Let’s say you have an empty property that you want to rent out and you want to bring in some extra income. Or you have a prospective tenant with a housing choice voucher and you’re wondering whether you have to jump through a million hoops to rent out your property to them.
Either of these scenarios may have led you here in your search of more information on the ins and outs of becoming a section 8 landlord.
Opening up your rentals to voucher holders can be an incredible way to contribute positively to your community by providing safe and affordable housing to those in need, and it’s surprisingly not that different from renting out to regular tenants.
Keep reading to see how being a section 8 landlord works, and why you may want to consider it.
What is Section 8/Housing Choice Vouchers?
In your search or in conversations about this topic, you may have heard both the terms “housing choice vouchers” and “section 8” floating around. It can be a little confusing, but essentially, they’re the same thing. Section 8 is simply the former name of the housing choice voucher program. While official documents will no longer refer to the program as section 8, many voucher holders and others in the community may still refer to it as such.
In short, housing choice vouchers/section 8 are an effective government solution to help low-income families secure safe and affordable housing.
When a household qualifies and is approved for a voucher, the program covers a percentage of their rent for eligible housing from the public market. Usually, they pay around 30% of their income directly to their landlord, while the voucher administrator pays the remainder directly to the landlord.
Why Should I Become a Section 8 Landlord?
There has never been a greater need for affordable housing, with homelessness hitting an all-time high in the United States in 2023. Housing choice vouchers are one of the most important strategies in combatting this rise, and landlords are a critical piece of the puzzle.
This program gives low-income families a great opportunity to exercise some independence in securing housing on the public market, as opposed to public housing or shelters. So most importantly, you should open up your properties to housing choice voucher holders to help provide an important public service to people in need.
But of course, many people rely on their properties to offset costs and provide additional streams of income. So there are several other direct benefits to you as a section 8 landlord as well.
Incentives
Although it can vary from jurisdiction to jurisdiction, there are often financial incentives that landlords can take advantage of.
For example, in Los Angeles, there’s a one-time signing bonus of $2,500 for each unit leased for up to $5,000 or 3 months’ rent, whichever is less. You also get a one-time reimbursement for inspection repairs.
Reliable, on-time payments
With other tenants, you may have to worry about late payments, but with voucher renters, you can ensure that you will always get at least 70% of the rent payment every single month, since it’s covered by the voucher.
This also protects you against a renter’s loss of income.
Low vacancy rates
It’s much easier for section 8 landlords to fill their empty units quicker to the need for these affordable housing options. On top of being able to find tenants faster, voucher holders also tend to move less, giving you a reliable, long-term tenant instead of having to constantly find new ones.
Tenant screening
Although you can still choose to screen tenants yourself prior to moving in, all voucher holders are pre-screened in the process of applying for the vouchers. This includes verified income, background checks, and drug testing. So, you can feel assured that you have a great pool of pre-vetted tenants to choose from.
How Section 8 or Housing Choice Vouchers Work for Landlords
The Section 8 program allows landlords to rent properties to eligible low-income tenants at market rates, with a portion of the rent paid directly to the landlord by the local Public Housing Agency (PHA) on behalf of the tenant.
To participate, landlords must ensure their rental units meet the Housing Quality Standards (HQS) set by the U.S. Department of Housing and Urban Development (HUD) and undergo annual inspections to maintain compliance.
Other than the maintenance requirements, the limits on Fair Market Rent in your area (which tends to be relatively high), and where you get 70% of your rent from, the monthly leasing experience doesn’t feel too different from leasing to a non-voucher holder.
Many people hear section 8 and get scared. But realistically, given the several benefits it presents and the minimal downsides, it ends up being a much easier and more lucrative experience for landlords.
Eligibility and Requirements for Landlords
Before you can start renting to voucher holders, your rental unit needs to meet Housing Quality Standards (HQS) set by HUD (The US. Department of Housing and Urban Development). These are in place to make sure that voucher holders have a home that is safe, healthy, and comfortable.
In short, the goal is to make sure that those in need of affordable housing are not sacrificing safety and comfort because of affordability.
The requirements include the following criteria:
Safety and Health Compliance
Your rental unit must be free from hazards such as lead-based paint, faulty wiring, and inadequate sanitation facilities. You also need a reliable water supply, safe electrical systems, and proper emergency exits.
Amenities and Comfort
Your unit must provide enough living space, as determined by the number of people you’re leasing to, i.e. a studio apartment isn’t suited to a 5-person family due to a lack of space. When it’s applicable, you must also have functional heating and cooling systems.
Generally, your unit should be in good condition overall to pass inspections.
Inspection Readiness
Before a lease can begin, and at least annually after that, the unit will be inspected by the local Public Housing Agency (PHA) to ensure it meets the HQS. As a landlord, you should conduct your own inspections beforehand and on somewhat of a continuous basis to make sure that you’re in compliance.
Month-to-Month Responsibilities
As we mentioned, the month-to-month responsibilities of a section 8 landlord vary only slightly from the responsibilities of a regular landlord.
Rent Collection
The great thing here is that around 70% of your rent collection is automated. As determined in your rent agreement, the PHA (public housing authority) automatically sends over the pre-determined amount every month. So no monthly invoices are required.
For the remainder of the rent, you collect it just like you would with other tenants. Simply set a due date and determine the approved method(s) of payments that your tenant can pay through.
Maintenance and Repairs
To remain compliant with the standards required to be a section 8 landlord, you’ll want to stay on top of any maintenance requests and even perform inspections with some regularity. Failure to do this could lead to a suspension of subsidy payments from the PHA until any repairs are made, or even exclusion from the housing choice vouchers program.
Year-to-Year Responsibilities
You will also have a small amount of yearly responsibilities to remain a section 8 landlord.
Lease Renewal
This renewal process is just slightly more complex than in a regular tenant-landlord relationship. In addition to discussing lease renewal and possible rent adjustments with your tenant, you’ll also need to talk to the PHA in charge of managing their voucher. Any changes to the lease, especially rental price changes to reflect current market rates, must be run by the PHA to ensure that it’s in line with HUD’s fair market standards.
As we mentioned earlier, voucher recipients tend to be reliable, long-term tenants, so although you must take a few extra steps, the high renewal rate typically makes it worth it.
Annual inspections
Annual inspections should be a breeze if you’re keeping up with repairs, but you can expect a representative from the PHA to come out at least yearly to conduct regular inspections. If you are found to not be in compliance with the HQS (Housing Quality Standards), you may be required to make upgrades to your property.
Relationship Management
Much like with any other tenant, good communication with your tenant, as well as the PHA, is important to build positive long-term relationships and shape your good reputation as a section 8 landlord.
Part of this ongoing communication may also include staying up to date on any policy changes to section 8 or local regulations affecting rental properties.
How to Become a Section 8 Landlord
The good news is opening up your properties up to housing choice vouchers holders requires no formal application. The first step is simply deciding to do it.
This is also not an all-in decision; you’re not required to reserve your property to be available only to section 8 tenants. You may have a non-voucher tenant after your voucher tenant moves out. This is simply a willingness to accept vouchers.
You could, however, decide that you do in fact only want to provide housing to section 8 tenants, if that’s what you desire.
Getting started
While there is no formal application process, you’ll just want to make sure your property is up to code before you move forward with the leasing process to avoid any delays.
If a voucher holder expresses interest in your property, there are just a few steps you need to take:
- Verify their voucher is current
- All families are pre-screened but you can do your own screening if you’d like to see if they’re a good fit for your property
- If it’s all good, submit a Request for Tenancy Approval packet to the local PHA
- Rent negotiations with PHA and schedule a Housing Quality Standards inspection
- Sign all necessary paperwork
Finding Section 8 Tenants
Although you do have the option to open up your property to all kinds of tenants, many landlords want to specifically seek out section 8 tenants due to the variety of benefits.
While there’s no single marketplace for section 8 housing listings, there are a few strategies you can use.
The first is to build positive relationships with section 8/housing choice voucher case workers, which you can find on your local HUD directory. Establishing these relationships can keep you top of mind and make it easy for the case workers to reach out when they find a family or individual that’s a good fit for a vacant property.
There are also a handful of online listings that you can use to promote your property to low-income families, including:
- Gosection8.com
- Rentlinx.com
- Craigslist
- www.AffordableHousing.com
You can also use your community connections to find local households in need of affordable housing. In addition to getting involved in a variety of in-person communities like churches, sports leagues, and social clubs, you can also leverage apps like Nextdoor and Facebook groups to connect with people.
Not Sure Still? Here’s What Other Section 8 Landlords Are Saying
Making the decision to be a landlord that accepts housing choice vouchers is doing a great public service to improve the community around you and provide affordable housing to those in need.
That feel-good sentiment, paired with the tangible benefits of being a section 8 landlord, has made many landlords major advocates for the program.
“S8 tenants are my favorite and I would take as many as I could get. Tenants that pay perfectly on time and are incentivized to have a good relationship because they don’t want to lose their sweet deal of paying 1/10th of the actual cost? It’s perfect” – Reddit user
“My latest section 8 tenants have been wonderful and worked hard to elevate themselves. There are stereotypes of section 8 but far from all are bad. Most are people who work hard to put a roof over the head of their family.” Scott Nelson, Quora user
“I have been a landlord and a real estate investor for well over a decade. In that time, I have rented to a variety of tenants from all walks of life. Some of these tenants have been Housing Choice Voucher (HCV) recipients or Section 8 tenants. I have not found renting to HCV recipients much different than renting to any other tenant. Expect for annual inspections and complying with a small amount of additional paperwork, it is pretty much the same.” Jane King, Quora user
