Chicago Housing Authority (CHA) has 47,000 Housing Choice Vouchers from the federal government to help low-income residents find housing. If you aren't a Section 8 landlord, you could be losing out on a huge amount of applicants.
Qualifying for a Section 8 rental isn't as easy as it seems. There are downfalls to the process, such as delays in your first rental payment and complying with the local CHA.
For some, the pros outweigh the cons. You benefit from lower vacancy rates and guaranteed rental payments. First, your rent needs to be viewed as reasonable. Keep reading to learn how Section 8 determines this.
When Will Section 8 Check Your Rent Price?
Section 8 looks at your rent reasonability more than you might think. You'll have to apply to get your unit approved for Section 8 housing, but this isn't the only time your rent is checked.
The Public Housing Authority (CHA) will decide if your rent is reasonable when:
- You want to increase the rent
- A tenant's lease is up for renewal
- HUD orders it
- They feel it's necessary
The Fair Market Rent can change year after year. Section 8 will compare the new rental rate to the rental rate in the past (if there are any changes) to determine if a rent increase or lease renewal is ideal.
Criteria for Reasonable Rent
Section 8 will determine if your rent is reasonable by comparing your rental property to similar ones in the area. To find a comparable unit, the properties must be similar in:
- Size
- Location
- Construction date
- Type of rental
- Property condition
- Amenities
- Included utilities
If you've recently made renovations, the CHA won't compare your upgraded unit to one without renovations. These factors help determine Fair Market Rent in Chicago.
If Section 8 decides that your rent is not reasonable, you won't be eligible for housing a Section 8 tenant. You cannot collect vouchers, even if the tenant wants to pay more out of their own pockets.
Becoming a Section 8 Landlord
Section 8 tenants are provided with vouchers and must find a rental to live in. If they choose your property, the CHA will inspect your rental before allowing a tenant to live there.
The inspection ensures the property meets quality housing standards and has a reasonable rent price. They will make sure the tenant can afford the proposed rental amount.
If you are approved as a Section 8 landlord for reasonable rent, you, the tenant, and the local CHA will sign the tenancy agreement. You will be guaranteed a consistent income through the voucher provided by the CHA.
A Section 8 tenant pays around 30% of their own income for rent in Chicago. If tenants don't pay rent, you are still receiving about 70% of the agreed-upon rental income.
Hiring a Chicago Property Manager
New tenants aren't always easy to find, but becoming a Section 8 landlord can increase your applicant pool. Hiring a professional property management company can help you set a reasonable rent price to decrease your vacancy rate.
If you want to become a Section 8 landlord but don't know where to get started, Chicago Style Management can help. We will work diligently to increase profits and make investments passive and stress-free.
For years, we've been helping landlords like you reach their financial goals. Ready to benefit from a property management partner? Contact us today to learn more about our services.
