As a landlord, one of your most important priorities is finding the right tenants to fill your property. In fact, it's arguably the most important priority. Without tenants, you don't have an income, plain and simple.
Opening yourself up to a plethora of tenant types means a bigger pool of possibilities, including Section 8 tenants. However, if you plan to rent to tenants under this federal assistance program, it's up to you to ensure your rent is fair.
Not exactly sure what that entails? This blog explains it for you.
Section 8 and What it Means for Landlords
So, what is Section 8?
It's a federal assistance program that provides low-income families, seniors, and those with disabilities the support they need to afford safe, decent housing. Section 8 operates via a Housing Choice Voucher Program where tenants receive vouchers that assist in subsidizing their rent payments.
What does this mean for you, as the landlord?
Section 8 requires that you follow set guidelines when renting to tenants under the assistance program. These guidelines ensure that the rent you charge is fair and reasonable. The rent you can charge is determined by the Department of Housing and Urban Development, based on your region and local market conditions.
Known as Fair Market Rents (FMRs), they set the benchmark for the maximum rent you can charge under the Section 8 program.
Factors that play a role in evaluating rent include:
- Your local market conditions and the prevailing rental rates in your area
- The size and quality of your property - the bigger the property and better the amenities, the higher you can set rent
- Your utility costs, i.e. your rental rates must cover your utilities each month
Before approving your rent it undergoes a reasonableness test. Essentially, this test ensures it is comparable to other market rates in your region, under Section 8.
Section 8 Tips for Landlords
If you plan on offering tenancy under Section 8 guidelines, here are a few helpful tips on how to ensure you maintain a good relationship with your tenants, as well as the authorities.
- Maintain up-to-date knowledge and stay informed on all changes/updates to guidelines under Section 8, as well as the local housing market. Having a good knowledge of FMRs in your region will help you set reasonable rental rates
- Make property maintenance a priority - the better the condition of your rental, the more you can justify the rates you charge.
- Stay open to negotiation around your rent. If your rental rates are too high under Section 8 guidelines, make sure you're willing to negotiate with tenants regarding what they can afford or adjust your rental terms
Remember that all tenants deserve fair and reasonable rental rates, not just those under the section 8 assistance program. If you're unsure of anything regarding the Section 8 rental process, reach out to a local property management company for expert guidance.
Need Assistance with Section 8 Tenancy?
If you're willing to accept Section 8 tenants but aren't sure of reasonable rent guidelines or Section 8 eligibility in NJ, then CMS Property Management offers the helping hand you need.
We offer a range of services to make your property ownership venture a smooth and successful one. Whether it's assistance with Section 8 tenancy, tenant screening, rent collection, or eviction support, we do it all.
Get in touch today for all the advice you need!