Hello all. I have a client that wants to list his six unit complex. 4 of them are section 8. I was wondering if having section 8 tenants will help(or not) the saleability of the property.

I would say it depends. Some buyers will not want Section 8, some will not care, and others will be excited. I suspect it also depends upon the reputation that Section 8 tenants have in your area.

Generally, it would not bother me if it was appropriate to have Section 8 tenants in that type of building, at that price point, and in that area.

what do you mean by appropriate?

Appropriate. Did the seller fill the property with section 8 tenants just to get it filled, but really they are paying lower than market rents for the property.

If the Section 8 tenants are paying the typical market rent for that apartment in that area, then it is appropriate.

thanks Scott!
one more quesition, if the rent is listed as $1200 per month and the section 8 voucher is $1080, can the tenant pay the difference, or is this not allowed?

It is not allowed. With that said, I know that it happens, but I have never gone there.

Scott,
Actually that is allowed. If their voucher is X and they want to live in XX then they must pay the difference.

Usually that is not an issue as the voucher is often for more than you could get out of the property from a non-section 8 tenant.

Paul-
I disagree. If you read the section 8 paperwork, you are specifying (and signing for) what the actual rent is. Additionally, I have places that I rent to Section 8 tenants and have had their coordinators call me and tell me that my rent was too high for the tenant to pay (I was at $1095 and the limit was $1080).

Scott,
If you have the rent set at $1095 and have it as accepting Section 8 your are entitled to the $1095 a month rent regardless of the voucher approval amount if the potential tenant wants to lease the property.

Having several Section 8 properties I am very familiar with the paperwork. In your case the actual rent is $1095 and that is what you are signing and the remain amount unpaid by the voucher is the responsibility of the tenant if he or she wishes to occupy the property. The coordinator is just trying to get a rent concession for her section 8 client unless the rent is above what the max allowable for the number of bedrooms in your area. Each area is different in rent amounts.

Huh....Now you have me thinking.....

Let me think about that.

Coming from Australia guys im a little unsure of what a Section 8 tenant is. Can someone enlighten me Thanks!

I had a section 8 tenant, by my understanding they are not allowed to pay the difference. I am in South Florida & Section 8 tenants don't have a very good rep. Mine was a great tenant except when I sold the property, even though I gave her enough notice of the closing date she did not want to leave. I even gave her some cash to help her with the movers & guess what she did w/it, keep it & the new owners had to move her themselves! Everyone that had dealt w/section 8 tenants warned me that it's a nightmare to get them out. I learned that the hard way.

Someone who has their rent subsidized by public welfare / housing assistance.

Are you all saying the Section 8 is bad or the tenants are bad? Doesn't Section 8 pay for repairs, go after the tenant if they don't pay and if they don't do they lose their voudcher?

I would definitely not say they are bad. Section 8 just pays the rent. They do not do repairs or go after the tenant.

Section 8 tenants are just like any other tenant. You need to screen them correctly.

Cool Guy,

Concerning the saleability of your Section 8 complex, I think it may be important to know your buyer (easier said than done, eh?). It is my understanding that traditionally Section 8 housing has been considered "low rent" & "downscale", although that no longer seems to be the case. The upsides seem to be guaranteed payment (up to $1080.00). I hope this helps.

[url=http://www.centrepointetownhomes.com]Centre Pointe[/url]
Murfreesboro, TN.

Does Section 8 vary from state to state?

Here in Ohio it is nice to have a Section 8 rental because your rent is always there on time. But, they tend to be "hard" on the property itself and most investors claim the repairs are higher and Section 8 requirements are tougher on the property itself. So, you find yourself putting more money into the home for it to continue to be up to Section 8 code.

A nice perk for renting to section 8 tenants is the steady reliable portion of income from the city/county. Careful screening will insure steady reliable income from the tenant too.
Some hardship cases receive 100% assitance.


Regarding the rent..here in VA the final rent is decided when the inspection takes place near the end of the process. The split between the city/county and the tenant is also revealed. Many times the allowed total rent is less than the landlord wants to rent for. Simple research can reveal a likely rent. Some landlords just roll with it, others have the tenant pay on the side. This is not allowed from my understanding and is against regulations. The section 8 office may allow a 900/mo rent of wich they will pay 600/month. Leaving the tenant with a 300/mo obligation. Sneaky landlords say they want more. Tenants are eager to oblige since landing a lease is tough to do if you are on the voucher system.

Here is a link that will take you to the page where you can find out the fair market rent for Section 8 in your area.

http://www.huduser.org/datasets/fmr/fmrs/fy2009_code/index.asp?data=fmr09

I am not sure if these #'s are including utilities or not.

Here is the original link I used to get there.
http://www.hud.gov/groups/landlords.cfm

The term section 8 covers a wide array of subsidized housing. Yes the tenants should be treated like every other tenant (fair housing act anyone?). No they are not like every other tenant.
I have managed project based section 8, and have managed apartments that accept section 8 vouchers. These people are supposedly held to a year lease, but HUD will not allow you to go after them if they break thier lease. You cannot hold them accountable for late fees. You have to give them 30 days to pay you back for damages...and if they don't, well, you can't send that to collections.
Yes you can charge them the difference. If market rent is $xx.xx, they may only receive $zz.zz as subsidy (this is based on their income). They are responsible to pay the difference. They are also required to report any...ANY...change in income every time it happens. So everytime they change jobs, lose help from HHS, or whatever, you have to redo the paper work.
Section 8 is a lot of paperwork, and HUD can be a pain (i.e. now i have to turn stoves and lights on for inspectors...they can't do it themselves..actually received memos on this from HUD). Good luck to all who start their journey into section 8.

2 DIFFERENT LIMITS HERE. One is the the amount the rent amount allowed by the s8 authority, the other is the amount paid by the s8 authority. In hardship cases, they will pay 100% of the allowable rent determined by s8 authority (based on market rents, but not equal to market rents in all cases). Ususally, it is some lower percentage paid by the authority, with the tenant picking up the remainder. Tenants and landlords are not supposed to work outside of the total rent amount, should that amount be lower than the market rents for the area. Many times S8 tenants have so much trouble finding willing landlords they offer over and above the allowable, this is to be off the record and is against the rules. It is totally independent of the ratio paid by the authority vs. amount paid by the tenant.

In the VA localities I have dealt with S8 authotires, you never know what the rent will be until the inspectior comes through. Many times this is very near the move in date. You usually have an idea, but nothing is concrete until the inspector signs off on the file. Also you may not even know the break down of S* vs. tenant. Frank