PHILADELPHIA - Section 8 real estate has its pros and cons. Section 8 tenants may not be the best tenants for your property, but you are not liable for any damages they may cause. In addition, Section 8 tenants are vetted. If you do not want to deal with these tenants, you should consider other types of investments.
Housing quality standards
Section 8 housing is required to meet the federal, state and city Housing Quality Standards (HQS). These standards are designed to protect the health and safety of tenants living in public housing. They cover a variety of areas including plumbing, electrical and security systems. HUD also requires that every unit meet certain minimum standards for interior and exterior elements. These standards are monitored annually and must be met before assistance is given to the tenant. The goal of these standards is to make landlords and inspectors' jobs easier.
Public Housing Agency inspectors are required to inspect housing units that accept Section 8 Housing Choice Vouchers. They are also required to do regular inspections to verify that the units meet the HQS. In some cases, landlords may request that SDHC pre-inspect a unit, which will reduce the time between leasing and completing the required inspection.
Section 8 housing quality standards are important to a successful application process. The housing unit must meet all of HUD's quality standards in order to qualify for HAP. Owners must also meet these standards by agreeing to adhere to all regulations regarding the program. This may involve signing an agreement with the HUD.
Cost of renting to Section 8 tenants
Before investing in Section 8 real estate, you should understand how to calculate the cost of renting to Section 8 tenants. HUD determines the Fair Market Rent (FMR) for a particular area. This figure varies by zip code, so if the neighborhood is higher-income, the rent will likely be higher than if the community is lower-income.
Once you have gathered the information necessary to rent to Section 8 tenants, you can submit the application to your local housing authority. The specifics of the application process vary from state to state, but you will be required to fill out a form with your personal information and the rental rates you wish to charge. Once you have submitted the application, the housing authority will review your application and determine if the rents you have listed are reasonable. If not, they may ask you to lower your prices.
Section 8 tenants typically pay 30 percent of their income toward rent. The government pays the other 70%, making the rent total $720. A landlord should expect to receive a consistent payment each month, but this can take time. If you are unable to receive a steady payment, you may want to reconsider your investment in Section 8 real estate.
Rent limits
Section 8 real estate is an affordable housing program that helps low-income families afford the housing they need. It provides homes to people with limited resources, and is available in a variety of housing types. Rent limits are calculated based on household size. HUD and New York State use the general rule of one-half person per bedroom, but the occupancy requirements for individual municipalities may be different. Some low-income housing is only suitable for one person.
To qualify for Section 8 real estate, landlords must follow a strict set of guidelines and maintain the property to meet HUD standards. Owners must also provide services that are agreed upon in the Section 8 real estate lease with the PHA. Once a Section 8 real estate property is approved, it must be marketed to tenants in the area. Section 8 landlords must notify the public housing authority (PHA) of the availability of the property, and the PHA will check the rent limits to determine if they are reasonable. If the rent is too high, the PHA may require the landlord to pay more money for the property.
For landlords, it can be difficult to find Section 8 tenants. There are rules for evicting tenants who have a housing voucher, but they are more difficult to enforce than for other types of tenants. The Department of Housing and Urban Development publishes a 29-page guide that details the eviction procedure for Section 8 tenants. Another issue to consider is crime. Some academic research has shown that housing voucher recipients are associated with an increase in violent crime. Other studies, however, show that voucher recipients are not the cause of crime. In any case, landlords need to be sure to provide decent and safe housing to tenants with housing vouchers.
Negative reputation of Section 8 tenants
While Section 8 is an excellent program for low-income tenants, it does have some drawbacks for landlords who want to maximize the value of their properties. For starters, Section 8 tenants typically aren't able to increase their rent. Instead, landlords are required to charge them government-approved rent. As a result, many landlords opt to avoid accepting Section 8 tenants.
A common misconception about Section 8 tenants is that they are dirty, disrespectful, and dangerous. While this isn't true in all cases, it can scare off prospective tenants. As a landlord, it is imperative to screen tenants carefully and maintain the property in pristine condition to avoid these pitfalls.
Accepting Section 8 tenants opens a whole new market of potential tenants. Since many Section 8 tenants cannot afford to pay unsubsidized rent, allowing them to rent your property may give you a competitive edge over other landlords. In addition, Section 8 tenants can be screened just like any other tenant.
