Property Management for Section 8: A Beginner's Guide

Managing properties can be tricky, especially when it comes to Section 8 housing, which is why it's important to know how Section 8 works.

This guide will help you understand what Section 8 property managers do, what you need to manage these properties, the good and bad parts of Section 8 housing, and whether you should hire a professional to manage your Section 8 rentals.

Let's start exploring the basics of Section 8 property management and how it can benefit you.

What Does a Section 8 Property Manager Do?

A Section 8 property manager has similar duties to a regular property manager. They manage rental houses and apartments in the Section 8 program. This program helps low income families and individuals afford a place to live with rental assistance.

The government pays part of the rent directly to the owners through this program.

Here’s what a Section 8 property manager does:

• Find Tenants: They look for people who qualify for Section 8 to live in the properties they manage. They need to make sure these tenants meet certain income rules.
• Collect Rent: The property manager collects the part of the rent that the tenants pay. The government pays the rest.
• Handle Repairs: If something breaks or needs fixing in the property, the manager makes sure it’s fixed quickly.
• Keep Records: They keep all the paperwork in order. This includes leases, inspection reports, and rent records.

In short, Section 8 property managers aren't much different than regular property managers; they just need to know more about Section 8 and government regulations.

Section 8 Requirements for Owners

Before you can become a Section 8 landlord, there are several important steps you must follow.

Here's what you need to know to get started and successfully rent your property to Section 8 tenants:

1. Contact Your Local Public Housing Authority (PHA)

To become a Section 8 landlord, you need to fill out an application with your local housing agency.

This application asks for details about you and your property to make sure both meet the Section 8 program standards.

The process might seem a bit long, but it’s mostly about proving that your property is a good fit for the program and that you are willing to follow the rules for Section 8 housing.

2. Choose a Tenant

According to the U.S. Department of Housing and Urban Development, once the PHA lets qualified families join its Housing Choice Voucher Program (HCV), you can then choose and approve one of these voucher holders based on your own rental rules.

Then, you need to complete the voucher holder's Request for Tenancy Approval form.

The PHA will check to make sure the rent you want to charge is fair compared to similar places in the area and isn't higher than what tenants who don't have assistance are paying.

3. Pass a Property Inspection

Before renting your property to a Section 8 tenant, it must pass a safety inspection.

This inspection checks that your property is safe and livable according to the housing quality standards set by the U.S. Department of Housing and Urban Development.

Here is what they'll be looking at according to their HVC brochure:

• Sanitary facilities
• Water supply
• Food preparation and refuse disposal
• Lead-based paint
• Space and security
• Access
• Thermal environment
• Site and neighborhood
• Illumination and electricity
• Sanitary conditions
• Structure and materials
• Smoke detectors
• Interior air quality

If there are any problems, you'll need to fix them before you can rent to Section 8 tenants.

4. Sign the Lease and HAP Contract

Finally, after you and the tenant sign a lease and send it to your local Public Housing Agency (PHA), they will give you a HAP (Housing Assistance Payment) contract to sign.

Once you sign this contract with the PHA, you will start getting monthly HAP payments from them, and the tenant will pay you the rest of the rent.

Pros of Section 8 Housing

Managing properties through Section 8 offers several benefits that can make your job as a landlord easier and more secure.

Let's discuss some top advantages of choosing Section 8 housing for your rental properties.

Guaranteed Rent Payments

One of the biggest benefits of managing Section 8 housing is steady rental income because the government pays most of the rent directly to the owners.

This means you always get your rent on time every month! This can be a huge relief, especially if you’ve had trouble with late payments in the past.

Good Quality and Long-Term Tenants

Section 8 programs require tenants to follow certain rules to stay in the program, which helps make sure they take good care of your property.

Also, because finding and keeping Section 8 housing can be challenging for tenants, they will likely stay longer, giving you stable, long-term renters.

Free Marketing

When you have a property that qualifies for Section 8, you can list it for free on various government websites like HUD.gov. This makes it easier to find tenants because your property gets more visibility without any extra cost to you.

For HUD, visit their state section, click on the state you're interested in, and then look for the "Get Rental Help" link.

Cons of Section 8 Property Management

Now that we've discussed the pros of Section 8 property management, let's talk about some downsides that you should consider.

Annual Property Inspections

One downside of managing Section 8 properties is the need for regular inspections.

These are done to make sure that homes meet the safety and health standards set by the government. While it's good to keep properties in top shape, these frequent checks can be a lot of work for property managers.

However, you should regularly inspect any property you manage, not just Section 8 homes.

Longer Vacancy Periods

Sometimes, filling a vacancy in a Section 8 property can take a while. This is because each potential tenant must be approved by the housing authority, and the process isn't always quick.

Waiting for the right tenant who qualifies under Section 8 rules means your property might stay empty longer than usual.

Pricing Regulations

With Section 8 housing, you can't just charge any rent you like, which is probably the biggest downside for many property owners.

Local housing authorities control rent based on factors such as the area's fair market rent prices. This means you might not always be able to set a rent that matches your property's value.

Should You Hire a Section 8 Property Manager?

Choosing a Section 8 property manager is a big decision for your business.

If you're managing a Section 8 rental, you already know there are specific rules you need to follow, so  experienced property management companies can help make sure everything runs smoothly.

A property manager takes care of the day-to-day tasks of running a rental. They handle important jobs like finding tenants, collecting rent, and dealing with any problems that come up.

This can save you time and hassle, especially if you have other responsibilities or live far from your rental property.

However, if you choose to manage them yourself, there is another option.

Using Property Management Software

Another option is to use affordable housing property management software.

This type of software can help you manage your property by keeping track of rent payments, maintenance requests, and more.

It's a good tool if you prefer to manage things yourself but want a little help staying organized.

So, think about your time and skills. If managing the property feels overwhelming or if you're unsure about the rules of Section 8 housing, hiring a property manager might be a good choice.

Property management software could be enough if you're comfortable handling things independently and need some help staying organized.

Bottom Line

Managing Section 8 properties can be very rewarding but comes with unique challenges and knowledge of a niche market.

The benefits, like consistent rent payments, long-term tenants, and free advertising, can outweigh the challenges, of pricing regulations and property inspections.

With the right approach, investing in section 8 housing can be a valuable part of your real estate investment strategy.

To learn more about how property management software can benefit section 8 properties, schedule a free demo today!