You've discovered what you believe will be the perfect property for Section 8 housing in Albuquerque, New Mexico. You're now ready to make it yours to boost your rental income. Smart thinking.
Research shows that over 11,000 households in New Mexico utilize Section 8's housing choice voucher program, which helps low-income people rent affordable and safe housing. The federal program covers part of a tenant's rent cost, with the tenant covering the remainder.
Are you wondering if your unit's rent amount is reasonable for Section 8 in Albuquerque? Let's explore what you need to know about Section 8 housing rental pricing.
How Section 8 Works
How much the federal government pays for a tenant through the Section 8 program is based on multiple factors. One factor is the renter's income.
Other factors include how reasonable the rent is for the unit and the area's fair market rent, or FMR, amount. The FMR is the estimated rental cost of a standard rental unit in your specific market. Your unit's rent amount has to be deemed fair compared with units similar to yours based on the following characteristics:
- Maintenance efforts
The Public Housing Authority, or PHA, has to determine if your unit's rent amount is reasonable if you've never rented to Section 8 tenants but want to start. This organization will also have to evaluate your rent amount's reasonableness if you request to increase your Section 8 unit's rent amount.
Another situation where the PHA must determine your Section 8 rent amount's reasonableness is if your area's FMR drops by 5% or more from the prior year.
Your Section 8 Housing Rental Pricing
The PHA will utilize multiple information sources to compare your unit's rent amount with those of similar units. These include tenant reports, newspaper ads, online databases, and market surveys. PHA officials might also inspect your rental unit to determine its quality and condition.
What happens if they determine your rent amount is too high for your area? They may ask you to lower your rent, or they might deny your request to increase your rent.
Suppose your rent amount is too low for your market? Your low rent amount may be approved, or the PHA might let you increase your rent so it's at the FMR limit.
Another important task of the PHA is to ensure your unit's rent isn't too costly for your tenant. The renter's rent portion cannot surpass 40% of their income every month during the lease's first year. Public housing officials might take into consideration your renter's utility costs when calculating their rent.
How We Can Help With Section 8 Housing
Section 8 officials determine if rent is reasonable by comparing a Section 8 unit's rent amount with those of similar rental units in the area. They'll approve the rent amount only if it's not too high for the local market.
At PMI 4U, we offer top-tier property management services, including rent collection, tenant screenings, and maintenance in Albuquerque, New Mexico. We also offer free rental analyses so that landlords can discover how much they may profit from their rentals. Partner with us to manage your property effectively, and request a rental analysis today!