Affordable housing is a national concern that needs robust solutions. As a landlord in Wichita, you're in a unique position to contribute to the solution and earn sustainable income through Section 8 tenants. Designed to offer reasonable housing options for those in need, this government program can also positively impact your business.
But like any business decision, inviting Section 8 tenants into your property comes with its own set of advantages and complexities. To better understand this often-overlooked opportunity, let's dive into the pros and cons that lie ahead.
Advantages of Renting to Section 8 Tenants
If you're a landlord, you probably want a steady rental income. Renting to Section 8 tenants can offer you that. Here's how:
Guaranteed Rental Payments
The government pays at least 70% of your rental income. Every month, you'll see these funds in your bank account - a luxury many landlords don't have.
Low Vacancy Rates
Section 8 tenants outnumber affordable housing units in many areas. Simply put, there are more eligible families than there are units available.
Supply and demand in the case of Section 8 can fall in your favor. This may mean less vacancy time for your rental units. It also means there's a large pool of great tenants to choose from.
Cons of Renting to Section 8 Tenants
Government programs come with red tape and paperwork. If patience isn't your strongest trait, consider this factor. You'll have to deal with the various applications and inspections necessary to accept Section 8 tenants.
Less Control
Property management for Section 8 tenants includes allowing an outside party to decide rent rates and needed repairs. You'll also have to handle changes in a family's eligibility without notice.
Rent Value
Expect a 'fair market rent' on your rental property. FMR is a value set by the Department of Housing and Urban Development (HUD) to ensure that reasonable rents are charged in a given area. You must set the rent for your property in line with the FMR value for your location.
Security Deposit Issues
One crucial piece of landlord advice: security deposits might not arrive from Section 8 tenants. While the government assists these tenants by covering a substantial part of their rent, it doesn't extend this provision to security deposits.
This financial responsibility rests on the shoulders of the tenants themselves. However, these very tenants are part of the program because of their limited financial means.
The added burden of gathering a lump sum for a security deposit seems daunting, if not impossible, for many of these tenants. As a landlord, you must decide how to navigate this potential obstacle while keeping your accounting and reporting healthy.
Secure the Best Section 8 Tenants
Renting to Section 8 tenants offers key benefits, from guaranteed rental payments to reduced vacancy rates. But it's not without challenges, such as less control and potential security deposit issues.
Navigating these pros and cons requires keen understanding and strategic planning. As a landlord, finding the right tenant can be pivotal in your journey.
With over 20 years in the property management industry, PMI Wichita is ready to help screen your potential tenants and find the best renters for your Kansas property. Contact us to ensure your rental business thrives with the right people.
