If you own rental properties in the United States, then find out if becoming a Section 8 landlord is right now and learn how to effectively manage your tenants who are part of this rent subsidy program.
Also known as the Housing Choice Voucher Program, Section 8 is a government subsidy program started in 1974 to help make housing payments more affordable for people with low income. Program participants typically pay around 30 to 40 percent of their monthly income towards the rent and the housing voucher will pay for the rest.
What are the Steps You Need to Take to Become a Section 8 Landlord?
To kick thing off, you will screen a potential section 8 tenant just like you would handle any other tenant. Do realise that you are not obligated to rent to the prospective tenant just because they are on Section 8.
Once you have decided that the tenant is suitable, you should contact the Section 8 office in your area. They must then make sure that your rental property meets their housing standard and requirements.
The outside of the building will be inspected, as well as the plumbing and heating systems. Each room will be checked for its safety, cleanliness and condition. The inspector will use a standard checklist to carry out his inspection.
The Section 8 office will also have to verify that you are renting the home for a reasonable amount comparable to similar homes in the area. The tenant's income will be evaluated to make sure he or she is able to afford your rent payments.
Once all these steps are completed, you are ready to sign the contract with the Section 8 office. You'll also need to sign a lease agreement with the tenant. After the tenant moves in, the Section 8 office will send you a check monthly for its share of the rental payment. You will be responsible for collecting the remaining amount from the tenant directly.
Your property must be re-inspected each year to stay in the program. If the property does not meet Section 8 office criteria at the time of the re-inspection, repairs must be made in the allotted time frame. Otherwise you will be dropped from program and your Section 8 payments will stop.
Other Important Things You Must Know about Being a Section 8 Landlord
As a Section 8 landlord, there are some things you can decide at your discretion, just like how you will handle any other non Section 8 tenant.
For example, you are not required to accept pets on the property, unless the pet is a service animal for a disabled person. If a Section 8 tenant fails to pay his/her portion of the rent or causes other problems, you can have the tenant evicted just like any other tenant.
However, there are some restrictions on things you can do as a Section 8 landlord. For example, you cannot rent month-to-month to a Section 8 tenant because your initial lease has to be a fixed term tenancy of 1 year.
You may also collect a security deposit, but it cannot exceed the cost of 1 month's rent. Finally you can increase the rent after 1 year, but it may not rise above what the Section 8 office considers to be fair and reasonable for properties similar to yours in the surrounding area.