There is a huge demand for affordable housing in Houston, Texas. More than 400,000 families in the city are eligible for the Section 8 voucher program.
For landlords, the Section 8 housing program is an opportunity to make rental property income. If you want to receive consistent income through the government, consider applying to be a Section 8 landlord.
Keep reading to learn how Section 8 determines fair rent prices.
Assessing Rent Prices for Section 8
Owning a cheap rental property doesn't mean you can't make money as a landlord. If you want to offer your properties through Section 8, the Department of Housing and Urban Development (HUD) will asses your rental price.
The government pays a majority of the rent price and the tenant will pay a capped amount. HUD will perform assessments when the lease is up for renewal or if you want to increase rent prices.
Section 8 uses these factors to determine if your rent is reasonable:
The location of your property has to fall within an area of Houston that Section 8 covers. If the unit is close enough, there might be some wiggle room for becoming a Section 8 property.
Location is a huge factor when it comes to setting a fair market rent. Fair market rent is calculated as the 40th percentile of gross rents to standard-quality units in a specific housing market, according to the Department of HUD.
Section 8 also takes local real estate into account when determining reasonable rent prices. They will compare your units to others in the area to determine the average price for the size of the property.
Comparing a three bed, two bath unit to a one bed, one bath unit won't be helpful. The units being compared should at least have the same number of bedrooms and bathrooms and be somewhat similar in square footage.
A property management company can help you compare your property to others with a rental analysis.
Affordable housing is helpful to those who can't afford rent payments but don't want to sacrifice quality. Section 8 won't consider properties that require a lot of repairs.
HUD will check the safety features of the property and check for functional utilities. Your Section 8 housing application will be denied if your property's condition is substandard.
Many landlords will add amenities to their properties as one of the ways to attract tenants. Depending on the upgrade, the landlord might be able to raise rent prices.
Section 8 will take these amenity additions into account to ensure landlords are doing things by the book.
How Property Management Can Help
Landlords have the opportunity to add to affordable housing in Houston, Texas, by applying for Section 8.
This rental assistance program requires specific qualifications. Most importantly, the government will decide if your rent price is reasonable.
Your rental pricing strategy needs to be comprehensive if you want your application accepted. Our property management company at PMI Northwest Houston can provide professional real estate services.
We'll use state-of-the-art technology to determine the fair market value in the area and come up with a reasonable rent price. Ready to benefit from 20 years of experience? Contact us today to get started.