4 Advantages of Renting to Section 8 Tenants
Whether you are a brand new Landlord seeking tenants to occupy your very first investment property, or an experienced investor with an extensive portfolio to rent out, chances are you’ve considered renting to Section 8 tenants. The benefits of renting to Section 8 tenants can range from government-subsidized income to free advertising, making it an opportunity that is hard to pass on.
Section 8 is a government program that provides rental assistance to those that qualify. Tenants who apply for the program are required to meet certain criteria. If a tenant meets those requirements, they are granted a housing voucher from the government which allows them to seek out housing within a certain rental price range.
As Landlords, we always have concerns about renting to new tenants, and I’m sure we’ve all heard, at least once, of tenant horror stories. While there can be negatives when dealing with Section 8, also known as the Housing Choice Voucher Program, there are many advantages as well. Here are 5 reasons to consider renting to this tenant group.
4 Advantages of Section 8 Tenants:
- Consistent Rent Payment made by the Government
- Consistent Tenant Base
- Free Advertising
- Pre-Screened Tenants
Consistent Rent Payment
Renting to a Section 8 tenant provides the advantage of receiving rental payments consistently every month. Each month, whether via direct deposit or mailed check, you will receive a substantial percentage of the rent money you are owed. Perhaps this is the biggest perk of taking in Section 8 tenants. Did we mention that you will consistently receive rent on time, every time?
Chances are tenants will also pay their portion of rent on time, since they know that any violation of the terms of the lease agreement, including paying rent, could cost them their Section 8 voucher. This means that tenants are highly incentivized to pay their portion of rent on time every month.
Consistent Tenant Base
Another advantage of allowing Section 8 tenants in your property is that you open up to an untapped tenant base. The Housing Choice Voucher Program is very popular, with most urban areas having hundreds of tenants on their waiting lists. This means that you don’t have to worry about a shortage of Section 8 tenants!
As such, your property has a better chance of getting rented out quickly as it becomes marketable to a wider pool of tenants. Not only are you broadening your tenant base, but you are also opening your property up to a consistent tenant base.
The U.S. The Department of Housing and Urban Development has a website that prospective tenants can use to find qualified low-income housing.There is a master list of available Section 8 properties that you can add your property to. This way, prospective tenants can view the listing online or directly at the office as a hard-copy. This marketing method is a great way to reach out to those that may not have internet access while also targeting even more of your local Section 8 market.
Many local authorities also have their own online sites where you can also list your rental, so keep an eye out for them as well. The best part is these services are provided free of charge to both tenants and Landlords alike!
The final advantage of renting to Section 8 tenants is that they have been previously pre-screened. In order to qualify for Section 8 housing, tenants must meet certain criteria. In addition to qualifying a tenants income, the housing authority performs criminal background checks and drug testing for all household members that are 18 years or older. Public Housing Authorities will not provide vouchers to those who have been evicted due to drug-related activities within the last 3 years.
Furthermore, the Public Housing Authority provides the landlord with the following information: 1) screening that has been conducted on the tenant, 2) tenant’s current and previous addresses, and finally 3) the name and addresses of the tenants current and previous landlords.
This process provides extra protection for your property, however, you should not solely rely on this screening. Make sure that you conduct a thorough screening on all your tenants, including Section 8 tenants, and include a credit and background check. This way, tenants have to pass both your screening process as well as the process set forth by the housing authorities. Taking the time to properly screen tenant applicants can help you prevent damage to your property and costly evictions.
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Originally published at https://www.gcrealtyinc.com.