If for some reason you have not encountered the idea of Seciton 8 before here is a brief explanation of it. Housing Assistance is typically the more legal term for the program in which some form of government, typically county or city, offers assistance to low-income tenants to help them pay rent. The amounts vary greatly and can depend on the circumstances of the applicant and on the financial standing of the government body. But one thing is consistent, tenants must apply and provide substantial documentation in order to get accepted into the program. Also most programs have so many applicants that there are substantial waiting lists meaning that some may wait years to get accepted into the program.
So the facts of the program are one of the main reasons we recommend Section 8 in most cases…in fact the only situation where we would not recommend accepting Section 8 is if your property is considered a luxury property where the cost of rent is substantially above the normal market rent. Since section 8 will only pay an amount that is close to or equal to standard market rent for a property of similar size, if your property is substantially above that then it will not get approved because the tenant would have to pay the difference. And if the tenant has money to pay the different then they would no get accepted to Section 8 anyways.
So now that the exception is out of the way here are our reasons why you should accept Section 8 in most other circumstances.
Guaranteed Payments
The government will cut you a check every month and will typically do it through direct deposit. So you don’t have to worry about one of the hardest things about being a landlord…collecting rent. Now the government will typically pay anywhere from 80%-100% of the rent you would normally charge. If it is 100% you are all set but if you would charge more than the market standard then your tenants will have to make up the difference and this is the only time you may have issues collecting. However, the government must agree to the amount you want above what they will pay and the tenant must agree to pay it, so if they don’t then they can risk losing their Section 8 status, so in most cases you shouldn’t have an issue collecting the extra amount.
Usually Responsible Tenants
Because of the fact that it is so hard to get into most Section 8 programs most tenants will go above and beyond in order to keep their Section 8 status. So in addition to paying on time they will typically upkeep the property and make sure to be responsive to any of your requests to make sure they keep their status. The maintenance of the property that you don’t cover, such as keeping it clean, goes into our next reason.
Regular Inspections of the Property
The government will require regular inspections, either quarterly or at least semi-annually to make sure the tenant is being responsible, not doing anything illegal and of course that the property is being kept in good condition by the landlord. This could be a reason not to accept Section 8 if you do not like to keep your property in good condition but as our philosophy is to run a real estate investment like a business it would not make much sense to leave it in disrepair, for that just sell the property and don’t deal with the headaches that come with running a business that makes a great profit.
Background Checks
Again because Section 8 is a government program the tenants are thoroughly screened so that you know in advance you are getting someone that is of high moral standing.
Supporting Your Community
Although this may not rank highly in terms of capitalism and profit, if you are planning on making your home in your community and investing in other properties it is generally a good idea to make sure that those members of your community who are economically or physical disadvantages be given the support they need to improve themselves and contribute to the overall well being of the city or county.
Other Reasons Not to Accept Section 8
There are only 2 other good reasons to not accept Section 8…One is that you cannot stand dealing with the government and all their paperwork. While this is a matter of personal preference we would have to tell you that the amount of paperwork is only slightly higher than you would normally deal with. The second reason is that you disagree philosophically with having taxpayer dollars going to support anyone’s rent payments. And while again you are free to believe it the truth is that these programs have been around for a long time and are not going anywhere any time soon. So if you want to take a stand for your ideals then that is your right but you are missing out on a valuable revenue stream.
If you have any questions that we have not covered here please feel free to contact us at 305-517-3900, and by the way, we handle Section 8 properties all the time and can handle all the paperwork for you!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
