Section 8 is a federal program managed by local public housing agencies (PHAs). It was institutionalized in 1974 and is officially the HUD’s “housing choice voucher” program. Those eligible under the program (e.g. disabled, elderly, low-income families) can choose a rental unit that their voucher can pay for up to 70% of the rent including the bills. The tenant pays the rest.
Getting Section 8 rental investments can be very beneficial. There are many advantages to the program that other non-Section 8 rental properties don’t have.
A clear benefit of Section 8 is the timely and regular payments from the government. Through the program, monthly payments are received from the HUD. The government pays out at least 50% of the tenant’s rent depending on their income and expected utility costs.
Protection from Non-Payment
Under typical tenancy settings, non-payment of rent is a common issue that could end up to eviction at the most. In Section 8 rentals, since the HUD will pay the rent, any non-payment from the tenant due to personal hardships or unemployment are secured.
Competitive Rental Rates
The rent you may get from your Section 8 tenant is better than a comparable rental property. Monthly rents under the program are charged competitively, normally at the higher end of the current market price range. This is due to the difficulty of Section 8 voucher holders to find a potential unit.
Wide Tenant Pool
Section 8 offers a great supply of potential tenants easing the search efforts of property owners. There are some websites that keep a waiting list of verified tenants under the program. They also keep a listing for owners to advertise their properties.
The average rental unit encounters typical dry spells or when the property is left vacant for a long time. Under Section 8, units are often rented out for long periods as tenants get an obvious incentive to stay longer.
Section 8 rentals are very beneficial, as they’re federally guaranteed. Common rental issues that hound non-Section 8 rental properties are avoided, hence, ensuring the investor or property owner sustained profitability.