Anyone help me "guestimate " what hano will pay
Hi!
Im under contract on a 4 bedroom in 70112 on Iberville st. Hano website says they will pay UP to 2618 but that rents will vary. In your experience how close to this number can I get or is it actually possible to receive this amount? Any other experiences regarding hano positive or negative are also greatly appreciated :) THANK YOU!
Hey Rob,
This is a good question, and I suppose my short answer would be no $2,618 is not a reasonable amount to expect from HANO.
There are a couple of factors to take into account when looking at the amounts HANO is willing to pay, and I provided a few items below.
Correct Voucher
If you are wanting to rent out a 4 bedroom home, you are going to want to make sure that the potential tenant has the appropriate voucher. It is often difficult to find tenants that specifically have a 4 bedroom voucher, in some cases you will have interested tenants that only have a 3 bedroom or 2 bedroom voucher. These circumstances would obviously reduce your potential rents.
Must Qualify as a Bedroom
To qualify as a bedroom for HANO's purposes you must have a closet in the room. Often times in New Orleans I have found not all rooms have closets.
Zip Code Consideration
Looking at Zip Code 70112, you can see that it includes areas that span from the Quarter to the Treme area. The price HANO is providing is quite high if your property is anywhere outside the Quarter, however, it might be more reasonable if you are talking about a property within the Quarter.
HANO Guidelines
I've provided the link below, but here is the important part: "To calculate the approved rent, HANO compares the owner-requested amount to the rents for private units with similar features, amenities, and location." They also mention the Maximum Initial Rent Burden: "The approved gross rent (owner requested rent and the HANO allowance for tenant paid utilities) cannot result in the tenant having to pay more than 40% of their adjusted monthly income toward rent."
http://hano.org/Landlords/Payment
Maximum Initial Rent Burden
I haven't looked at this in depth before, but this qualification seems to make those prices an impossibility. At $2,600 a month rent the tenant is paying $31,200 annually, and to qualify to pay this amount it has to be equal to 40% or less of their income. Meaning, the tenant would have to make at least $78,000 a year. (31,200/.40) = $78,000
This would disqualify them for assistance most likely if they were making that kind of annual income, and assuming I am not missing anything else.
My HANO experience has been poor. I've had good and bad tenants, mostly the latter, but the vetting of potential tenants can help a lot. The initial process to have a lease signed is more cumbersome with HANO than if you were to sign a lease with a non-HANO tenant. Overall, it is HANO's job to protect the tenant and their priority is the tenant, and it was this realization that led me to my current poor opinion of the organization.
My personal estimate of rent varies by condition of the property, location (down to the cross streets), and current market prices. I'd look at Craigslist to do some price comparisons of the area considering potential affects of the market from COVID-19. Rough estimate of monthly rent to expect (1400-2200).
Scott thank you so much for your in depth answer I REALLY appreciate it. Yes My unit is NOT in the french quarter so 2618 would be very high for it. I never really though I could get that but say I can get 2200 I would still be very pleased and am wondering if I can get that or around that. I think market rent could be 1600-1800 so I dont see Hano as a good option much less than 2200.
But having to find a tenant approved for a 4 bedroom voucher is GOOD to know. Thank you for letting me know your experience. If I do go down this path with them I will try to vet the tenant as much as possible.
It seems like the only way to know for sure is to list with them and see what happens? From what you are saying 2200 might be a bit optimistic which is the amount I'm really hoping for in all honesty
The closet is good to know. Im actually not sure if My unit has closets in bedrooms which is a factor I need to consider and consider adding if they dont have.
@Rob Ayala If you think that market rent is $1600-1800, why would you think that HANO would pay more than that. They won't. I don't do section 8 rentals, but am familiar with the rates, as it sometimes affects pricing. Additionally, be careful with these high priced section 8 rentals, as the tenants will often times be responsible for a portion of the rents, and in our city, that usually means its not collectible, as often section 8 tenants have the opinion that you got your money from HANO, you dont need mine.
Rob,
The numbers I mentioned were just a guess at what potential rents could be. You will have to do some research before you can really determine what rents are reasonable.
Originally posted by @Mike Wood:@Rob Ayala If you think that market rent is $1600-1800, why would you think that HANO would pay more than that. They won't. I don't do section 8 rentals, but am familiar with the rates, as it sometimes affects pricing. Additionally, be careful with these high priced section 8 rentals, as the tenants will often times be responsible for a portion of the rents, and in our city, that usually means its not collectible, as often section 8 tenants have the opinion that you got your money from HANO, you dont need mine.
okay mike. I knew someone where hano paid more than market rent on a 3 bedroom. But if that was a unique situation Im not sure why anyone would be a part of the program if you get paid the same amount as a market tenant. So if thats around what I can actually get then I will have to move on from them
@Rob Ayala Most do it as its automatic rent in marginal areas. There are some areas of our city were you will have a tough time renting market rate but can easily rent out in section 8. You generally don't get a premium for section 8, maybe a small amount more, but generally its market rent upto the HANO limits.
Originally posted by @Mike Wood:@Rob Ayala Most do it as its automatic rent in marginal areas. There are some areas of our city were you will have a tough time renting market rate but can easily rent out in section 8. You generally don't get a premium for section 8, maybe a small amount more, but generally its market rent upto the HANO limits.
that makes more sense. Thanks for your insights Mike