As an investment property owner, you may have heard of Miami Section 8 housing but never given it much thought. Would it pique your interest to know that the federal government has set aside $30.3 billion to pay rent to landlords this year?
Under the Housing Act of 1937, these funds go toward paying 70% of rental amounts due by qualifying Section 8 tenants.
Regular income from tenants is the holy grail of all landlords. So, it seems like an obvious choice to accept federal funds for your investment property.
There are some pros, cons, and red tape involved, though. Keep reading to find out if Section 8 tenants could work for you.
Section 8 Housing Basics
Section 8 housing is a major federal initiative to help alleviate homelessness across the nation. It supports families who earn less than 50% of the average income in their area.
Qualifying tenants are allocated Housing Choice Vouchers (HCV), which the federal government uses to pay their rent. Most of these families consist of two people or small female-headed households with children.
Any landlord can accept HCVs, subject to certain conditions. In return, they receive a guaranteed payment of 70% of the rent every month, courtesy of the federal government.
Miami's Section 8 Program applications are currently closed, but the city has a long waiting list for applicants and is eager to expand the available housing options.
Section 8 Criteria for Landlords
Section 8 tenants can take advantage of two types of housing assistance programs. Project-Based Assistance applies to specific pre-approved developments designed for these families.
Under the Section 8 laws for voucher-based assistance, tenants may rent any housing, subject to the landlord's approval. The only criteria for this housing is that it must be affordable, decent, and safe.
According to prevailing landlord-tenant laws, you can't discriminate against Section 8 tenants based on their income, but you should still carry out background checks before agreeing to these rentals.
Due to this, you may become a Section 8 landlord without intending to, but you may also advertise that you accept these tenants. HUD requires an initial inspection before the tenants move in and may request annual inspections, too.
Pros and Cons of Section 8 Rentals
The federal government allocates HCVs according to fair market rental rates. They calculate these based on the median rent in an area, taking forecasts and inflation into account.
These rates usually end up being around 40% of the median rent in a neighborhood.
Some benefits of accepting these low rentals include:
- Low vacancy rates
- Almost guaranteed lease renewals
- Fair annual rent increases
If voucher-assisted families don't take good care of your property, they may lose this privilege, so they're usually good tenants, too.
Get Help Navigating Section 8 Tenants
There's no need to feel intimidated by Section 8 landlord laws when you have an accomplished property management team on your side. Pristine Property Management is your perfect partner when it comes to maximizing your Miami investment properties.
We have over 15 years of experience in Miami real estate and offer a complete range of management services. Call us to discuss the available options for your rental home.