Top dollar for Section 8 Rental

[Brandon Heimsoth]

I'm looking at buying a property that is already rented to a Section 8 tenant. In talking with the owner, HUD pays 100% but it sound like he hasn't requested a raise in rents for 4 years. I'm wondering if I can request a raise but I'm not sure I fully understand yet how HUD determines acceptable rent.

I went to https://www.huduser.gov/portal/datasets/fmr.html#2020_query and queried for St. Louis County, MO Fair Market Rent (FMR) of a 3 bedroom. For 2020, the number is $1185. I'm wondering what this FMR number really means. Is it a ballpark figure? A maximum allowed? Market rent for the house I'm looking at is probably $1150 so it's close. But when you talk St. Louis County as a whole, it's a very broad market.

From what I read, it sounds like the FMR includes estimated utilities (gas, electric, water, sewer). The current owner pays water/sewer and tenant pays gas/electric. So, let's say the estimated gas/electric bill is $150. Does that mean I could set rent at $1185-$150 = $1035?

Thanks in advance for any advice you can give.