Homelessness is a concern for over 60% of California residents. Despite government initiatives, like Section 8 housing vouchers, many of these people are still struggling to find houses.
If you're a Merced landlord, you can help alleviate this crisis by making your home available for these people. There are several benefits associated with being a Section 8 landlord, but you need to determine if it's financially viable first.
Read on to find out if your rental rates are in line with what the state authorities view as reasonable.
Section 8 Housing Explained
The Federal Section 8 housing program provides needy families with vouchers to help them pay a portion of their rent. To qualify for this program, tenants must earn less than a predetermined threshold and apply for accommodation via the Housing Authority of the County of Merced.
The city will attempt to match these prospective tenants with houses in their range of affordability. Under this program, the tenant only pays 30% of their monthly income directly to the landlord, and the Section 8 program pays the rest.
To retain these benefits, the tenants must pay their rent on time and take good care of the landlord's property. Having section 8 tenants in your property means you, as the landlord, benefit from this, as well as a high likelihood of lease renewals to limit costly rental vacancies.
In return, you must maintain your property in line with certain standards, agree to regular home inspections, and charge a reasonable rent.
Reasonable Rent Criteria'
As a general rule, your rent rate should be around 1% of the value of your property, but the first step when setting rents is always to calculate the costs associated with the property. Next, you should conduct a rental analysis to determine a fair rent for your area.
You do this by researching the rent rates of similar properties in your neighborhood. Be sure to compare homes of a similar size and age that are in the same condition as your rental property.
When you apply to become a Section 8 landlord, the Housing Authority of Merced will carry out a similar analysis to determine if your rents are in line with fair market rates.
The California Tenant Protection Act has strict rules about annual rent increases, and these apply to Section 8 housing, too.
The California Tenant Protection Act has strict rules about annual rent increases and these apply to Section 8 housing, too.
Explore the Benefits of Being a Section 8 Landlord
Being a Section 8 landlord means you are guaranteed to receive a portion of your rent every month and enjoy the benefits of good tenants and lease renewals. It's an excellent option, provided you can cover your expenses while remaining in line with fair market rental rates.
Hiring a property manager is one way to keep your costs low enough to qualify as a Section 8 landlord and also navigate the legal intricacies of this program.
Chosen Property Management is your first choice when you're looking for assistance with any aspect of property management. We are a team of highly qualified and experienced professionals dedicated to optimizing our clients' investment properties.
Find out what we have to offer today.
