Buying a Section8 property

[Joseph B.]

Considering buying a Section 8 - multi-family property, mostly 1b/1b and some studios. Im looking for information on how can I best predict the monthly rent for the section 8 units. Thank you

[Mwazomela Thurmond]

The rent for Section 8 units is a bit of a dance between you and the housing authority. They won't give the green light for a rent higher than the Fair Market Rent (FMR), but if your place is looking good or your tenant's rolling in a bit more dough, there might be some room for negotiation.

The Fair Market Rent (FMR) which is like the rent limit set by the housing authority. The FMR is a measure of the amount of money that would cover gross rents (rent and utility expenses) on 40% of the rental housing units in an area. 

For example, if the FMR for a 1-bedroom unit in your area is $1,000, you can expect to receive $1,000 per month in rent from HUD for each 1-bedroom unit in your property.

You can find this on the HUD website, and it gets updated every year. Find out what is is. 

Then use tenant income, property condition, and market rent, and cost to operate as a rental (property taxes, insurance, and maintenance costs, etc.) to go from there on how to price the unit. 

I work with multifamily investors in Norfolk and all throughout Hampton Roads, so if you're looking for someone to get you a little closer on that journey, I can help you in person as well. We can talk to some section 8 landlords and owners. And in the meantime, try a section 8 calculator to see what you can profit.