Section 8 — The Housing Choice Voucher Program Advantages for Landlords

Known generally as Section 8, “the housing choice voucher program” is a federal government’s major program for assisting the very low-income families, the elderly and the disabled to afford housing in the private market. It is a great option for many investors. 50–100% of the voucher holder’s rent is paid by the government. Because these tenants can lose their voucher, there is often less delinquency, which means fewer evictions and better profit margins for investors. There is also a strong demand for housing where vouchers are accepted. Below we will cover the 11 advantages to renting to section 8 tenants.

1. Consistent rent payment made by the government

A substantial part of the rent money comes each month via direct deposit or a mailed check. Also, tenants will typically pay their portion on time, because failure to do so can cost them their housing voucher.

2. Pre-Screened Tenants

In addition to qualifying a tenants income, the housing authority also performs criminal background checks and drug testing for all household members that are 18 years or older.

3. Constant Tenant Base (Lower Vacancy Rates)

The Housing Choice Voucher Program is very popular and most urban areas have thousands of tenants in their waiting list. This means, the property will get rented very quickly.

4. Less Turnover (Another Reason for Lower Vacancy Rates)

Because Section 8 guarantees rental assistance for individuals who qualify (as long as there isn’t a big change in income or family size), most of these tenants stay longer.

5. Tenants are Motivated to Pay their Portion of Rent

The Department of Housing and Urban Development (HUD) sets the Fair Market Rent at a level that is in the 40th percentile for the rents in the area. This simply means that 40% of homes in the area rent for less than this amount and 60% rent for more than this amount. This is important for Section 8 landlords, because it means that low-income tenants will be able to afford their portion of the rent. These tenants also really want to pay their rent, because they want to keep their Section 8 vouchers.

6. Less Delinquency

Section 8 vouchers have fewer delinquencies than non-Section 8 tenants. This makes sense, because Section 8 tenants want to keep their Section 8 vouchers so they can continue enjoying the benefits this program offers.

7. Fewer Evictions

This Section 8 benefit goes hand in hand with the one above. Most Section 8 tenants want to keep their vouchers, so they will do their best to keep your property well maintained and to follow the lease agreement.

8. Better Profit Margins

In many areas, the rent you can get from a tenant using a Section 8 voucher is higher than what you can get in your typical C (or even D) neighborhood. When you couple this fact with the consistent and timely rent payments you will receive from the government and the willingness of Section 8 tenants to pay their rent, many landlords enjoy and actually even prefer Section 8.

9. Free Advertising

The U.S. Department of Housing and Urban Development has a website that prospective tenants can use to find qualifying low-income housing.

10. Business Support Scholarship

There are companies that offer scholarships to Section 8 landlords to obtain advanced property management training as well as discounts on everyday property management supplies.

11. The Joy of Being Able to Help People in Need

While there are a variety of benefits of becoming a Section 8 landlord, one of the biggest is being able to help someone in need.

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