If you’re trying to decide whether or not to rent your property Section 8 tenants, you’ve probably heard a lot of positive and negative information about the program and its requirements. Section 8 rentals are not for everyone, but make sure you understand what’s at stake and what’s required before you decide either way.
Let’s take a look at the major pros and cons of renting a Section 8 property or making your property available to Section 8 tenants.
Section 8: Pros
The most important advantage, of course, is that you’re providing a service to the Oakland community. Section 8 properties are in high demand and the waitlist is long. When you rent to Section 8 tenants, you’re helping people who need affordable housing, and that’s something to feel good about.
Another benefit to this type of housing is that you can count on the rental payments you’re receiving from the federal government. Most of the funds you receive will be paid consistently every month – usually by direct deposit. The tenants will also be more likely to pay their part of the rent on time because if they don’t; they risk losing their voucher.
You’re also getting a reliable pool of tenants who have been screened already. The housing authority will perform background checks and verify income. You won’t have to worry about long vacancies because tenants will always be looking for well-maintained properties for which they qualify. You’ll basically get free marketing for your property because it will show up on HUD’s website and the housing authority’s site in Oakland.
Section 8: Cons
The main drawback to Section 8 rentals is that you have little to no control over what you’re able to charge in rent. HUD will calculate fair market rental standards, and your property will have to meet them. You’ll also need to be prepared to rent out property in areas that are generally low-income. This does not always mean there’s an increase in crime and safety issues, but it can be a factor. You might also have trouble renting the same property to non-Section 8 tenants if you ever decide to drop out of the program in the future.
Another concern that needs planning is that HUD pays for rent, but they don’t pay security deposits. So, if you expect to collect a security deposit, you’ll need to collect it directly from the tenant. You know your tenant pool is going to have some financial limitations, so finding someone who has the cash to provide a security deposit might prove to be a challenge.
You’re going to have to make your property available for annual inspections. The housing authority has a specific 13-point checklist and they will be thorough when they inspect your property the first time and when they return annually for re-inspections. If there is anything perceived to be a hazard, you’ll fail the inspection, which will require you to fix the problem right away and have the home inspected again.
Deciding whether to participate in Section 8 can be a difficult decision, but we’re here to walk you through it. For help and advice on Oakland property management, contact us at Vision Property Management.