Purchasing a rental with section 8 tenent already there

[Marty Summers]

Investors,

Here is my scenario:

-- Looking to purchase a SFR for 58k & ARV is 90-100k. It's a 3 bed 1 Bath.

-- There will be a section 8 tenent that has lived there for 6+ years paying $650.00 per month total.

-- I think I am committed to keeping the section 8 tenent but she is under market rent for this house.

Is this a good idea?

Any issues I am not thinking over correctly?

Can I raise rent at least 50-100 per month?

Can I ask for my property back if I renew her lease for a year?

Any other thoughts suggestions are appreciated!!

Thanks

-Marty

[Andrea Weule]

First, I love Section 8, but that rent seems low.  I'd follow up with the Section 8 office to see what the rate is and terms, etc.

Second, if the tenant has been there for several years that's great for longevity for the rental, but could be tough on the condition.  I'd definitely have it inspected.  

As for the rate, again that seems low.  I'd really dial in your numbers as with taxes, insurance, maintenance (property management - if you use it, utilities - if you have to cover any, etc) this could be hard to cash flow.  

Finally, as for raising the rent with this tenant, you'd have to work that out with the tenant and the Section 8 office.  As for asking for the property back - if you sign a contract (lease) you're bound by it, unless they do something grossly wrong.

Best of Success!