With rent prices up to 25% higher than last year, Denver residents are finding it increasingly difficult to find accommodations they can afford. Fortunately, relief is available for many of these people through the Section 8 housing program.
This federally sanctioned initiative helps deserving families find suitable homes in the Denver rental market by subsidizing a portion of their rent payments. Being a Section 8 landlord means you're guaranteed rental income.
Anyone can sign up to become a housing provider under this program if they charge a reasonable rent. Read on to find out if you could enjoy the benefits of being a Section 8 housing landlord without losing your profits.
How Does Denver Section 8 Housing Work?
Under the Section 8 Housing program, qualifying families receive vouchers they can use to pay up to 70% of their rent. Those who wish to apply for this benefit can do so via the Denver Housing Authority, provided they meet the city's earnings limits.
The DHA vets Section 8 tenants according to their rental history and helps to match qualifying individuals with housing that suits their needs based on their income.
The main difference between public housing and Section 8 housing is that recipients can use their housing vouchers to pay for privately owned accommodation instead of state-owned property.
Private rental units must meet minimum health and safety standards, satisfy local rent reasonability requirements, and undergo regular inspections.
Landlords who wish to sign up as housing providers can apply to the DHA for consideration.
What Is Reasonable Rent in Denver?
Carrying out a rental analysis is a good way for private landlords to calculate a fair rental price to attract more tenants. The HUD uses a similar formula to determine reasonable rental rates for an area.
Their criteria include:
The location of the property
- The type and age of the home
The quality of the accommodation
Number of rooms and property size
The amenities provided
Hiring a property manager to oversee your rental unit can help increase its appeal, enabling you to charge a higher rent.
Considering this information, the DHA then uses data from the Public Housing Authority and the local Chamber of Commerce to analyze rental rates for similar units to arrive at a Fair Market Rent (FMR) value.
Calculating Fair Market Rent
FMR is equal to the rent rate for at least 40% of standard-quality housing in each designated location.
The DHA uses the FMR to calculate how much they will pay toward Section 8 rent for your home. This amount is usually between 90% and 110% of the FMR value for your zip code.
When matching tenants with housing, the DHA will also consider whether the applicant can afford their portion of the rent according to Section 8 guidelines.
Benefit from Being a Section 8 Landlord in Denver
The Section 8 program is an excellent initiative for providing affordable housing in Denver, with several benefits for landlords. As a Section 8 landlord, you're assured of regular rent payments, if you meet certain rental compliance criteria.
PMI Cedarboldt can help you benefit from this worthy initiative by advising you on fair rental rates, carrying out tenant screening, and assisting with rent collection. We have over 20 years of investment and real estate experience and a strong history of exceptional customer service.
Let us help you make the most of your Denver investment property.
