Dealing with Section 8 and Utilities

[Ryan Heywood]

I've purchased a fourplex with two Section 8 tenants in it, currently in the process of getting the government portion of payment transferred over to me. I just received a water bill for $1,100.00, it should have been $160. Seems like one of the tenants didn't think to mention the toilet was leaking. In the process I learned that in many cases you can't charge utilities to your section 8 tenants, ruling out sub-metering each unit. The rents are drastically under market, currently $575, while the local HUD office has FMR at $1,018. I was thinking of submitting a rent increase to HUD, if they accept I now have a nice cushion. If the tenant decides to move, I can get a non-Section 8 replacement and then implement sub-metering. Thoughts?