Many owners ask about Section 8 in Birmingham, Alabama and whether or not they should enroll their investment properties in the program. This can be a great program as long as you understand a few pros and cons to it. Section 8 refers to the housing law that basically guarantees rental assistance for tenants with their landlords. For the most part, whether or not your house is in the Section 8 program depends highly on where it is located. You will not find a Section 8 house in a “class A” neighborhood. This is a lower income program for low income tenants.

Section 8 Housing: The Pros

The first pro to this program is the fact that because it is a government assisted program, your rent arrives on time month after month. The government provides financial assistance for a majority of the rent, so you don’t have to worry about the tenant not paying the rent. The guaranteed rent is an attractive feature. It’s often found that Section 8 housing can bring in a higher rent rate than some privately owned homes in the surrounding areas, which is also appealing to owners.

Section 8 also requires an annual inspection on the property. This means you have someone going into your property to inspect it and make sure it’s being maintained on an annual basis. This inspection can provide peace of mind; you can be sure nothing is out of place or severely altered or damaged.

Lastly, since there is a ready supply of Section 8 prospects, your marketing costs are going to be much lower. The houses turn very quickly and there are many people looking for these kinds of homes. Your property will be on the market for less time which will save you money.

Section 8 Housing: The Cons

On the flipside of all this, there are some cons to consider as well when dealing with the Section 8 program. Some landlords find that Section 8 tenants don’t take care of the house as well as a privately paying tenant would. Additional damage is a possibility, and due to the low income nature of the tenant, the odds of recouping any damage from the tenant are very slim. You are most likely not going to get them to pay for their damages.

As much as Section 8 inspects the houses and sets a high standard of readiness for the homes, you still may incur an extra cost to get the house ready for a tenant. The inspections on a yearly basis do help, however as an owner, you will find there is always additional work to be done to make it ready for the next tenant.

Sometimes, Section 8 tenants may have some “long term guests” in the home that may or may not be on the lease. Relatives, boyfriends, or girlfriends may be occupying the home without you knowing it, which can, in turn, cause additional damage to your property. These tenants may be more high maintenance than regular tenants. They issue more work orders and call the office more to fix items that really are not the owner’s responsibility.

A image of series of townhousesLastly, since the program is very popular and there are many people using it, Section 8 staff is often stretched very thin. They are handling a wide variety of issues and requests, which can make the process a lengthy one.

We do believe in the Alabama Section 8 program and find the program to be very beneficial. If you would like any further information or would like to discuss the process more, please do not hesitate to contact us here at Decas Group.