How Section 8 Numbers work?

Question

I would like to get some feedback from anyone on some Qs. I have a property here in Baltimore that I am looking to rent with Section 8. (3 Beds 1 Bath). I am very new to this, and aware of some happy endings and disasters.

Qs. Would I be able to rent the property basically for whatever the voucher is for or whatever I decide?

E.g.

1.
If I want to rent the property for around $1200.00, and one person has a voucher for $1000. I can only rent it for $1000.00, not for $1200.00. Who is the decision maker here ? How is the difference collected (if there is any)

2. If I am in agreement with the voucher let say for $1000.00/m, and if I am correct the tenant also gets the utilities paid by the government. Will I get $1000.00 minus what
the utilities are or the utilities are in addition to rent or how does this wok

Please assist. I am really confused. None of the books explain the number process.

Eddie T. · Answer

@Amir Saeed I do not believe any of these posts have given you a clear answer so let me try to help.

Their are two things that matter in this circumstance #1 how many bedrooms the tenants voucher is for and #2 what is their maximum allowable rent that section 8 will allow them to pay based on their income.

To your first question If you accept an applicant that has a voucher for $1000 that is the maximum amount that your housing authority will allow you to put on the lease, so in essence you will lose out on the extra $200 a month. It is against their policy for you to enter into a separate agreement with the tenant to collect the difference, if you did that and they find out they would ban you from the program.

Now depending on what utilities are provided by you as the landlord yes it is possible for you to receive less then $1000 if the Housing Authority needs to subtract some utilities from the tenants monthly budget.

So if I were you I would not rent to someone who did not have a voucher for the full amount of rent you are asking unless you are asking an inflated amount that is not inline with what your rental should actually receive.

You should purchase the Section 8 bible book it is a great book for learning about section 8.

Mike Makkar · Answer

30% of my rental portfolio rents to Section-8. Its pretty straightforward. Make sure to maintain your property and pass inspection. Section-8 has a list of zip codes and acceptable rental rates. These rates could be higher or lower than market rates and depends on where the prospective tenants get their vouchers from. For eg. in the dallas metro, Section-8 vouchers are issued by 6 different counties and 20+ cities and the voucher holders can live anywhere in the DFW area. The voucher rates are different for each of the issuers and varies with BR/BA count. Some city vouchers tend to be lower and some counties tend to be higher. Moreover, inspection standards also varies with different issuers. However, once you have a tenant in place and with good landlording behavior, the tenant can request for voucher increase whereby you could benefit every year.

If you would like to know more, ping me and I can share more of my section-8 experiences.

Tarik Larue · Answer

Greetings Amir,

I just rented two townhouses to Section 8 tenants this year through a property management company. You can advertise the property for whatever market value rent that you want to. However the Section 8 office will offer you the amount that they think is best after they complete an inspection. For example I listed my 3 bedroom 2 bathroom townhouse for $1600 but they offered me $1,335. I believe this is based on size, amenities and overall condition.  The utilities are placed in the tenants name (except for water) and I believe the government will assist them in paying that too. Sometimes a small part of the rent comes from the tenant but this is all explained in the Section 8 offer. You can always consult with a local PM company if you need further information. Good Luck.

Tarik LaRue

Mary Urban · Answer

I'll check out rentometer, thank you!

Financing through a partner...and looking at most likely range that section 8 would pay to ensure that my annual cash flow is worth investing in that particular neighborhood after rehabbing the property, insurance, repairs, etc.

Sarah Ziehr · Answer

The rental amount has to be in line with market rents for your area.

As far as collecting an additional $200 per month from someone who is on housing assistance, in this market a lot of Landlords flat out reject the notion and would deny the applicant. If they are on assistance and not working, where will that extra $200 come from?

Amir Saeed · Answer

@Mary Urban

What I have done in the past (I am still new to this) ask around the neighbors and get a feel of what the rent is going around. You can get a rough idea. From what I am reading Section8 rents can vary based on amenities that are present, and the condition of the property. You can also go to this site "https://www.rentometer.com". This will also give you an average rent in that area.

You mentioned "If I can get 1300 for section 8 then it makes sense". Are you financing the property or you are paying cash. What factors you are considering to mark you rent at $1,300.

Mary Urban · Answer

@Amir Saeed

Hi Amir - what base rent were you using to see if the property was worth purchasing? I am considering purchasing 3 bedroom TH in the Montabello area near City College and hoping to use a baseline rent to see if it is a good investment. If I can get 1300 for section 8 then it makes sense, but any idea how you determine the rates of a particular neighborhood like that?

Thanks for the helpful discussion!

Melissa Gittens · Answer

Great question. Thanks for posting!

Gail K. · Answer

Eddie T is correct.  The Housing Authority decides how much rent your unit is "worth" based on the number of bedrooms.  You don't like it?  Tough noogies.  Depending on how tight the market is in your area you can, at times, get them to pay you more than what they believe the "market value" is but at times (when their money is tight) they will reduce what they will pay (and, once again, tough noogies to the landlord).

We were able to increase the rent on our one Section 8 rental (when we participated in this program) by (gasp!) all of $25 a month but it took two years of trying to get this massive increase.

There are Section 8 applicants who will call and ask if you will take these vouchers and when you explain your rent is several hundred dollars over what Section 8 sets as "market rent" they will gladly offer to pay the difference under the table (makes one wonder if they can do this why they need to be on public assistance in the first place).  I am certain there are many landlords who do this; however, it is illegal; once you agree to this program you are obligated to follow what Section 8 states in terms of what rent you will charge (whether they pay it all or they pay part and your tenant pays a share).

Some landlords will, however, "rent" appliances such as washers and dryers to tenants (these are not required to be provided by Section 8)  to make up for what this program sadly, determines is "market rent" for their area.

Gail

Ned Carey · Answer

My partner handles section 8. I have never even seen a section 8 voucher.  However everyone talks about how many bedrooms the voucher is for. i don't hear people talking about any amount on the voucher.

My partner goes to the section 8 office to negotiate a rent price which is in large part do to the amenities and condition of the house which will be noted by the inspector.

I would contact the section 8 office. It can be hard to reach them by phone or get an email response. Often it means going down there during walk in hours.

How Section 8 Numbers work?

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