With real estate going for bargain prices in most of the country, it may be the perfect time to pick up some rental houses. But becoming a landlord means you need to find and keep tenants. You can enlist the federal government’s help by renting to people with Housing Choice Vouchers (formerly called Section 
and letting Washington help pay the monthly rent.
Yes, it takes some effort to become a Housing Choice landlord, but the legwork is much the same as a good landlord would do anyway. And while there may not be guarantees that your voucher tenants will pay their portion of the rent each month, you are at least guaranteed the part covered by the voucher. With conventional renters, you have no guarantees.
To make your properties eligible for rent to voucher holders, get in touch with your city or county housing authority and fill out a landlord packet.
Then ask to be listed on their boards. You can also list your properties and get matched with tenants at GOsection8.com.
As a landlord, you’ll need to provide things like proof that you have insurance and that you’re the one with the right to rent the property. You’ll want to run some comps to have an idea of what the fair market rent is. Ask the local housing office for a list of available properties so you can see the numbers in your area. You can also visit the Housing and Urban Development site and use the FMV calculator.
All Housing Voucher properties must pass inspection, and some landlords say this is the toughest part. Your rental must meet a large number of criteria, which include smoke detectors, handrails, and heat in every room, as well as be free from cracked or peeling paint, electrical dangers, vermin and roaches, damaged gutters, mold, and water damage or leaks.
When your property is ready and you have a potential tenant, make sure you have an application on hand and a way to verify the information for accuracy. You can sign up for a free account at ezlandlordforms.com and download state-specific rental applications and other real estate-related forms. Through due diligence, in most cases you should be able to find renters who will pay their part of the rent (so they don’t lose their vouchers). Remember that the program works by paying a portion of a tenant’s rent (based on the tenant’s income) directly to the landlord. The tenant pays the difference. You need to make sure you know the numbers to know whether you can make a decent profit.
You should also be aware that you will need to be flexible about first and last months’ rent, plus deposit. Most voucher tenants simply won’t have all that. Once you are ready to rent, make sure the voucher is filled out and notarized correctly, and be aware that you may have to wait for a couple of months before the first check arrives.
Finally, to make sure your properties are being treated well, you may want to incur the expense of a property management service, or schedule to walk through the home or apartment on a quarterly basis with your tenant. And you will be subject to a yearly inspection.
If you want to invest on a larger scale, you need to find out where rental properties are in high demand and purchase prices are rock-bottom. Research newspapers, classifieds and Craigslist in areas you are considering. Are there many properties for rent? What is the vacancy or occupancy rate? Call the chamber of commerce and local businesses and find out whether business is booming or bust. If an area has jobs, rental properties will be in greater demand.
When you have narrowed down the right location and invested in rental properties, consider hiring a management company to keep them in good condition. Detroit is one city where investors have recently snapped up dozens to hundreds of homes at a time, sometimes for $10,000 or less. Even though the population is declining in Motor City, real estate investors have snapped up properties hoping to profit as landlords.
Be sure to inspect thoroughly before you buy, so that you know how much of your profits will be eaten (or at least postponed) by repair expenses. You can locate professional home inspectors in your area by visiting the International Association of Certified Home Inspectors, Inc. or the American Society of Home Inspectors. You also need to make sure the properties you buy are located in neighborhoods that are in demand, and that average rents are high enough to insure you a tidy profit.
With all the hoops to jump through, what makes the Housing Voucher Program good for investors? Well, some investors say there is still plenty of low-hanging fruit. Once the ball is rolling, you have guaranteed income on rental properties. And in many areas, the mortgage payments you’d make on single-family homes or multi-family units are far lower right now than the average rents. That means the vouchers may give you a decent return, with the remainder of the rent just icing on the investment cake!
Tags: housing choice vouchers, landlord, rental income, subsidized rent