section 8 tenant

[Wes Brumit]

Have a lead on home that currently has a section 8 tenant. The tenant has been there 7 years, owner says not likely to leave. Rent is $600, he wants $32,000. If I should rehab ARV = $78,000, rehab=$17,500. Would you buy and keep the cash flow or rehab and raise rent or resell? Home is 1600 sqft.

[Marcia Maynard]

Sounds like a good buy with great potential either way you go.

About the option... "HA to find the tenant a new home"... I never knew of a HA case manager doing the looking for the client. I have good experiences with Section 8. Here's how it works here:

If you do the rehab and raise the rent, you will need to give the proper notice to both the tenant and their case manager. For us that is 60 days. The case manager will do a review of their client's financial situation and if they deem the unit is still affordable for the client they will notify you with a "subsidy change notice." This letter will show you the new amount of rent portion that Section 8 will pay and the new amount of rent portion that the tenant is expected to pay. These amounts combined will equal the amount of your new rent. If you raise the rent too high for Section 8 affordability, the case manager will notify you that the unit will no longer meet their criteria and their client (your tenant) will need to find a different place to live.