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User Stats

113
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25
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Tom Server
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113
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SECTION 8 rent below FMR

Tom Server
Posted

So I have a unit that is a section 8 tenant whos rent is under the FMR By 262 dollars.. Their lease is about to come up in August... Am I able to raise the new lease by 262 and put the unit at the FMR

Also, can I find out a head of time if the housing authority will pay it ? 

If not , I dont want to raise the rent, due to I dont want the tenant to have to pay.

any suggestions 

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Ian Hogan
  • Real Estate Agent
  • Worcester, MA
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Ian Hogan
  • Real Estate Agent
  • Worcester, MA
Replied

Usually with Section 8 you need to give them 60 days to approve a rent increase (this is at least how it is in Massachusetts with my tenants). During that time they determine whether or not the unit is "worth" the increase, from what I've seen as long as it comes to FMR of the area determined by HUD it should pass.

If you want to know if it will affect their portion of rent, this is usually based on 30% of their income and Section 8 covers the rest. You could not change the rent at all, and they could still pay more by a re-evaluation by section 8. It is based on their income and housing situation (dependents, etc). Your best bet if you want to know that is calling the Section 8 Housing Assistant assigned to your tenant and asking, they may be able to calculate what it would look like.

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Colleen F.
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  • Investor
  • Narragansett, RI
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Colleen F.
Pro Member
  • Investor
  • Narragansett, RI
Replied

@Ian Hogan just curious what happens since he didn't do a 60 day notification.  Do the section 8 leases have automatic renewal for the same term or do they expire, just curious.

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57
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82
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Ian Hogan
  • Real Estate Agent
  • Worcester, MA
82
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57
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Ian Hogan
  • Real Estate Agent
  • Worcester, MA
Replied

In Massachusetts if a lease expires it automatically turns into month to month, so I this may depend on state. So here it would just continue with section 8 unchanged. If you miss that 60 days it really just pushes when the rent can actually change. I've had it to where section 8 was delayed on that rent change even with the proper 60 day timeline and they back paid the rent to me based on the adjustment.

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Tom Server
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Tom Server
Replied

I decided to raise the Section 8 rent from $950 to $1,200 starting in October. This new amount is $100 below the (FMR). However, I recently learned that my tenant is on disability and receiving $750 per month. While on disability, section 8 adjusted his rent and he is responsible for $850 of the rent, with Section 8 covering $100. Prior to the disability payments, section 8 covered $900 of the rent and tenant paid $50

My initial goal was to increase the rent to $1,200 assuming section 8 was paying.  If not section 8, I would make the rent $1050 for a normal paying tenant.

Now, the tenant is upset about the large increase cause I thought sec 8 was paying it. He will be on disability for another 3 or 4 months, with him being responsible for a majority of the rent. The $1200 a month increase would take effect while he is on disabilty and he will likely be responsible most of the $1200 while on disability.

 Now the question is , when his disability is over... does the full section 8 come back or will he be responsible for the rent.. I have to make a contract.. but do i make it $1200 have the tennat deal with the rent for time he is on disability and then assuming full section 8 will return at 1200.  Or do I raise it to $1050 assuming the tenant is going to now be responsbile for most?

hope this makes sense lol took me a while to write this to try to explain it best

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Colleen F.
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  • Investor
  • Narragansett, RI
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Colleen F.
Pro Member
  • Investor
  • Narragansett, RI
Replied

@Tom Server The rent is the rent. I am not sure how his disability would make him cover more rent. Anyone I knew made less on disability. Make it what rent for the apartment would be on your normal market.

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Nathan Gesner
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  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
Property Manager
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  • Real Estate Broker
  • Cody, WY
ModeratorReplied

This is one of the problems with Section 8. You are losing money every money, and you are possibly losing more because the tenant feels entitled to cheap living.

I recommend you increase the rent to the market rate and get paid what you are worth. If the tenant can't afford it, he can look for another rental that is within his price range.

  • Property Manager Wyoming (#12599)

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Replied

 That's interesting, does the tenant work as well as getting the disability check? I'm guessing prior to you raising the rent when he first rented, he wasn't receiving disability. I would put it at market rent. regardless section 8 or not, no one is going to be happy with increased rent.

I inherited a tenant that was on section 8, and she didn't work because if she did, she would have to pay rent. the housing authority covered 100% of her rent.  

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Patti Robertson
Property Manager
  • Property Manager
  • Virginia Beach, VA
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Patti Robertson
Property Manager
  • Property Manager
  • Virginia Beach, VA
Replied

I just had a HA approve a $300 rent increase for one of our units.  Submit it!

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Tom Server
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Tom Server
Replied

So, I ended up increasing there rent from 950 to 1100... contract signed, took effect 10/1 .. section 8 already paid a portion of it $1050, she owes remaing $50... anyway.. after they signed the contract a week later they sent me an email giving 60 day notice and are planning on moving out 12/1   ughhh

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James Wise#1 Classifieds Contributor
  • Real Estate Broker
  • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
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James Wise#1 Classifieds Contributor
  • Real Estate Broker
  • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
Replied
Quote from @Tom Server:

So I have a unit that is a section 8 tenant whos rent is under the FMR By 262 dollars.. Their lease is about to come up in August... Am I able to raise the new lease by 262 and put the unit at the FMR

Also, can I find out a head of time if the housing authority will pay it ? 

If not , I dont want to raise the rent, due to I dont want the tenant to have to pay.

any suggestions 


 You have to apply to raise the rent with the housing authority.