18 Sep Is Section 8 Good for Landlords in California? Part 2
Do you own investment properties in Los Angeles and are thinking about making one of those properties a Section 8 Rental?
Every year more landlords in Southern California consider Section 8 for their properties because this housing program is one of the oldest in the United States.
Besides helping to provide renters in SoCal with affordable housing, Section 8 also offers landlords a wide variety of benefits that are not often talked about.
In part 2, of our 3-part series on section 8, we’re going to provide you with more information about this program so you can have confidence that it’s right for your investment property.
Section 8 Offers Landlords Stable Tenants
What most landlords who are considering Section 8 in Southern California don’t know is that in order for a tenant to qualify for this program they have to meet the pre-screening requirements and also be able to devote 30% of their monthly income to rent.
Since rents in Southern California have reached all-time highs in many areas, Section 8 tenants can also be counted on to keep their rentals clean and in excellent condition.
Landlords are still in control of the Section 8 tenant that they choose because they can use their own lease agreement and stick to the same screening criteria that they would use when screening any other tenant.
Is Section 8 Too Good to Be True?
With Section 8 offering so many obvious benefits you maybe think if it’s so good why doesn’t every landlord offer it? The answer to this question is that this program does offer its fair share of risks that you should consider before getting started with it including the following:
Regular Inspections
Although Section 8 may be a great program, the reality is that it can also be a bear to deal with because of the regular inspections. These inspections occur once a year and can take some time especially if the inspector finds areas of your rental property that they feel are not in compliance with HUD’s standards.
Yes, these inspections have to be done even if your rental doesn’t have turnover so it’s best to make sure that your property has high-quality maintenance ahead of time so you can avoid having the inspector find more than one area of your rental that has to be repaired before you can rent it to your next Section 8 tenant.
Money Could Get Tight at Times with Section 8
Another important thing to consider with Section 8 is that money could get tight for you at times because the tenant, not Section 8, is required to pay the security deposit.
You should also be aware that you’re not going to receive your payment voucher until a tenant moves in so these are important points to consider especially if you’re starting out with your investment property and are counting on the revenue from your tenant to pay the mortgage.
Sadly, some full-pay tenants may also be turned off that you have some Section 8 tenants and they could want to rent elsewhere so it’s important to keep this in mind before moving forward with Section 8.
Federal funding cuts could also affect Section 8 in Southern California and the United States as a whole so it’s important to keep in mind that the future of your investment portfolio may be directly impacted by the who is President or is the head of the Department of Housing and Urban Development during the calendar year.
Last, of all, you may experience some problems selling your property down the road especially if you’ve been renting it exclusively as a Section 8 rental property because some investors may not want to deal with the work of ending leases in order for them to make the property a free market rental again.
Learn More About Section 8
Do you still have questions about Section 8? We have answers! MW Real Estate Group specializes in managing Section 8 rental properties across Southern California. We can also assist you with sourcing, acquiring and renting new investment properties as well.
To learn more about Section 8, or the services we can offer you, contact us today by calling (213) 927-2117 or click here to connect with us online.
