Landlords who provide section 8 housing in Salt Lake City can earn good money. Tenants who rely on the government program are generally easy to find, and the backing of the federal government can make section 8 housing a reliable source of income.
If you are looking for landlord advice on this popular government program, we will overview the pros and cons of owning section 8 housing in Utah.
What Is Section 8 Housing?
You may be wondering what is section 8? The Housing Choice Voucher Program was founded in 1937 to provide affordable housing to low-income tenants.
The government program pays the balance of a rent payment, which allows section 8 tenants to pay a subsidized rate. The program requires tenants to pay roughly 30% of their income in rent, and the difference is covered by the federal program that is run by Housing and Urban Development (HUD). HUD allows local housing authorities to administer federal funds.
Any section 8 landlord must have their property inspected by the local housing authority. The subsidy is paid directly to the landlord by the local housing authority. Tenants are still required to pay their share of the rent.
Pros of Being a Section 8 Landlord
For many section 8 landlords, the biggest benefit is a steady and reliable source of income. HUD allots funds based on the number of qualified tenants who live in your properties. Each month, you can expect regular payments from the local housing authority.
During last year's economic downtown, many renters fell behind on rent. Even if your renters miss one or more payments, you will receive steady payments from the section 8 program. The government program typically makes direct payments to your bank account on a monthly basis.
Section 8 housing typically enjoys high occupancy rates. In large cities like Salt Lake City, demand for section 8 housing often surpasses supply. If you own section 8 housing, you probably won't have to worry about vacancy issues.
If you are looking to boost your return on investment, section 8 may be the way to go.
Cons of Being a Section 8 Landlord
Anytime you work with the government you should expect some red tape. While not onerous, the application to qualify for being a section 8 landlord can be a chore. Then, there are regular inspections of your properties.
Lower-income tenants can come with lower credit scores and potentially other problems. If you worry about occasional damage to your investment property or other factors related to higher-risk section 8 tenants, then section 8 housing may not be ideal for you.
Finally, section 8 tenants have additional protections. Evictions are a more complicated process when dealing with section 8 tenants.
Here's one of our landlord tips. Avoid these problems by having a robust screening process for new tenants.
Are You Maximizing Your Income Potential?
Section 8 housing is just one of many options available to property owners. By helping low-income individuals and families afford a safe and stable home, you can also enjoy the financial benefits of partnering with local housing authorities.
Are you looking to rent a property in Utah? Our specialized staff is prepared to help you with any property management situation. Contact us today so we can start helping you reach your goals!