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Forums » Landlord & Rental Property Questions » Setting rent price for Section 8

Setting rent price for Section 8

21 posts by 11 users


SFR Investor · Texas

It is my understanding that you can get a little more for Section 8 rents in many cases than you can from private market. How do you determine what the max amount you could set for rent and still get section 8 tenants?

Anybody with experience in Arlington, Texas or north Texas would be great, but I am open to what everyone has to say.


· West, Michigan

Here in MI it is the opposite. Sec 8 is lagging slightly, but are close to 'market'.

Call a local sec 8 office and ask. They will ask what you are supplying (gas, electric, trash) and then they will have a max payment depending on number of bedrooms.

Depending on the actual person their payment will be almost the whole amount or nothing depending on their income.

Residential Landlord · Hampton Bays, New York

Brian; we have a section 8 resource page if you click above on resources and then check out sec 8 resources . or if it is too cumbersome to navigate you can also call your local section 8. The office in Dayton has been very supportive but I don't imagine it is that way in all counties.

I find the section 8 rent is about the same as my non section 8 , only difference is that I get the money like clockwork directly deposited to my IRA account.

SFR Investor · Texas

Originally posted by @Michael Lauther:
Brian; we have a section 8 resource page if you click above on resources and then check out sec 8 resources . or if it is too cumbersome to navigate you can also call your local section 8. The office in Dayton has been very supportive but I don't imagine it is that way in all counties.

I find the section 8 rent is about the same as my non section 8 , only difference is that I get the money like clockwork directly deposited to my IRA account.

Thanks Michael Lauther,

I understand that FMR are used, but I checked FMR for my area and for a 2 br the FMR is 863/month. But that is for Dallas, Arlington and Fort Worth. In my immnediate neighborhood, a 2 br goes for about 700-750/month. I am trying to find out if it varies per neighborhood, or can I just list at 863 and it will be paid? I suppose I'll need to call my City and ask.

If I could get 800+ for my 2BR, that would be pretty awesome. Something tells me it is not that easy...

Multi-family Investor · South Jordan, Utah

Brian, I believe they calculate FMR by county. You should be good to go on up to $863.

Residential Landlord · Dallas, Texas

I've really never gotten Section 8 to pay more than market rent, but I've also never tried for a couple of reasons. First, I'm not sure how I could market the property in a way that wouldn't deter non-subsidized renters from looking at the property. (e.g. one price for Section 8, one price for non-section 8) I would not feel comfortable setting a high rent (which would deter retail renters) in the hopes that I'll land a Section 8 renter. I do know of some people who will collude with a tenant to increase rent (e.g. once you find out they are on section 8, you agree with the tenant you will charge her $900/month, instead of the advertised $800/month.) If the tenant isn't paying any portion of it, they don't care. This just seems icky to me so I don't do it.

Second, DHA will do a rent survey before fully committing and if it thinks the rent is too much they'll demand you lower it. I generally just set market rent and don't worry about it. That's just my experience, though. I'd be curious if anyone does it differently.

I've had pretty good experiences with Section 8, but it is not without it's pitfalls. For example, if the tenant gets kicked out of Section 8 (not uncommon), they are released from the lease (meaning you can't charge them for breaking the lease).

Residential Landlord · Hampton Bays, New York

Brian : you got me to check the fair market rent for Dayton and found it went down from 2011. It is listed by state and then county.
The challenge in my area is not the actual rent but finding someone with a valid voucher.
Studio one two three four bed

Final FY2012 FMR $487 $556 $685 $922 $1,100

Fina l 2011 FMR $508 $580 $714 $961 $1,147

Real Estate Investor · -, Illinois

FMR according to HUD is $895 for a 3 bed in my area. The 3 bed house that I accept Section 8 for, the local HUD office will only pay $625 for due to amenities, age, size, condition, location, etc. Easiest way is to just call the local HUD office and see what they will give for it.

Real Estate Investor · Central Valley, California

Brian: have you checked to see if your county Housing Authority has a website. Sec8 rents, allowances for utilities, inspection guides and even listing the prop is available online for both my home county and my REI farm.

Sec8 pays $1150 for 3BDR in my farm, which is better than market in several neighborhoods. Trouble where I am isn't the rents, but finding a good tenant with a voucher.

Real Estate Investor · Central Valley, California

Originally posted by Michael Lauther:
Brian : you got me to check the fair market rent for Dayton and found it went down from 2011. It is listed by state and then county.
The challenge in my area is not the actual rent but finding someone with a valid voucher.
Studio one two three four bed

Final FY2012 FMR $487 $556 $685 $922 $1,100

Fina l 2011 FMR $508 $580 $714 $961 $1,147

Michael: even in Dayton? I assumed the lack of tenants with S8 vouchers was a CA thing. They haven't accepted new S8 applications for years here. The waiting list moves very slowly, and the good tenants with good vouchers for 3 and 4 BDRS have choices here. Seems the recession and housing crisis has made S8 a coveted tenant pool.

SFR Investor · Houston, Texas

The HUD website is not a good indicator of what your rent amount will be. Section 8 mainly bases the amount on the area. Then they add in extra for certain things. In my area, section 8 either pays at or under fair market rent. Call them and find out.

Residential Landlord · Hampton Bays, New York

Yes K. Marie Sec 8 told me that they are not issuing new vouchers and have not done so for almost a year. Dayton sec 8 also has a website to list property and where there pool of voucher holders can look for property.

If I could rent solely to section 8 I would do so and each and every property I own is one I would live in myself. Sometimes the simplicity of living in a 800sf home seems inviting but my wife and 3 daughters would miss me because they would never move.

Real Estate Investor · Central Valley, California

@Michael Lauther Ah, yes, I can attest to the simplicity of raising a family in a 1000 square foot home with 1 bath. When you live in a supposed Paradise (Santa Barbara), you pay big bucks for housing, make a lot of sacrifices and call it simplicity. My husband's family is from Yellow Springs outside of Dayton, his mother is still there, and he works for a foundation that requires he visit every other month.. He would live in his car (and has!) before he would he would live in Ohio again.

In my market, a good S8 tenant is landlord gold.

Residential Landlord · Hampton Bays, New York

K.Marie, Dayton just opened up section 8 to its waiting list of applicants , has been closed for 8 months but it has not accepted applications since 2008. There are lots of people in need of assistance In Dayton and that pre dates the current national economic fiasco.

by the way How do you do that @Michael thing?

Real Estate Investor · Springfield, Missouri

I was a Commissioner of a large public housing authority here and administered "owned housing" and Section 8. Rent vouchers are set by HUD according the the MSA (metropolitan statistical area) for each bedroom size based on FMR in that area.

There are also two systems for adminstration, one throgh a PHA and the other can be through non-profit affiliate adminstrators. This is to issue vouchers. How they specifically adminster a program will vary somewhat as the interpret HUD guidelines, for example, how strict they might be on inspections.

You can rent a unit for what ever you like, but charging more because someone receives assistance will land you in trouble. If you advertise a unit at 900 and the tenant receives 800, they are allowed to make up the difference, if they qualify. If you are willing to advertise that unit at 700 and rent it at 700, the assistance will be limited to that 700 basis.

Additional assessments are made for utilities paid by the tenant or the landlord. No one is to "cash out" from any assistance.

Thriowing in a bit more, as options are popular. It is against HUD regulations for any part of any assistance paid to count toward any option to buy or lease purchase arrangement, HUD does not buy homes for people. The parties can be prosectued and the client will lose all entitlements, it's fraud.

However there was a HUD program that allowed a tenant to have an option paid from their own funds if they qualified. Not sure if that is still current.

I'm no expert section 8 adminstrator but I had to deal with it.

Financexaminer@real estate investor dot com

Real Estate Investor · Audubon, Pennsylvania

I have not yet rented to Section 8 tenants, but have had so many inquiries from people with vouchers that I did investigate some of the details. This may or may not apply to any area other than my county.

The Section 8 tenant gets a voucher for a specific number of bedrooms. Depending on the area / neighborhood, that voucher gets a certain dollar value. The landlord can receive that full voucher amount if the landlord is paying for all utilities! No way for me to pay all utilities, so next comes handling of utilities. From that voucher amount, the Housing Authority subtracts the various utility allowances that end up being the tenant's responsibility, along with charges for the tenant needing to supply their own refrigerator; those utility allowances are re-calculated every year, as are the fair market rents. That's how the landlord can determine the "net" rent they will receive.

Now, the caseworkers are assigned to tenants, not to landlords, so getting cooperation from the Housing Authority can prove to be a challenge. They really don't want landlords to know the numbers for the fair market rent and utility allowances, because the landlords will manipulate the asking rent to take as big a "net" rent as they can - counter to the Housing Authority wanting to restrain amounts paid out.

So, you can have the tenant applicant bring all of the information from the Housing Authority if you really want to learn what the amounts are. Tell the applicants to get a copy of the utility allowances (they will already have their voucher amount) so that you can determine whether renting to them will pay you enough.

Then there is the matter that Bill mentioned, where the tenant can make up some of the rent from their income. The Housing Authority says that a tenant should pay 30% of their income toward rent, and that in some circumstance a tenant may be allowed to pay up to 40% of their income toward rent. In Bill's example of $900 rent and $800 allowance, if the tenant has at least $1000 income per month (approximately), then that might work. Where did the $1000 come from? $900 - $800 = $100 is pretty easy to see. Then that difference has to come from the 40% - 30% of income, so $100 in this case has to be no more than 10% of income.

Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183

Real Estate Investor · Springfield, Missouri

LOL, very astute Steve.....some might give the tenant those utility allowances, some may simply ask, are utilities included with this unit or not and never tell the applicant as they get what they qualify for and that makes the manipulation a little harder. And yes amenities are considered as well, not pools or spas or weight rooms, LOL, fridge, stove, A/C and type of heat....

And your qualification % are HUD guidleines @ 30% and 10@ with usual circumstances, like additional handicap accessible amenities required.

Financexaminer@real estate investor dot com

· West, Michigan

They also 1099 you at the end of the year.

SFR Investor · Los Angeles, California

In my Market (not Texas sorry) the Housing Authority (Section 8) posts on there website the rent prices for 0-5 bedrooms. Section 8 seems to pay more a little more than market rent in the C/D Areas of town because they base there rent prices on the whole city.

SFR Investor · Texas

Wow, thanks for all the feedback. Lots of great info here.
I have searched the forums and have not found this much specific to the nuts and bolts of Section 8. Thanks again everybody.

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