Property Management of Section 8 and Housing Choice Voucher Programs

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If you’re looking for residents who have incentives to pay their rent on time each month look no further. Those who qualify for federally sponsored housing assistance programs backed by the only organization that can legally print money…the federal government…awaits you!

The oldest program has been around nearly 80 years! Section 8 of the Housing Act of 1937, authorizes the payment of rental housing assistance to private landlords on behalf of approximately 3.1 million low-income households.

It operates through several programs, the largest of which, the Housing Choice Voucher program, pays a large portion of the rents and utilities of about 2.1 million households. The US Department of Housing and Urban Development (HUD) manages the Section 8 programs.

One property manager I interviewed who participates in the Housing Choice Voucher program said she feels secure knowing the government funds will be deposited in her client’s bank account every month.

She explained the HUD-managed program was meant to pay for “a portion” of the rents and utilities of those in its care. But often, as she explained, payments are greater than competitive rental prices.

   A Real-Life Example of How Section 8 Renters Pay Off for Landlords

Instead of renting a recently vacated house on the open market, the property manager encouraged her landlord-client to offer it to the local Section 8 housing authorities. They found a woman with two children to rent it.

“The Section 8 people offered to pay us $1,600 a month for this property, which is about $300 more than it’s worth”, the manager told me.

“After my client pays the monthly expenses – the mortgage, maintenance, and taxes – we are netting more than 12% on this investment. That’s a nice return in today’s world”.

“Is there a catch?” I asked disbelievingly? “What if the resident didn’t pay her rent?”

The manager explained that Section 8 guarantees about 75% of the monthly rent.”

So, as she informed me, even if the resident doesn’t pay, the government still deposits $1,200 into their account, no questions asked. The resident is responsible for the remaining $400.

But there’s no reason for the landlord to worry about their renter’s $400 payments. The local Public Housing Agency make sure she pays her part. They act as “the enforcers”.

The owners don’t even worry about her making payments on time; because the local agency handles that challenge also.

Then I asked what would happen if she and her children trashed the place? I was told that the local officials dutifully inspect the house and make sure it stays in good condition.

In effect, they do the work of a property manager, free of charge. The owner-client still wanted a property manager to be their “liaison” between them and the local agency.

But since the property manager hardly needed to do anything they negotiated a lower fee then the standard 10% of the rent normally paid to a property manager.

When the lease expires, if the resident leaves, the government finds another resident to take her place – on the same terms, which saves the property manager and the owner that responsibility.

The best part was that it’s all guaranteed and supported by the federal government. Everyone including the resident came out ahead.

Remember, public housing is limited to low-income families and individuals. The family or individual’s income cannot exceed 50% of the median income for the area.

There are strict guidelines that owners and tenants must follow to be eligible to participate in these kinds of program. For specific details, contact your local Public Housing Agency.

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