Hey everyone. Does anyone have experience with rents from Section 8 / Housing Choice Voucher tenants. The payment standards for my area that are posted seem to be high.

People I know, say that a 3 bedroom house in our area goes for around $1500 a month. But the payment standard (below) says a 3 bedroom would be around $2,353. I know that Section 8 does a area rent reasonability study. However, I'm wondering what you all's experience has been with the difference between actual rent approved by Section 8 vs. their posted Payment Standards.
  Bedroom Size - Payment Standard (Taken from the PG County Housing site) Efficiency $1,504 1bedroom $1,561 2 bedroom $1,793 3 bedroom $2,353 4 bedroom $2,902 5 bedroom $3,337 6 bedroom $3,773 7 bedroom $4,208
Follow-up question: Can you ask for a potential tenants actual voucher to see what rents they have been approved for?

@Tiana O.

I have not had many interactions with people on Section 8, but I have had colleagues who had rented out to Section 8 tenants. It seems HUD has its own standards on what they think is market rate rent for a neighborhood. Often than not they would pay higher than the average rent in the area. So whatever they say they will pay you for rent and it satisfies you, TAKE IT.

Follow up question: I am pretty sure you can ask the tenant or preferably the Section 8 program directors how much the tenant would have to cover.

Hope this helps.

My town has a housing office and they set their rates at market rates. That being said, I live in an upscale town- but my rental houses are average, smaller in size and without luxuries (granite etc). I can get higher rents if I rent to sect 8 since private pay tenants want more luxuries for the same rental amounts (they want more for their money).

They are real. Dm me. I've signed up and have two current tenants in the program. I'm making a ton of money now. I love in DC, too.

In DC, the tenant will have a voucher in hand and a bedroom number assigned to them on the form. If you have a 4 bedroom house (70 sq/ft with ceilings a tenant 7'+, window, door, closet) then you can collect up to 4 bedroom rent but if the tenant is only approved for 3 bedrooms you will only receive 3 bedroom rents. You can go to the DCHA.org/rent website and look at your neighborhoods rent rates for the bedrooms assigned. Look at your tax bill for the actual neighborhood you are in and not the neighborhood you think you might be in (I have seen some weird things with this). You can also vary between including utilities or not. 

If it sounds like something you want to do then you have to submit a new owner lease up package to DCHA and have the home inspected before a tenant can move-in. I am doing this know for a client and we are on week 5 (mostly because DCHA is painful and because it was over the holidays). 

@Tiana O, I have no experience with Section 8 tenants directly, however, I have colleagues who have. The HUD payment standards are real and verifiable, however, the difference in payment comes from the tenants actual income. Meaning, the tenant pays 30% of what their income is, and HUD will cover 70%. So, if the tenant has income, meaning a job, then 30% if their income will be delegated towards the rent. You as the owner are expected to collect the tenant portion. If they lose their job, and their income goes down to $0, if the tenant reports a change in circumstances immediately, HUD will cover the rent at 100%. In addition and depending on the written terms, this may or may not include utilities.

The rents paid by HUD are super desirable in a region like the DMV, however; I would caution you to take the necessary precautions that you would take with any other tenant, i.e. rental history, credit check, background check, and if applicable, employment verification.

I have 8 units with section 8 tenants and there are a lot of misconceptions on how the payments are figured out. The Payments standards you can find online are a maximum payment for a perfect house in a perfect neighborhood with the landlord paying all the utilities. A tenant gets a voucher that is good for a bedroom count only, its not for a set amount of money for rent. The voucher provides  flexibility to be used for a 2BR unit that the tenant finds that will meet their criteria. With the voucher in hand they can get a 2BR apartment, townhouse, condo or single family house. Your payment for each option may vary based on the area, size and amenities. You can ask the inspectors how the grading works and some will even show you the worksheets they use to analyze your property. The biggest variation i have seen is in how they grade the area on a good, better, best type system. i have had the same property graded differently by different inspectors and had to fight them because they tried to offer me less in rent than the previous section 8 tenant was paying. 

Your can post your listing on gosection8.com and  when its posted you can then access and option that will show you what they are paying in your surrounding area. Make a free fake ad just to check the rents then put it on inactive status until you are ready to rent it for real. Trying to get them to tell you what they will pay before hand is hopeless. If you know other landlords in the area, ask what they are getting and look at their places. I have had to politely argue with section 8 case workers sometimes and they can make mistakes in the calculations due to them not giving me credit for paying for water and sewer or the upgraded condition of my properties. Be aware though that the case workers often dont care if you accept their rent offer or not. I have only rejected 2 offers i was given but i asked for another rent comparable review and had the tenant complain loudly and ask for assistance in getting the rent bumped to a level i would accept so they can move. 

Check your market rates vs the rates section 8 will pay. These days in half decent areas, market rents are very close to what section 8 pays other than rougher areas, where section 8 will usually pay more. 

I have the exact same question! Nothing I'm finding gives a clear answer to this. I went to a local section 8 county landlord meeting and they weren't really able to answer this question either. Just sent a follow-up email to the county landlord liaison and will let you know what they say. 

@Tiana O.

The market rates are generally on the high side.  Remember you have to back out utilities and they still analyze the market rent for the area.  The numbers are based on per zip code.   

The SEC 8 rent approval calculation is complicated.  To save my fingers from typing every time this question is asked on BP, I put it in a blog.  Here’s is the link.  https://www.biggerpockets.com/...