Rental Property Investor · Haddonfield, NJ · Member since 2018 · 6 posts · 3 votes
Hi all - hoping for some advice on renting out to housing voucher program tenants in southern NJ. Right now I own two properties that each have a HUD 2021 SAFMR of $1900+ each (4 bedrooms each) that will be ready to rent very soon. I have a few questions:
1) How successful are some of you at getting SAFMR rates for your properties? Do housing authorities generally offer less, or do they have to offer this amount? Is a utility allowance usually deducted from the SAFMR? One of my subject properties was rented out previously for $1300/mo to a non voucher tenant - so the voucher amount is substantially higher than market rent, from my experience.
2) How hard is it, in general, to find voucher tenants for 4+ bedroom properties as opposed to 1 and 2 bedroom vouchers?
3) Finally, what's your experience been like with voucher tenants (South Jersey or otherwise) compared to regular tenants?
Hi Robert, I can't help you with item 1 but I will be happy to share my experience with 2 and 3. I own a portfolio of strictly Section 8 properties in St. Louis, MO.
Here, 4 bedrooms are in extremely high demand. There are so few units with 4 bedrooms that voucher holders with a 4 bedroom voucher absolutely jump on any listings they with 4 bedrooms that will take their voucher.
Which takes me to your question 3 - again, I'm speaking from my experience and here, all Section 8 properties are in high demand. Especially units that are higher quality. That gap allows me to be very choosy when it comes to picking a tenant. I screen meticulously (I would if I had market tenants too) but in doing so have been able to find wonderful tenants. They take care of their properties, they're easy to work with and they pay their rent portion and utilities on time (I'm actually owed $0 right now from anyone).
Well, if you've got the HUD FMRs for your county, my understanding is that HUD will NOT pay more than that number (less the UA = Utility Allowance).
The H/A gets the HUD money and uses the FMR as a guideline and may make vouchers less (so they can do more vouchers) or more (if there is a real shortage of 4 beds like the other person noted) with some extra funds.
@Robert Fink Yes my Section 8 rents are higher. I watch this closely and keep it on a spreadsheet! My rents are 10 percent above what Zillow says they should be and 8% above the Rentometer average.
I also don't include any utilities in my rents - all utilities are either in the tenant's name or we bill them forward (there are a couple utilities here that have to stay in the property owner's name).
I let the tenants know this will be the case before I approve them so there aren't surprises at lease signing.