It's estimated that housing is now unaffordable for nearly half of all American renters. As the housing crisis continues to grow both renters and landlords need to find solutions that can benefit both parties.
Luckily, thanks to government programs that exist with Section 8. This program offered by the HUD helps individuals afford their rental properties and cheap homes.
But exactly what is Section 8? And how does Section 8 decide if the rent you're proposing is reasonable? In this guide, we'll answer these questions so you can decide if offering your Naperville properties through the program is the right decision for you.
What Is Section 8?
Section 8 is also referred to as Housing Choice Vouchers. Here's how the affordable housing program works: low-income individuals and families get vouchers if they qualify for the program.
This voucher allows them to pay only a percentage of the cost of renting from an apartment or home. The federal government will cover the rest. Landlords can sign up to offer their homes as part of the Section 8 program.
Why do this? Attracting tenants can be a challenge. With Section 8, you'll have a much larger pool of tenants for your properties. What's more, you're also guaranteed rent payment thanks to the government.
How Does Section 8 Determine if Your Rent Is Reasonable
To become a Section 8 landlord, the HUD needs to make sure that you're offering Fair Market Rent. They'll do this by looking at rental valuation factors like the size of your property, the location, and the construction date.
They'll also consider factors like property condition, any included amenities, and whether or not utilities are included.
When Is a Rent Reasonableness Determination Required?
According to the HUD, there are four main reasons why they might ask for a rent reasonableness determination. These include:
- Before implementing a HAP (Housing Assistance Payment) contract
- Before you increase the rent on the property
- If there was a reduction of 10% or more in the FMR (Fair Market Rent)
- If the HUD asks you to for whatever reason
Undergoing rent reasonableness determinations can be a pain but you need to remember that they're important.
Without them, the housing authority will approve of rents that are too high which wastes funds and resources for the program.
How Can a Property Manager Help You?
Signing up for Section 8 requires you to jump through a lot of hoops. It's not only the rent reasonableness inspections, it's also extensive paperwork. That's why you should consider using a property manager.
These professionals can help take care of all the busy work when becoming a Section 8 landlord. What's more, they can also take care of tasks like rent collection and maintenance so you can benefit from passive income.
Need Help With Section 8? Contact PMI West Suburban
We hope this guide helped you learn more about how Section 8 works. Here at PMI West Suburban, we know that every property owner will have different preferences about how to rent their property.
That's why regardless of whether you want to go through Section 8 or traditional means to get tenants, we can help you.
We have over twenty years of experience serving our Naperville community. So if you're ready for the rental help you need, get in touch with us today.
