Section 8 tenants have negative stigmas associated with them. Investors fear that Section 8 tenants will be destructive and lead to costly property repairs. Another concern is getting less than the market rate for rental units, reducing income, or that collecting rent will be problematic. However in the vast majority of cases the potential downsides of renting to Section 8 tenants are greatly outweighed by the benefits.
The past few years, many landlords have had significant impacts on their rental incomes due to the COVID-19 pandemic. But for landlords renting to Section 8 tenants, the government is paying the majority of the rent. The tenants themselves are typically responsible for an amount equivalent to 30% of their income, in most cases just a few hundred dollars. The portion paid by the government is sent directly to the property owner at the beginning of every month, ensuring timely payment of the majority of rents without spending time on collection.
Another benefit of renting to Section 8 tenants is the involvement of case workers. Most Section 8 tenants have a caseworker who advocates on behalf of both the tenants and the landlords. They act as a bridge between both parties and help to resolve problems in a proactive manner which can prevent the types of landlord/tenant conflict that can occur in private rentals.
Most Section 8 tenants who secure housing through these programs were on waitlists for many years (in some cases as long as 7 years) before they get their vouchers. This makes them highly motivated to maintain positive relations with their landlords and avoid any actions which could result in the loss of their housing voucher. Additionally, the average Section 8 tenant stays in a rental unit for 11.5 years, as compared to approximately 2 years for tenants in private rentals. So, while monthly rental income is reduced somewhat by working with Section 8 tenants, consider how much greater the loss of income is from vacancies.
Section 8 (and other government program) including lease back “sell my house fast Long Island” tenants are worthy of your consideration as a real estate investor. Get in touch with local agencies which frequently hold forums for landlords to explain the programs and specifics such as pricing and how to meet the requirements for becoming Section 8-approved.