Raising Rent on Section 8 Tenants

[Hoang Bui]

Hi everyone, was just wondering how you would approach raising rent on Section 8 tenants. I currently have one inherited Section 8 tenant whose rent is about ~30% below FMR. The current tenant is paying $1,100 for a three bedroom plus office space plus basement access plus garage (no utilities included). They also have two cats. The FMR that I checked for a three bedroom in my area is about ~$1,500.

The tenant has been there for a number of years (10 years plus). How would you approach raising the rent on this tenant given that they might be responsible for only a fraction of the rent? Do you bring the rent up immediately to the market rate? Or do you still raise the rent in increment? 

My only concern is that if I raise the rent up to the market right away, this might affect the tenant-landlord relationship, especially as I will be moving into one of the units, and also want to keep the tenant there. What are some of the considerations when raising the rent on Section 8 tenants? 

[Steven Hellinger]

@Hoang Bui

I was in a similar situation. I had 5 section 8 tenants in my building that were under market rent about $150 each. I spoke to each one of the section 8 coordinators and gave them 60 days notice of the rent increase. None of my tenant really cared since they did not pay any addition rent out of pocket. The entire increases were paid by section 8.

Good luck