All Forum Posts by: Bradley Bogdan

 Your tenant's portion of rent is $140, her income is $506, thus her income is roughly 4x the rent. The point of a 3x the rent requirement is so that even if there is an emergency, the tenant will still have sufficient funds to make rent. Your tenant will never be responsible for a rent payment of about 1/3 of their income, thus always meeting that requirement. 

That's a common misunderstanding of the voucher. The voucher is not a fixed amount, it varies so that the tenant will be contributing ~1/3 of their income towards rent, with the voucher/PHA/HUD contributing the rest, so in essence, everyone with a voucher is making 3x the rent.

Not from Indy, but working for one of those voucher programs has given me a first row view to quite a lot of blatant discrimination against low income tenants simply because they have a voucher. I know many investors here don't like the low income end of the market, and that's fine, there are unique challenges to dealing with the lower end of any market. I've never seen an ordinance that prevents landlords from taking reasonable precautions through screening to ensure tenants have a good rental history, have a stable income, are not felons, etc. If you're really against participating in the program, don't own low income rentals, raise your rents, etc. There are plenty of ways to avoid Section 8 even in markets with income discrimination laws. 

If it really is a competitive issue for your rentals, then I would look at structuring it in such a way that you don't take on the risk. A couple local landlords I know don't have split meters for utilities, but write in a flat % split between the two units and bill them each month. You can even let the two tenants haggle over what the split will be, and if they can't come to an agreement, you can just leave the answer at "no". Ultimately, you're probably not going to be burned by the laundry issue and overuse, but why even open yourself up to the possibility? If you can find a way to leave the water use liability in the tenant's hands, go for it, otherwise, I'd leave it at NO.

So the short answer to your question is: It Depends. As some of the other folks here have noted, that $2682 also takes into account utilities, so if they're not included, your rent amount will go down. Also, PHAs have the ability to lower what their willing to pay for rentals in certain areas of their territory, if they don't believe rentals in that area are worth as much as their overall cap allows, ie if the market rate for a city is $1000, but one bad neighborhood has a market rate of $800, they have the ability to not approve $1000 rentals in that neighborhood as its above market rate. The larger the PHA, the more likely this is to be the case, as the program is not designed to pay over market rate for rentals, though occasionally it works out that way. Lastly, no section 8 voucher is for a set amount. They are issued by family/bedroom size and that corresponds with the FMR for your area, so even if the tenant says they have a guaranteed amount, they do not. It all comes back to whether the housing authority approves whatever you're charging as reasonable for your neighborhood and affordable for the tenant once utilities are included in the equation.

@Colleen F. Working with low income folks, usually fixed income, as a day job, I've never run into an instance where Social Security wants the contact info for someone's landlord. The only things I can imagine are that she has a payee and they need to know who to pay her rent to, or she's in some sort of rental assistance program, and they need to know who to pay rent to. Either way, I can't think of an instance where you or your address would need to be involved, that's what you're paying the PM for. If she persists, tell the PM to contact her and figure out what she needs. Your PM should (though most don't) know who her Social Worker is to have someone to call if the tenant ends up having issues. 

PS It sounds like, from your description of her, she very well might have a learning disability, which would up the chances she has a payee. 

@Jeff J. is spot on. Give whatever length notice is legally required for your area (may be 30, 60, 90 or something else depending on locality and length of time lived there) and then just end the rental agreement. Definitely also give your PHA a heads up, as they'll likely keep sending you money if you don't (most tenants don't communicate well with their PHA worker), and they're usually VERY persistent about getting it back. 

@William Price I actually just had such an occurrence with one of my HUD-VASH clients. He has lived on his Social Security income for the last 20+ years and has avoided credit entirely over that time, not wanting to accumulate debt he couldn't cover on a low income. Unfortunately, the responsible actions of careful budgeting and of only spending what you have is biting him now as many property managers won't rent to him. Ironic, huh? Now, not everyone that has no credit has the skills to be a good financial manager for themselves, they may have had no income for most/all of their life, but I see it much more often as a plus rather than a minus.

As for rent portion, @Dawn Anastasi is spot on. I always tell people that explicitly stating you are going to chose someone based on a higher subsidy is playing with (discriminatory) fire. Unless their income is VERY low, estimating that they'll be responsible for paying you about 33% of their income is a good rough estimate. Depending on the size of the unit and local utility rates, $100-$200/mo of tenant income is usually the cutoff point for having a tenant portion of rent or not. 

I would worry that only renting to those folks with 100% funding through Section 8 might be a form of income discrimination. Obviously I'm not a lawyer, but I would have trouble making a cogent argument to tell a judge that you aren't willing to take low income people, but you're willing to take high, medium and no income people. Just a thought. 

As for suggestions of incentives, you can use some of the upgrade ideas in the Section 8 Bible as incentives for being good tenants, but I wouldn't make any formal agreement upfront about it. That seems like it would have huge potential to be misunderstood by a tenant who then gets super angry, goes to court, etc.  

This is insane. I don't understand how this is possible. I wish the courts themselves had a responsibility to compensate those who they can't adjudicate for in a reasonable amount of time. It might inspire a sense of urgency.