Section 8 is a housing voucher program. It is the federal government’s major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.
Many landlords don’t like to offer Section 8 housing – possibly because renters who get Section 8 support may be less desirable. However, there are advantages to accepting Section 8 renters like
- guaranteed on-time partial or full rent directly from the government
- potentially higher rent
Many landlords get below-market rents for one reason or another. With Section 8, governments will pay rent for eligible tenants up to a certain amount based on zip code and number of bedrooms. The rent amount is called the Fair Market Rent (FMR). For example, one of my rentals in Stockton, California (San Joaquin County) is a triplex consisting of two 2-bedroom units and one 3-bedroom unit. Its zip code is 95209. According to the table below, I could get
- $1410 / month for each 2-bedroom unit
- $2000 / month for the 3-bedroom unit
When I purchased the property, I inherited the tenants who were paying $1200 / month for a 2-bedroom unit and $1250 / month for the 3-bedroom unit. If the tenants leave, I could increase the rents to the FMR and accept Section 8 in case non-Section 8 renters are willing to pay the FMR. My total monthly rental income would increase from $3650 to $4820. That’s an increase of $1170 per month.
You can get rent information for similar neighboring properties at rentometer.com. For example, for my 2-bedroom, 1-bathroom unit in Stockton (95209), the average rent is $1717. That’s $300 more than the government’s FMR (Fair Market Rent) amount. If the apartment is in great condition. you can even justify charging $1800.