Buying a property with a section 8 tenant
I am in escrow for a multifamily with one section 8 tenant. Their lease ends in ten months. I understand I need to honor existing leases. My plan is to renovate the property and with the renovations move the rents to market. The property is currently in poor repair with below market rents. So two questions. Do I need to sign up to accept section 8 rents or can I just make the current tenant pay the rent in the lease. Is there any problem with simply not renewing the lease when it expires,
You should call the Section 8 office in your city and ask about the regulations covering change of ownership and a current copy of the landlord/tenants rules and regulations.
I agree with Brandon. You'll likely just need to do a change in ownership form and a few other things to ensure you receive those checks. I purchased a duplex last year and each unit had a different Public Housing Authority tenant and it was a similiar process for each. You may be able to ask for more rent from the authority's too. Many times section 8 pays slightly above normal rent.
#2 General Landlording & Rental Properties Contributor
You will have to honour the lease and you should defiantly not renew the lease when it ends. If you are upgrading the unit you will also want to upgrade your tenants.
You never want to mix section 8 tenants with non section 8 tenants. It will make it difficult to retain quality tenants.
Definitely contact Section 8 directly and register as the owner. They will likely make you sign papers before sending the checks to you. You also want to find out exactly what the procedure is to end the lease or raise the rent if you choose to go that route instead. In my area, I had to give Section 8 and the tenant written notice of non-renewal by a certain date, like 70 days out, or the lease renewed for a full year. I also had to submit any request for rent increase way before that. So you'll need to know exactly how it works in your area as they operate differently. Also, be aware that in some cities, you cannot deny just because of Section 8. So make sure if people ask if you take Section 8 or you say you're not renewing because you don't want Section 8 that you can actually do that in your area. And try to find out when the last inspection was as those are a pain, especially if they find something in need of repair, so you'll want to know when to expect it and if it is before the end of your lease term.