I've never dealt with section 8 with the properties I've had. I was looking at a building that had some section 8 tenants and had a couple of questions.
Is it really difficult to deal with Section 8?
If I inherit a Section 8 lease, is there a way to renegotiate the rent? How tough is it to raise the rent?
I have a couple tenants on section 8 and after the first year they are at the unit you are able to raise the rent in proportion to the going rents in the same area.
I don't have a problem with section 8, yeas there is some paper work to do but the rent is always on time.
Not only that... but in some markets there is a long waiting list for section 8 (3+ years in Dayton ATM) so tenants don't want to lose their section 8 status. It's extra hassle, but it has benefits. The main problem that I have with section 8 is that you pretty much have to use their contract terms instead of your own.
BEWARE! Read the fine print on your prospective tenant's Section 8 voucher. I found out the hard way that the seller of my building had an "agreement on the side" where the tenant was supposed to pay $84 per month in addition to her subsidy. Section 8 specifically does not allow this! So instead of getting the $462 a month I thought I would get I'm only getting $378 / month.
If you buy a building with Section 8 tenants then you must assume their lease. At the end of the lease though you are pretty much free to do as you please.
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