Are you a landlord considering renting to Section 8 tenants, but feel a bit overwhelmed by the process? While Section 8 can offer many benefits, understanding the rent determination factors is crucial.
The good news is that you can find many different resources to help you learn the ins and outs of Section 8, ultimately allowing you to grow your investment for the future.
Read on to learn everything you need to know about how Section 8 does a reasonable rent evaluation.
Overview of Section 8 Housing
In 1974, the Housing and Community Act created the Section 8 Housing Program, also known as the Housing Choice Voucher Program, to assist low-income renters with vouchers to help fund a percentage of utilities and monthly rent.
The average voucher covers approximately 70% of rent, but this amount varies depending on the tenant's particular situation. Section 8 is geared toward individuals with disabilities and low-income families.
Once a person receives a voucher, they can decide on a property and ask the landlord if they agree to Section 8. Once the landlord agrees, they receive the subsidy directly from the housing authority, and the tenant pays the difference.
The vouchers apply to apartments, single-family residences, and any subsidized or unsubsidized housing projects.
Section 8 Rent Criteria
Section 8 rental criteria involve various factors, and dwellings can have very different Section 8 guidelines depending on their size and location. These criteria include:
Local Market Conditions
First, affordable housing guidelines consider local market conditions when looking at rental rates. As a landlord, you must analyze rental factors like demand, interest, market size, market saturation, and location.
Doing this research will help you understand more about rental pricing and how to price your property accordingly.
Utility Costs
Since Section 8 covers utility costs, this is also included in the rental criteria so the apartment can remain within the tenant's proposed budget allowance. Utility allowances vary depending on need, but tenants can get as little as $10 to hundreds of dollars per month.
Property Inspection
Before you can accept any renters, the property has to pass an inspection. The inspection is by the US Department of Housing and Urban Development (HUD), focusing on serious safety issues and health hazards.
Issues like mold, lead-based paint, electrical hazards, the condition of the ceilings and walls, and the presence of smoke detectors are all taken into consideration. As a landlord, you'll need to make repairs immediately.
Inspections also consider the amenities and size of your property to justify higher rental rates.
Hire a Professional Property Management Company for Your Section 8 Needs
Now that you understand more about Section 8 housing, you'll be able to expand your experience and services as a landlord.
Your next step is turning to PMI Terminus for all your property management needs. We're individually owned and operated with a mission to serve property owners in the Smyrna, GA area. We offer full-service property management that includes tenant screening, rent collection, marketing, maintenance, compliance inspections, and more.
We can help you stay on top of Section 8 legal requirements so you can start growing your investments. Make sure to contact us today to schedule a consultation!
