section 8 housing outrstrips supply in most areas, when you do have a vacancy it’s likely to be filled fast.
  • Prescreening. Whilst working with Section 8 tenants doesn’t entirely remove the necessity for screening your tenants, the local housing association will do some of the work for you. “Income verification, background checks and drug testing are all managed by the housing authority to determine eligibility, so you can have additional peace of mind,” says Ian Karson, a real estate writer at Assignment Help and Simple Grad.

Things To Consider

Section 8 tenants are a great opportunity for profitability, but there are some drawbacks. Working with the local housing authority will impose maximum rents and minimum standards for your property, effectively capping the rent you can receive whilst giving you hoops to jump through.

  • Rent caps. The Department of Housing and Urban Development will determine the maximum rent you can charge based on ‘fair’ local markets. At times, these fair rents can fall below what market rates would enable you to charge on the open rental market.
  • Annual inspections. Local housing authorities will conduct yearly property inspections to ensure your properties are up to the locally determined standards.
  • Challenging tenants. Many landlords shy away from Section 8 tenants due to assumptions about those who are included in the scheme. Whilst the local authority will be paying part of the rent, often the tenant will be responsible for the remainder creating challenges for landlords when these tenants cannot pay.

Tenant Disputes

Tenant Screening And Fair Housing

When landlords are considering Section 8, it is the tenants themselves that often create a pause for thought. How challenging are the tenants you’re likely to receive under section 8 – and can you do anything to screen them?

First of all, the Fair Housing Act limits landlords ability to discriminate amongst their tenants for certain reserved criteria, including disability and family status. “Whilst the Fair Housing Act doesn’t specifically restrict landlords from discriminating based on Section 8, some local laws might so it’s important to consider those imposed by your own local authority,” explains Adam Jolson, a writer at Essay roo and Boomessays.

Local laws excepted, landlords considering Section 8 tenants will need a robust screening process to limit complications involved in these tenancies. Don’t rely solely on the screening process provided by the local authority – a thorough review of tenant applications and independent background checks will ensure success as a landlord, and understanding the criteria by which you can and cannot reject an application is equally vital.

How To Become A Section 8 Landlord

If becoming a Section 8 landlord sounds right for you and your properties, you can apply to the local housing authority. In the application include your proposed rates of rent as well as additional utilities. Address the local standards for Section 8 housing within your properties – usually defined by the criteria of sanitary, safe and decent.

Wrapping Up

Understanding local laws is vital for finding the right tenants for your property whether you’re pursuing Section 8 tenants or not. Section 8 can, in the right circumstances, offer a strong income for your rental properties.

As a landlord, you’re used to keeping your properties up to the appropriate standard and screening tenants – applying these skills to Section 8 can provide a great reward for a little extra work.