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Section 8 or Market Rent Tenants
Posted by Chase on October 3, 2023 at 11:11 pmShould I get section 8 or market rent tenants for my investment properties? What are the pros and cons having tenants with section 8 vouchers or market rent tenants?
Max replied 11 months, 3 weeks ago 3 Members · 2 Replies -
2 Replies
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It’s important to note that Section 8 program rules and procedures may vary slightly from one PHA to another, so individuals and landlords should familiarize themselves with their local PHA’s specific requirements and guidelines. Additionally, participation in the Section 8 program is voluntary for landlords; they are not required to accept Section 8 vouchers, but they must comply with fair housing laws.
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The decision of whether to rent your investment properties to Section 8 tenants or market rent tenants depends on various factors, including your financial goals, property location, personal preferences, and local market conditions. Here are some considerations for both options:
Section 8 Tenants:
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Guaranteed Income: Section 8 tenants receive rental assistance from the government, which can provide a more stable and reliable source of income for landlords.
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Lower Vacancy Rates: There is typically high demand for Section 8 housing, which can lead to lower vacancy rates.
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Regular Inspections: Section 8 properties may be subject to regular inspections by housing authorities to ensure they meet certain quality standards.
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Income Limits: Section 8 tenants must meet specific income requirements, which could limit your potential tenant pool.
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Rent Limits: Rental rates for Section 8 properties are capped by the local housing authority, which may be lower than market rents in some areas.
Market Rent Tenants:
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Higher Rental Income: Renting to market rate tenants often allows you to charge higher rents, potentially increasing your income.
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More Tenant Options: You have a broader pool of potential tenants to choose from when renting at market rates.
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Greater Control: You have more control over the tenant selection process and property management decisions.
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No Government Regulations: You won’t be subject to the regulations and inspections associated with Section 8 housing.
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Potential Vacancy Risk: Depending on market conditions, you may experience higher vacancy rates between tenants.
Ultimately, the choice between Section 8 and market rent tenants will depend on your investment goals. Some landlords choose a mix of both to diversify their tenant base and income sources. It’s essential to research your local rental market, understand the demand for Section 8 housing, and assess your financial objectives before making a decision. You may also want to consult with local housing authorities and real estate professionals for insights into your specific market. Additionally, consider your willingness and ability to meet the requirements and responsibilities associated with each option, as Section 8 housing may involve additional paperwork and inspections.
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