VIRGINIA Section 8/Affordable housing question

5 Replies

Alright S8 wizards. We are on a ratified contract for a duplex (3/1 each side) in Petersburg, VA. Current rents are $700, but market is around $900. However, in looking at different strategies for this property, Affordable Housing may be an option. The link shows $1,340 for a 3 bedroom --> https://www.petersburgrha.org/...

So, how does one go about navigating these waters? Do you market the unit(s) at $1,200-$1,400 and note that vouchers are welcome to apply?

Thanks for your insight!

I love SEC 8, especially in a market like today where renters income can be unstable. It's basically rent insurance for the landlord - for free. If you search BP for SEC 8 you will find hundreds of thousands of posts. The topic comes up ALOT. My poor fingers got tired of typing the same thing over and over, so I put my tips and tricks in a blog post. Here's a link if you want to check it out.

https://www.biggerpockets.com/blogs/9232/55313-intro-to-section-8---your-perceptions-vs-my-realities

Just advertise it and take all applications.  A voucher is an income like any other.  I guess you could call up the Petersburg H/A and see if they'll post.

Also figure out the UA situation since that'll decrease the rent to you. Also, they pay based on HUD FMRs. Sometimes those FMRs go backwards.

In sum Sec 8 will not pay you more than market-rate (or at least very infrequently).  If you can't get market, a voucher holder isn't going to save you.

Originally posted by @Steve Morris :

Just advertise it and take all applications.  A voucher is an income like any other.  I guess you could call up the Petersburg H/A and see if they'll post.

Also figure out the UA situation since that'll decrease the rent to you. Also, they pay based on HUD FMRs. Sometimes those FMRs go backwards.

In sum Sec 8 will not pay you more than market-rate (or at least very infrequently).  If you can't get market, a voucher holder isn't going to save you.

 Thanks Steve.  And that is what I thought as well, and hence my mass confusion.  All my research on rent values show it being lower (much lower) than what the Housing Authority says.  

Our numbers are solid as is on the property.  Just looking at different avenues for the area.

Thanks for your thoughts.

@Jonathan Scheeler I have a portfolio of Section 8 properties in the St. Louis area.  I get 5 to 10 percent more in rent that I would from market tenants.  I'm not exactly sure why but in some areas, this is the case (my properties are B and C class houses/neighborhoods) and it's not unique to my part of the world.  Do a little research and looking around even here on BP and you'll see other people talking about pockets with higher Section 8 rents than market rents.  This seems to be the case more often in B to D class areas than A areas (generally I see that Section 8 rents for A areas are below market rents).

From my experience, the "rent reasonableness" test is what matters for Section 8 rents, up to the FMRs, meaning the HA is going to go off of what's reasonable for the area based on comps, up to the FMRs.  The comps our HAs use aren't accessible to the public (silly) but they are higher than the ones I come up with so I don't complain!

I'd recommend finding a landlord that is SUCCESSFUL with Section 8 in the areas you're in to see what they get for rents (I capitalize successful because I talk to a lot of landlords who hate Section 8 and I don't recommend talking to them).  

Originally posted by @Jennifer Donley :

@Jonathan Scheeler I have a portfolio of Section 8 properties in the St. Louis area.  I get 5 to 10 percent more in rent that I would from market tenants.  I'm not exactly sure why but in some areas, this is the case (my properties are B and C class houses/neighborhoods) and it's not unique to my part of the world.  Do a little research and looking around even here on BP and you'll see other people talking about pockets with higher Section 8 rents than market rents.  This seems to be the case more often in B to D class areas than A areas (generally I see that Section 8 rents for A areas are below market rents).

From my experience, the "rent reasonableness" test is what matters for Section 8 rents, up to the FMRs, meaning the HA is going to go off of what's reasonable for the area based on comps, up to the FMRs.  The comps our HAs use aren't accessible to the public (silly) but they are higher than the ones I come up with so I don't complain!

I'd recommend finding a landlord that is SUCCESSFUL with Section 8 in the areas you're in to see what they get for rents (I capitalize successful because I talk to a lot of landlords who hate Section 8 and I don't recommend talking to them).  

thanks Jennifer! This is very helpful, as that is exactly what I am looking for and to grasp a better understanding of the huge disparity between HUD/HA FMR's, current market rates, and S8 rates. Hoping to find that local landlord to assist :-)

Very much appreciate your insight !