Having decades of experience in the Chicago real estate market, Zenith is well-versed in acquiring quality properties and properties with great potential from banks, foreclosure sale and several other avenues before beginning the assessment and rehabilitation process.
The rental process is very similar to traditional apartment rentals. The process will begin with a typical market tenant questionnaire, which will ask you questions related to your needs, income and situation from a property. A sample market tenant questionnaire consists of:
- What is your rental history and experience? Are you currently renting?
- Are any of your previous landlords willing to provide a good reference?
- How long have you lived in your current home?
- Why are you interested in relocating?
- When are you interested in relocating?
- How much income do you make yearly, and what is your current employment?
- How many people would be residing in the apartment/home?
- Does anyone smoke?
- Are there any pets?
- How many parking spaces are required?
- Have you ever been evicted from a rental?
- Is there anything that would come back unfavorably on a background screening?
From this point, we would evaluate your needs and see if we would be a good match before referring you to one of our realtors or property managers for next steps.
We partner closely with several area realtors who advertise our listing and also take over the administration and charging of rent for tenants. We also partner with property management companies who are responsible for managing the day-to-day operations, maintenance and tenant care at each property.
In previous years, Chicago saw some unfortunate turns politically and in standards of living. However, active investments and political interest in the rehabilitation of Chicago, Illinois have come a long way. Now, as Chicago has stabilized politically and employment is on the rise with the influx of jobs and new industries, more families are moving into the city and searching for housing options. There has never been a better time to make a property investment!
Section 8 Housing, which is short for Section 8 of the Housing Act of 1937, has been around for a long time. It is a provision that tenants qualify for in which the US Department of Housing and Urban Development that pays partial or full rent and utilities in their place of rent. This enables low-income families to reside in cities even as cost of living grows more expensive. Properties go through a strict application process to become classified as Section 8 Housing, which creates a long-term and steady investment opportunity with several benefits.
Section 8 is funded through the U.S. Department of Housing and Urban Development. Each year, the President of the United States proposes a fiscal budget that is then either accepted or sent back by the legislative branch of government. Once approved, the proposed funding is granted to various departments in the government and initiatives, one of them being the U.S. Department of Housing and Urban Development.
Using local Public Housing Agencies, the Section 8 funding and vouchers are administered to prospective tenants.
Information on funding information, budgeting and Section 8 data for the city of Chicago and surrounding areas can be found at the state site of the U.S. Department of Housing and Urban Development here: https://www.hud.gov/states/illinois
Several housing options can become eligible as a Section 8 Housing listing. The most common are single apartments, apartment complexes and single-family homes.
Section 8 Housing is a great investment for property owners who want a long-term investment that provides consistency in income and return. Most if not all rental payments will arrive on time, as the US government is responsible for depositing the payment. This makes collecting rent much more reliable than relying on 100% of rent from a regular tenant who may be late or pays irregularly. Even in the case of Section 8 Housing tenants that pay 30% of their rent and are late or paying irregularly, 70% of your rent will arrive on time.
Another attractive factor in investing in Section 8 Housing is that most tenants tend to be longer term than regular tenant and will renew after the 1 year lease term multiple times. The Section 8 Housing program provides a long waiting list of tenants waiting to get into available housing. This means there will never be a shortage or a long search for prospective tenants.
Save accounting for unusual circumstances and Acts of God, our investors will receive on average 8% or more return on their investment.
We’ve got some basic estimate figures for you here to help illustrate how your return will be accomplished from a Section 8 property. Section 8 gives rent depending on the count of bedrooms in the home. As per FY 2018 payment schedule for a 2-bedroom property, rent would be $1253 approximately, with an increase of $100 to $200 for each additional room. The landlord will need to pay for tax, insurance, water bill and maintenance. After subtracting this cost, the approximate net return can run anywhere from 8% and up.
Simply put, yes. Although Section 8 Housing investments are prized for their steady return on investment, the Section 8 program allows landlords to reassess rental charges an annual basis and increase as much as 8%. Over time, the annual increase will increase profit significantly.
The time has never been better to make an investment in a Section 8 Housing property. The Chicago Housing Authority, who is the largest owner of rental housing programs in Chicago plans to increase the count of 50,000 tenants by approximately 8500 tenants per year over the next five years. As the market expands and demand is created for quality Section 8 Housing, investors are poised to increase their profits in this sector.
One potential setback in the eyes of potential investors is the strict standards for housing that are enforced by inspections before housing properties may qualify for the program. However, Zenith Real Estate is incredibly detail-oriented and committed to meeting the Inspection Checklist every time from the rehabilitation process forward. With a property from our company, the inspection and 1-year re-inspections before lease renewals re-occurring thereafter will be a breeze!