We recently purchased another property with 10 units. Two tenants have now mentioned they have a voucher for section 8, and one specifically states I could get a lotmore for rent going the section 8 route. Our plan was to increase rents as they are significantly below market. One bedroom units are renting 500-600 currently, and section 8 for the county puts fair market rent at about $1100 for a 1 bedroom. I was planning on gradually raising rent 10% yearly to approach market abut if I get those two units inspected for section 8, I could potentially increase their current rent (500-600) by about double to $1100 by giving them a 90 day rent increase notice and getting the property inspected, etc. That would benefit the tenants as well as they wouldn't have to pay as much in rent. Is this normal? Have landlord and transitioned specific units and tenants to section 8 if they already had a voucher? Any issues with this strategy?
Wow. I can't believe that section 8 is that much higher than market.
If that were the case then I would definitely move the tenants over to section 8.
I think that you should reach out to section 8 and ask them about this. See if they would be agreeable to it. I don't see why not.
Yeah, we're in a more rural area compared to most of the county. The initial rents were far below market when we purchased, but yes in this area the fair market rent from section 8 is definitely way higher. We called section 8, and they said we don't do anything, it's the tenant who has to turn in their voucher. One of the tenants that had a voucher it already expired so I think they might have to go on the waitlist again which is a couple years out... lame.
Please read the laws on section 8. I am not an expert and definitely not a lawyer but I do know that I have read that you cannot charge more through section 8 than you would traditional lease for the same like unit/property. If you move to 1100 through section 8 and then rent a unit for 700 to a non section 8 tenant I think you are going to have issues with HUD.
Thanks for the reply Michael! I will start reading up on the section 8 laws, that's good to know.
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