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How to Become a Section 8 Housing Landlord – Requirements, Pros & Cons

By Angela Colley Date September 14, 2021

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Most landlords don’t think highly of the Section 8 housing program. Over the years, I’ve heard dozens of myths about it. Landlords see it as a hassle; they think the housing authority will breathe down their neck, or they believe they’ll get awful tenants. The truth of the matter is that the Section 8 program can work wonders for some landlords. The housing authority is not that difficult to work with, the properties rent faster, and the tenants are not much different from others. However, with that said, how well it will work for you largely depends on how you run your business. For example, large property management companies can easily handle the extra work that accompanies Section 8, while private landlords may not have the time to invest in the program. Landlords should thoroughly measure Section 8 pros and cons so as not to miss out on a potential source of rental revenue.

How Section 8 Works for Landlords

The Section 8 process is fairly straightforward. In order to operate a Section 8 rental, the local housing authority must approve both the landlord and the property itself. Different housing authorities may have their own requirements, but typically any landlord can use the Section 8 program, including private owners and property managers.
Motley Fool Stock Advisor recommendations have an average return of 397%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now As a landlord, you will need to complete an application and provide personal information. The housing authority will also review your rental rates to ensure that they fall in line with rates for comparable dwellings in your area. One major drawback is if the housing authority feels you are overcharging for your rental, you may be required to lower your rates.Once the housing authority approves you as a landlord, an inspector will visit your rental property (if you still need to purchase a property, look into Roofstock) to make sure it meets all local building and safety codes. The inspection process is a lengthy one. At the very least, you must have working locks on every window and door, the structure must be sound, and the wiring and plumbing must work safely. Depending on the area, you may need to install heating or cooling appliances, such as central air or radiant gas heaters. Some local codes may also require that you install handrails or safety ramps outside the property.Once the inspector approves your property, you can begin accepting Section 8 housing choice vouchers. At that point, you find your own tenants and complete a separate lease agreement with them.Then, once a month, the housing authority will mail you a portion of the rent and the tenant will pay you the rest.

Pros to Section 8 Housing

The Section 8 program has several advantages. Many landlords think the better aspects of the program outweigh the bad, but it is up to you to decide. Guaranteed Rent. One of the biggest problems landlords face is getting the rent on time every month. With Section 8, you will always get the majority of the rent on time, every time. Typically, Section 8 tenants pay their portion on time as well. Since failure to live up to the lease can cost them their housing voucher, Section 8 tenants can be even more reliable than private tenants.Pre-Screened Tenants. The housing authority reviews every case before approving a Section 8 housing voucher. Mostly, the housing authority is looking at income levels, but many housing authorities will turn down tenants with past criminal problems. This screening process may provide extra protection for your rental, and chances are that if the tenant passes both your tenant screening process and the housing authority’s, you won’t have any problems.Wider Access. Section 8 is a popular program and most urban areas have hundreds of tenants on a wait list. By accepting Section 8, your property becomes marketable to a wider pool of tenants which gives you a better chance of getting it rented.Free Advertising. The U.S. Department of Housing and Urban Development offers a website that tenants can use to find low-income housing. Several local housing authorities also maintain a website or a separate list of Section 8 landlords in their area. Both of these services are provided free of charge to tenants and landlords.

Cons to Section 8 Housing

Routine Inspections. To get into the Section 8 Housing Choice Voucher Program, your property will need to pass a safety inspection and possible routine inspections depending on the area that you live in.Rent Control. The housing authority will not tell you what to charge for your house or apartment, but you will need to keep your rent within the median for your area. If you have an extremely well done or nice rental in a bad area, you may lose out on rent you could have otherwise charged outside of the Section 8 program.Potential for Difficult Tenants. Many landlords are wary of Section 8 tenants. Since these tenants are not paying much for the rental, they have less incentive to keep the property in great shape. Moreover, Section 8 can attract low-quality tenants that give you trouble. With that said, if you do your homework and keep an eye on the property, there is no reason you can’t find a great tenant and enjoy the experience.No Decrease in Workload for Landlord. Despite the belief by many that the Section 8 housing authority will assist landlords throughout the rental process, you will still need to screen the tenant, create a lease, and police your rental just like you would with a private tenant. While you can report the tenants to the housing authority if they commit a major lease violation, the day-to-day responsibilities still belong to you. Moreover, the housing authority will not help with finding tenants, making repairs, collecting rent, or keeping the property safe.

Final Word

The Section 8 program has its benefits. You get free advertising, a range of potential tenants to choose from, and guaranteed rent every month. But you’ll have to do extra work for these privileges. Many landlords hop on the Section 8 bandwagon and love every minute of it, while others wouldn’t touch the program if you paid them to. Deciding on whether to accept housing vouchers is really a matter of where your rental is, how popular it is, and your willingness to deal with the process and paperwork. For example, if you rent in a popular urban area with a high percentage of low to median income renters and don’t mind the extra work, then the Section 8 program may be the best thing for you. But if you rent in a suburban area with few low-income residents and really do not want the added stress, you’re probably better off leaving the program to someone else. As a landlord, what experiences have you had with Section 8 in the past? Have you had any trouble with the housing authority or your tenants? Real Estate TwitterFacebookPinterestLinkedInEmail

Angela Colley

Angela Colley is a freelance writer living in New Orleans, Louisiana with a background in mortgage and real estate. Her interests include animal rights advocacy, green living, mob movies and finding the best deal on everything. She blames her extreme passion for never paying full price on two parents that taught her that a penny saved is two pennies if invested wisely.

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