Any landlord’s ears perk up when they hear about guaranteed rent payments and higher-than-market rents available via Section 8. Who wouldn’t want to make good money and have a lower risk of rent defaults?
You might have heard about the program, but wonder just how to get into it and whether it’s too good to be true. Section 8 tenants might bring some benefits, but there are risks as well. If you’re interested in becoming a Section 8 landlord, read on to learn more about what that entails and how to get started.
Understanding Section 8
The Housing Choice Voucher program or Section 8 works to help low-income tenants find affordable housing. The federal program works with more than 2 million people across the country.
The program provides rent subsidies for use in private rental housing with landlords who have been approved by the local housing authority. It’s administered at the local level, where recipients, landlords, and properties are screened and approved. The voucher funds are deposited directly from the government into the landlord’s account.
To be eligible, tenants must have an income less than 50 percent of the area’s median income.
How to Apply
Charlotte has more than 8,500 units in the Section 8 program and a waiting list of potential tenants. If you have properties in lower-income markets, you can add yours to that list by contacting the local housing authority to start the application process.
To become a landlord approved for Section 8 tenants, you need to apply for the program and have your property inspected to ensure it meets housing standards. Once you’re approved, you notify the housing authority when you have a vacancy, and they direct applicants from their waiting list to you.
How to Screen & Rent
Landlords in North Carolina aren’t required to rent to Section 8 tenants, even if the property is in the program. You can conduct your typical background checks to screen candidates based on your regular requirements.
Section 8 can open you up to higher-risk applicants, so it’s critical to ensure that you screen properly and hold all potential tenants to a reasonable standard. Becoming a landlord with Section 8 just means you might have a higher number of tenant applications that don’t meet the standard. Since the vouchers only cover a portion of the rent, you want to ensure the tenant can manage their part.
If you do select a Section 8 renter, there is extra paperwork you’ll have to submit to the housing authority to seal the deal. This might include a payments contract form, copy of your lease, and W-9 for the renter.
Is Section 8 for You?
If your portfolio is filled with great rental properties in desirable neighborhoods, Section 8 might not be the best route for you. But many properties find a good fit with the program, which can ensure your property stays rented and brings in reliable income. Understanding the good and bad of the Section 8 housing program is the first step to deciding if you should participate.
If you’re looking for more landlord advice on Section 8, contact us to discuss whether it would be a good fit for your property. Our team can help you with getting your rental accepted and managing the future tenants.
