Hi everyone, I'm a new investor making my first offer on a 2 unit MF in Rensselaer. 3 brs in the area seem to go for around 800/month, but Section 8 says they will pay 1300/month. I was just curious to know if anyone has had experience with Section 8 in the area. I'll be needing a full team of handypeople, plumbers, painters, contractors, electricians, once I close to get the place ready to go, and would really appreciate it if you have any favorite people you'd like to recommend. I'm planning on managing the property myself, currently from Westchester and ultimately NYC, so it will be important to make sure I'm finding good solid colleagues to work with. Thanks in advance for your help, I'm very excited to immerse myself in the Capital Region / Albany markets!
@Steven Kane congrats on the upcoming purchase. My experience with Rensselaer county section 8 has been fairly positive. Take the initiative when it comes inspections and paperwork and you'll be in good shape.
@Steven Luttman great to hear! Sending you a message now
I don't have any experience to share, but I attended a Landlording class from AHP Home in Albany and a panel member was part of that program. They said the waitlist was years long and there were many folks waiting to get onto it, and this was pre-covid. Not sure if this has something to do with the price discrepancy or not, that's a big difference! You might be able to call and talk to someone there if you wanted. They don't have any upcoming classes but I found it was a great help for self managing my first property. I'm sure there are probably other classes closer to you and maybe virtual although they might cover additional rental regs for NYC.
When you say Sec 8 says they'll pay $1300/month, who/what exactly does that mean?
Usually the local H/A will take the HUD FMRs for the county and use those for voucher guidance. Why they'd pay like 40% more than market-rate seems optimistic at best.
@Steve Morris that’s what their pricing breakdown shows and it was confirmed by the local administrator. I was surprised as well!
@Samantha Cash thanks Samantha I’ll check it out!
@Steve Morris sorry didn’t post the link—
I was looking into section 8 for tenants. You also have to look at what the section 8 intails. It might also need you to pay the water, garbage or electricity or some kind of combination. Look a little bit more into it. You usually in these times send an email with your questions to a section 8 administrator and they will respond with some answers or to a website to answer them. I received an email with links to the section 8 website directly to the answers for my questions from a section 8 administrator.
I've seen the links since I use them for OR counties. What county is Renssaler in? Do you know how much you have to take out for UAs?
@Steve Morris gotcha. Yeah Rensselaer is in the county of Rensselaer. Right I was talking to the local administrator and she said something about it ending up around 1200 due to all utilities being included in that 1389. I’m a bit confused as to whether or not I can just list it at 1200 and specify utilities not included. I’m not sure if Section 8 will then only pay 1200 including utilities. Does my question make sense?
Usually they'll set a FMR number (in Renssaler I saw $1313 for a 3 bed). This is the max HUD will give a voucher for if rent (ie no utilities) is the ONLY bill the tenant pays. If you make them pay for water, electric (and whatever that includes like stoves and Cadets), then there is a U/A that reduces the $1313.
Local H/As can kick in extra, but the HUD part is supposed to be limited by those FMRs and UAs. Usually, unless the FMRs are waaaaaay below real market, the H/As like extra money to issue more vouchers and not increase the amount of existing vouchers, but that's a local thing.
@Steve Morris , thanks so much for your time and expertise this is really helpful. The FMR was $1313 in 2020, and is $1389 for 2021. It's possible my initial comp search was wrong that 3 beds go for 800, though I've talked to numerous investors in the area who all offer "below market rents" for around 750-850 for 2 beds. So it seems 1100 will be a fine rent for 3 bed, especially considering the FMR is $1312-$1389 from 2020-2021.