Landlord advice needed with section 8

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Okanedo
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Landlord advice needed with section 8

Post by Okanedo » Tue Aug 07, 2018 10:58 am

Hi there!

I have been a landlord for 3 years and I have been working with a section 8 tenant. The family is wonderful, I have never had an issue.
M issue though is with the program. I have not been able to raise rent at all because they have a moratorium in place, and now more even so with all the cuts to social programs.
Now I am getting hit with more real estate taxes. I am facing a $200 increase per month. I'm still clearing out about $300 a month, but I am losing $200 due to taxes...I definitely need to raise rent. Market says I could get about $1,800 to $1,900 a month and I am still at $1,500.
My contract expires in November but there is the moratorium with section 8. However, it seems like for new tenants the program does allow current rates. In other words, I can't raise rent to the current tenant, but if I get rid of my tenant and get another one it seems like I would be able to charge the current rates; not sure.
I'm in a west Chicago suburb.
Any word of wisdom is appreciated.

Thanks!

BogleMelon
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Re: Landlord advice needed with section 8

Post by BogleMelon » Tue Aug 07, 2018 11:27 am

Since this is a financial forum, so I will assume you ask for a financial advice. Financially: don't renew the contract and get another tenant. $1800 will be greater than $1500! You can then donate the extra $3600/yr (or a part of it) to a charity that cares for homeless people, if that would make you feel better.
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jminv
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Re: Landlord advice needed with section 8

Post by jminv » Tue Aug 07, 2018 12:29 pm

You should ask this question over at biggerpockets since you want someone familiar with the Chicago housing authority. It does seem like CHA has a procedure for approving rent increases although they might not grant one. Since it wouldn't be a new move for the existing tenant, the increase would fall on the tenant rather than the CHA since they don't take afforability into account, just market analysis. If the existing tenant couldn't afford the increase, you would end up with a new tenant anyway.

If it's true that there's no way to raise rent on the existing tenants due to a moratorium of some kind, I would find new ones. You are running a business and need to make a profit. You could also sell the property to avoid the uncertainty about whether a new tenant is a good tenant.

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dm200
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Re: Landlord advice needed with section 8

Post by dm200 » Tue Aug 07, 2018 12:31 pm

jminv wrote:
Tue Aug 07, 2018 12:29 pm
You should ask this question over at biggerpockets since you want someone familiar with the Chicago housing authority. It does seem like CHA has a procedure for approving rent increases although they might not grant one. Since it wouldn't be a new move for the existing tenant, the increase would fall on the tenant rather than the CHA since they don't take afforability into account, just market analysis.

If it's true that there's no way to raise rent on the existing tenants due to a moratorium of some kind, I would find new ones when their existing term is up. You are running a business and need to make a profit. You could also sell the property to avoid the uncertainty about whether a new tenant is a good tenant.
No knowledge or experience - but maybe a large landlord dealing with Section 8 might have a solution.

Don't Section 8 recipients have some sort of case manager or social worker?

DarkHelmetII
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Re: Landlord advice needed with section 8

Post by DarkHelmetII » Tue Aug 07, 2018 12:40 pm

Novice to moderately experienced landlord here (5 yrs of a single property across two tenants using a professional management company). My input: if you plan to sell the property in two years or less, keep these tenants at the below market rate. Otherwise, move on to new tenants.

Rationale - let's say you raise rent only to $1700 (being conservative) for a new tenant, you are still taking in more than one month's rent extra per year (rule of thumb I have heard kicked around). And at that price you presumably could be quite picky.

Over the long-term (for purposes of conversation 2+ years) not calibrating the rent upwards is just going to continue to erode the financial viability. Risk with new tenants? Absolutely, but with appropriate screening etc... make it a worthwhile and calculated risk.

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hand
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Re: Landlord advice needed with section 8

Post by hand » Tue Aug 07, 2018 1:04 pm

Tax Question: If you are demonstrably below market due to the Section 8 moratorium, does the difference count as a charitable donation? (I suspect not, but perhaps?)

Contrary Opinion: If you are currently renting to Section 8 tenants, your perspective tenant pool (even at market) is likely challenging at best. For ~$300 / month, I don't know if I'd risk turning away good tenants, risking terrible tenants (plus vacancy costs, plus standard fixup costs, plus additional/ new Section 8 requirements) and perhaps burning a bridge with a government program. Significantly under market is not sustainable forever, but perhaps you can hold out until moratorium is lifted?

Not sure if it is kosher with Section 8, but perhaps letting the current tenants know that they Section 8 is currently paying under market and your continuation with the program is dependent on the property being exceptionally well maintained would result in the undermarket rent being offset by less than expected wear and tear to the property.

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knpstr
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Re: Landlord advice needed with section 8

Post by knpstr » Tue Aug 07, 2018 1:15 pm

I don't deal with section 8 but either get a new section 8 tenant or rent it to someone that isn't in the program.

Obviously you shouldn't be paying someone to stay in your place -- that isn't a good business model.
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Okanedo
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Re: Landlord advice needed with section 8

Post by Okanedo » Tue Aug 07, 2018 5:24 pm

Thanks for all the replies.
I have been thinking about a lot of these options for days, trying to settle my mind before any decision.
I am definitely not planning on selling; I look at this income as part of my portfolio and future retirement.

I had thought about the possibility of the extra rent falling under the tenant responsibility, but I am not sure if the program will allow it.
I am definitely not taking the hit of higher taxes, especially since I have not raised rent for 3 years.
It's almost two extra months of rent I am leaving on the table!
Thanks for the suggestion of Biggerpockets. I had forgotten about that site although I signed up few years back.

Thank you for your generosity and time!

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dm200
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Re: Landlord advice needed with section 8

Post by dm200 » Tue Aug 07, 2018 6:57 pm

Can you, unilaterally, just kick out this tenant - for this reason?

Do you really want to risk being on the 6:00 o'clock news as the landlord that kicked out this good renter?

Archimedes
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Re: Landlord advice needed with section 8

Post by Archimedes » Tue Aug 07, 2018 7:19 pm

Maybe they are a nice family, but they are unable to pay the market rent. They need either a benevolent landlord who wants to accept below market rent, or they will have to move to a lower cost abode. Good behavior alone does not qualify them as good tenants if they cannot afford to pay the market price for the apartment.

A good tenant is both well behaved and able to pay reasonable value for rent. I certainly consider many factors when deciding whether or not to raise rent for a quality tenant, and I will often keep rent a bit below market, but this property is being rented at 20% below market. Accepting this level of rent does not make a good business plan. And asking someone to move when they can no longer afford to pay the going market rate when the lease expires is certainly not going to get you into the newspaper if handled with respect and kindness.

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dm200
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Re: Landlord advice needed with section 8

Post by dm200 » Wed Aug 08, 2018 11:08 am

Archimedes wrote:
Tue Aug 07, 2018 7:19 pm
Maybe they are a nice family, but they are unable to pay the market rent. They need either a benevolent landlord who wants to accept below market rent, or they will have to move to a lower cost abode. Good behavior alone does not qualify them as good tenants if they cannot afford to pay the market price for the apartment.
A good tenant is both well behaved and able to pay reasonable value for rent. I certainly consider many factors when deciding whether or not to raise rent for a quality tenant, and I will often keep rent a bit below market, but this property is being rented at 20% below market. Accepting this level of rent does not make a good business plan. And asking someone to move when they can no longer afford to pay the going market rate when the lease expires is certainly not going to get you into the newspaper if handled with respect and kindness.
If a landlord kicks out a good tenant to get another tenant, for which the landlord receives more (not from the tenant but from a government program) - then I believe that could get you on the 6 o'clock news. As described, this is not the tenants fault at all.

rantk81
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Re: Landlord advice needed with section 8

Post by rantk81 » Wed Aug 08, 2018 11:11 am

dm200 wrote:
Wed Aug 08, 2018 11:08 am
If a landlord kicks out a good tenant to get another tenant, for which the landlord receives more (not from the tenant but from a government program) - then I believe that could get you on the 6 o'clock news. As described, this is not the tenants fault at all.
But in this case, it kinda sounds like it is so that the county gets more (property taxes)...

jminv
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Re: Landlord advice needed with section 8

Post by jminv » Wed Aug 08, 2018 11:14 am

Okanedo wrote:
Tue Aug 07, 2018 5:24 pm
Thanks for all the replies.
I have been thinking about a lot of these options for days, trying to settle my mind before any decision.
I am definitely not planning on selling; I look at this income as part of my portfolio and future retirement.

I had thought about the possibility of the extra rent falling under the tenant responsibility, but I am not sure if the program will allow it.
I am definitely not taking the hit of higher taxes, especially since I have not raised rent for 3 years.
It's almost two extra months of rent I am leaving on the table!
Thanks for the suggestion of Biggerpockets. I had forgotten about that site although I signed up few years back.

Thank you for your generosity and time!
If biggerpockets can't give you recent advice, go to the CHA and file to increase the rent.

Stormbringer
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Re: Landlord advice needed with section 8

Post by Stormbringer » Wed Aug 08, 2018 2:22 pm

I have had lots of section 8 tenants over the years. Generally speaking, my policy is that I charge market rents ... period. If the housing authority won't approve it, the tenant needs to find somewhere else to live. Sometimes they will pay, sometimes they will not. Also, there are different programs here and sometimes the tenant can pay the excess.

Section 8 comes with enough baggage already, including extra paperwork and inspections, their lease instead of yours, etc. Discounting the rent is a bridge too far for me.
"Compound interest is the most powerful force in the universe." - Albert Einstein

HEDGEFUNDIE
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Re: Landlord advice needed with section 8

Post by HEDGEFUNDIE » Wed Aug 08, 2018 2:35 pm

The OP said his property is in a west Chicago suburb that has implemented a rent increase moritorium. This very likely means DuPage County, whose housing authority is blaming the Trump administration for defunding HUD. Details of the moratorium here:

http://www.dupagehousing.org/wp-content ... 2018-1.pdf

OP, I’m in the same boat as you, with a townhome in Naperville rented to a Section 8 voucher holder. But mine has threatened to sue me several times. So you know, it could be worse.

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Okanedo
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Re: Landlord advice needed with section 8

Post by Okanedo » Wed Aug 08, 2018 9:00 pm

I will definitely go through the appropriate steps to surface again with my property.
However, I will definitely have to do something. I love my tenant and the family but I am not a non profit organization.
If she has to go somewhere else though, she, as well as section 8 will have to afford something at current rates. That's what I find ludicrous with this moratorium.
It seems like Affordable housing program wants to make up their budget on the back of landlords. I feel like I pay already enough taxes to also finance somebody else's living.
Ugh!
Thanks for the comments and words of wisdom!

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Phineas J. Whoopee
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Re: Landlord advice needed with section 8

Post by Phineas J. Whoopee » Wed Aug 08, 2018 9:19 pm

My only comment, which is not practically helpful in the present case, is those planning to start a business, including entering the landlording business, should carefully evaluate and account for their risks before committing.
PJW

simas
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Re: Landlord advice needed with section 8

Post by simas » Wed Aug 08, 2018 9:22 pm

I have read the notice you posted, thank you - how does not stop participate in the wonderful program they have set up? just because they have decided to create this notice, it does not lock you into their program forever, does it?

ralph124cf
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Re: Landlord advice needed with section 8

Post by ralph124cf » Thu Aug 09, 2018 12:13 am

I strongly recommend not renting to Section 8 tenants. Finding people who can afford the rent on their own merits will pay dividends, including building appreciation.

I have had good Section 8 tenants, but they have been a minority. I no longer rent to Section 8 tenants.

Ralph

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Sandtrap
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Re: Landlord advice needed with section 8

Post by Sandtrap » Thu Aug 09, 2018 12:18 am

Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.

Actionably: wait until expiration of lease. Send notice for non renewal at required 30-45 day depending on local code. You do not need to give a reason for non renewal. Rent to non section 8 new tenant at market rate.

j :happy

HEDGEFUNDIE
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Re: Landlord advice needed with section 8

Post by HEDGEFUNDIE » Thu Aug 09, 2018 5:53 am

Sandtrap wrote:
Thu Aug 09, 2018 12:18 am
Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.

Actionably: wait until expiration of lease. Send notice for non renewal at required 30-45 day depending on local code. You do not need to give a reason for non renewal. Rent to non section 8 new tenant at market rate.

j :happy
In some jurisdictions it is illegal for landlords to discriminate against applicants based on “legal source of income” i.e. housing vouchers.

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hand
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Re: Landlord advice needed with section 8

Post by hand » Thu Aug 09, 2018 7:20 am

HEDGEFUNDIE wrote:
Thu Aug 09, 2018 5:53 am
Sandtrap wrote:
Thu Aug 09, 2018 12:18 am
Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.

Actionably: wait until expiration of lease. Send notice for non renewal at required 30-45 day depending on local code. You do not need to give a reason for non renewal. Rent to non section 8 new tenant at market rate.

j :happy
In some jurisdictions it is illegal for landlords to discriminate against applicants based on “legal source of income” i.e. housing vouchers.
... but presumably trivially easy, and legal, to fail to meet the documentation / inspection standards set by Section 8.

AerialWombat
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Re: Landlord advice needed with section 8

Post by AerialWombat » Thu Aug 09, 2018 7:28 am

Sandtrap wrote:
Thu Aug 09, 2018 12:18 am
Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.
+1

I have nowhere close to this level of landlord experience,
but these are my same rules.

One of my current tenants came with the property when I bought it. He’s low-income, but also low-maintenance and takes good care of the property. Pays on time, every time, has lived there for 10 years now. Not section 8. I have raised his rent a tiny amount each year, but he is 40% below market.

I have made a personal choice to provide this one “affordable housing” unit to my market, and I’m happy with that decision.

All others, market rents.

Tico_75
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Re: Landlord advice needed with section 8

Post by Tico_75 » Thu Aug 09, 2018 8:04 am

Hi,

Landlord here, 6 units, C class, multi- families

I don't rent to section 8, only because of their ridiculous inspections. I may later on, they pay above market rents in my area. With Section 8, I'll have more leverage over the tenants and CHA will pay my rent if I have to evict them. They don't renew vouchers or allow transfers, so I can get them in trouble if they mess with me or my property. You need to be smart with them. This is only theoretically working, as I don't rent to Section 8 voucher holders.

You are running a business, not a charity, treat it like such.
If you can make more money, go ahead. Give them the chance to pay more. They can get a "job." Section 8 is a subsidy, not a rent cap. Once their lease expires, give them the option to renew at the market rent. Check if you have rent increase limitations where you are, if so, give them a 30 day notice and tell them you want to rehab the unit. Once out, get the best tenant you can get there.

Are you absolutely sure that's the market rent? If you got a bad deal, you can't make more money simply because you want more money (well, sometimes you can...) Check rentometer, hotpads, etc., so you understand ther market rates. Then, compare with what you should be getting despite of what you need. You can certainly try at above market rents, it may increase your vacancy, but that's fine.

Your next step is to get an attorney to contest your property taxes.

Biggerpockets is a good source to get more info, but be careful, it's loaded with "Rich Dad,Poor Dad" stupidity and gullability.

Best of luck,
"Check ID" is my actual signature.

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Sandtrap
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Re: Landlord advice needed with section 8

Post by Sandtrap » Thu Aug 09, 2018 9:17 am

HEDGEFUNDIE wrote:
Thu Aug 09, 2018 5:53 am
Sandtrap wrote:
Thu Aug 09, 2018 12:18 am
Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.

Actionably: wait until expiration of lease. Send notice for non renewal at required 30-45 day depending on local code. You do not need to give a reason for non renewal. Rent to non section 8 new tenant at market rate.

j :happy
In some jurisdictions it is illegal for landlords to discriminate against applicants based on “legal source of income” i.e. housing vouchers.
True. Perhaps in "some" places.
But telling an applicant or caller inquiring if we take "section 8" and replying "sorry we don't" is legal where I do business.

rantk81
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Re: Landlord advice needed with section 8

Post by rantk81 » Thu Aug 09, 2018 9:45 am

I'm no longer a land-lord, and I never had to deal with Section 8 (I never sought out Section 8 tenants, nor did any prospective tenants ever mention it.)

Some folks here are saying that Section 8 requires you to use a specific Section 8 lease provided by the government.
Some other folks are suggesting that in their locale, landlords cannot refuse Section 8 tenants.

How can it be possible for both of those to be true? Then you would essentially lose control of your property. You could be forced to enter into contracts that you did not write and didn't necessarily agree with!

HEDGEFUNDIE
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Re: Landlord advice needed with section 8

Post by HEDGEFUNDIE » Thu Aug 09, 2018 4:56 pm

rantk81 wrote:
Thu Aug 09, 2018 9:45 am
I'm no longer a land-lord, and I never had to deal with Section 8 (I never sought out Section 8 tenants, nor did any prospective tenants ever mention it.)

Some folks here are saying that Section 8 requires you to use a specific Section 8 lease provided by the government.
Some other folks are suggesting that in their locale, landlords cannot refuse Section 8 tenants.

How can it be possible for both of those to be true? Then you would essentially lose control of your property. You could be forced to enter into contracts that you did not write and didn't necessarily agree with!
Not discriminating against Section 8 applicants does not mean you have to accept the first Section 8 applicant you get. It merely means that if you had two applicants who looked exactly alike in terms of background check, credit report, references, and ability to pay the asking rent, you cannot say no to the Section 8 applicant simply because part of the rent payment is coming from a government voucher.

If OP thinks market rate is higher than the Section 8 rate, he should simply wait out this lease and then re-rent the apartment at the higher market price. The Section 8 renters would then be naturally priced out of that unit.

Illegal discrimination occurs when Section 8 actually pays the same as (or higher than) market rates, and landlords still refuse to rent to them because they are "too much of a hassle" or "the wrong kind of people".

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dm200
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Re: Landlord advice needed with section 8

Post by dm200 » Thu Aug 09, 2018 5:09 pm

Not discriminating against Section 8 applicants does not mean you have to accept the first Section 8 applicant you get. It merely means that if you had two applicants who looked exactly alike in terms of background check, credit report, references, and ability to pay the asking rent, you cannot say no to the Section 8 applicant simply because part of the rent payment is coming from a government voucher.
No expert - BUT that is my understanding as well.

Tico_75
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Re: Landlord advice needed with section 8

Post by Tico_75 » Thu Aug 09, 2018 11:09 pm

To cover yourself against a discrimination lawsuit, use a tenant rating scale. Income, employment, proffesion, tattoos, etc., and any other non-protected category (age,
race, religion, sexual orientation, income source, etc.) can be safely used to assess a tenant if you use the same standards to all applicants. Date and store the scale in case you get sued.

You can't refuse a section 8 tenant, but their credit score and other factors may not fulfill your minimum standards (rating scale). Never reject a tenant, rather ask them to improve or clarify their current application and tell them you are simultaneously reviewing other candidates.

Also, they can always pay you the difference if they want to stay.
"Check ID" is my actual signature.

HEDGEFUNDIE
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Re: Landlord advice needed with section 8

Post by HEDGEFUNDIE » Thu Aug 09, 2018 11:18 pm

Tico_75 wrote:
Thu Aug 09, 2018 11:09 pm
Also, they can always pay you the difference if they want to stay.
Not allowed by the housing authority. After all the whole point of the voucher is that you don’t have enough money to afford rent. If you were making rent payments on the side then that voucher (a scarce resource with a years long waitlist) should be going to someone poorer.

Finridge
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Re: Landlord advice needed with section 8

Post by Finridge » Thu Aug 09, 2018 11:32 pm

One of the best financial decisions I've made is to sell my rental and roll the proceeds into a three-fund portfolio. The ROI I'm getting is roughly similar, and it's a lot less work, and without the stress.

Drovor
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Re: Landlord advice needed with section 8

Post by Drovor » Thu Aug 09, 2018 11:45 pm

If you have a great tenant, it can be worth it to overlook the lower rent.

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boomer
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Re: Landlord advice needed with section 8

Post by boomer » Fri Aug 10, 2018 1:17 am

Well...you could always sell the place and do a 1031 exchange and buy a differentr property in an area of town that doesn't have a rent moratorium.

It sounds like the local laws are discouraging small-time landlords from being in business.

I guess you have to decide whether it is worth it to you to keep the good tenant at the lower rent. If you have an eye more to the long term value rather than the short term gain, maybe it is.

CurlyDave
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Re: Landlord advice needed with section 8

Post by CurlyDave » Fri Aug 10, 2018 1:18 am

Drovor wrote:
Thu Aug 09, 2018 11:45 pm
If you have a great tenant, it can be worth it to overlook the lower rent.
A tenant who does not pay market rent is not a "great tenant". At best they are a personable substandard tenant.

Our experience has been that Section 8 tenants are a greater risk for bad behavior than tenants who can afford the rent. The last one we had left $8000 worth of damage to the unit behind when she left. She and her skank daughters turned our rental into a combination flop house/brothel/drug emporium. Obviously not always the case, but our local section 8 agency has to understand that their failure to properly screen tenants negatively impacts their ability to place clients. Al least at our units.

From now on either the agency agrees to indemnify me for any damages, and for loss of rent while the unit is repaired, or no more Section 8.

longleaf
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Re: Landlord advice needed with section 8

Post by longleaf » Fri Aug 10, 2018 1:49 am

CurlyDave wrote:
Fri Aug 10, 2018 1:18 am
Drovor wrote:
Thu Aug 09, 2018 11:45 pm
If you have a great tenant, it can be worth it to overlook the lower rent.
A tenant who does not pay market rent is not a "great tenant". At best they are a personable substandard tenant.

Our experience has been that Section 8 tenants are a greater risk for bad behavior than tenants who can afford the rent. The last one we had left $8000 worth of damage to the unit behind when she left. She and her skank daughters turned our rental into a combination flop house/brothel/drug emporium. Obviously not always the case, but our local section 8 agency has to understand that their failure to properly screen tenants negatively impacts their ability to place clients. Al least at our units.

From now on either the agency agrees to indemnify me for any damages, and for loss of rent while the unit is repaired, or no more Section 8.
I suspect the last of those options is the one you'll end up with.

I would let the lease expire and look for non section 8 tenants; you will have more freedom and this won't be a problem in the future. The only way I'd lease to section 8 is in shack houses- they typically get torn up regardless. I learned that these are not investments when you factor in the cost of replacing the wiring and plumbing after every tenant. Plus they usually create a junkyard around the place. Even had a roof stolen once. Ended up demolishing all of these.

So, I agree with the rule of thumb to never ever lease to section 8 tenants.
Frugality, indexing, time.

e5116
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Re: Landlord advice needed with section 8

Post by e5116 » Fri Aug 10, 2018 3:19 am

dm200 wrote:
Wed Aug 08, 2018 11:08 am
Archimedes wrote:
Tue Aug 07, 2018 7:19 pm
Maybe they are a nice family, but they are unable to pay the market rent. They need either a benevolent landlord who wants to accept below market rent, or they will have to move to a lower cost abode. Good behavior alone does not qualify them as good tenants if they cannot afford to pay the market price for the apartment.
A good tenant is both well behaved and able to pay reasonable value for rent. I certainly consider many factors when deciding whether or not to raise rent for a quality tenant, and I will often keep rent a bit below market, but this property is being rented at 20% below market. Accepting this level of rent does not make a good business plan. And asking someone to move when they can no longer afford to pay the going market rate when the lease expires is certainly not going to get you into the newspaper if handled with respect and kindness.
If a landlord kicks out a good tenant to get another tenant, for which the landlord receives more (not from the tenant but from a government program) - then I believe that could get you on the 6 o'clock news. As described, this is not the tenants fault at all.
OP isn't suggesting to kick out current tenant. Suggesting to possibly not renew the lease once the current contract is expired if current tenants cannot pay market rent and then find a new tenant at that time. BIG difference and it's perfectly fine to not renew a lease for basically any reason once the term is expired. Normally, a landlord can just say "new rent is this" and if current tenants refuse, then contract expires and landlord has to find a new tenant. That's not getting "kicked out."

chw
Posts: 472
Joined: Thu May 24, 2012 4:22 pm

Re: Landlord advice needed with section 8

Post by chw » Fri Aug 10, 2018 5:09 am

There was a time in most major metros that Section 8 tenancy appeared to provide a guaranteed rental flow for landlords, generally at above market rates. The main issue was to properly screen the tenant to assure the tenant would abide by the terms of the lease. In recent years, apartments that are well located work force housing have seen market rents outstrip the rents that the Section 8 voucher program provides. Many landlords in the major metro I worked in now shun the Section 8 program, which is pushing the families further outside the metro area where rents are more moderate. I suspect as the social agencies catch on that demand for Section 8 tenants has diminished in close in metro workforce housing, the Section 8 rents may rise again (especially considering the rising tax revenues from apartment buildings) in the near future. Until then, the solution may be to no longer offer the Section 8 at the end of lease, and offer the unit to a market rate tenant(assuming the proper notices are provided to the current tenant).

Tico_75
Posts: 148
Joined: Thu Jan 08, 2015 5:36 pm

Re: Landlord advice needed with section 8

Post by Tico_75 » Fri Aug 10, 2018 8:44 am

HEDGEFUNDIE wrote:
Thu Aug 09, 2018 11:18 pm
Tico_75 wrote:
Thu Aug 09, 2018 11:09 pm
Also, they can always pay you the difference if they want to stay.
Not allowed by the housing authority. After all the whole point of the voucher is that you don’t have enough money to afford rent. If you were making rent payments on the side then that voucher (a scarce resource with a years long waitlist) should be going to someone poorer.
Double check this. When we took the CHA class in Chicago, we were told otherwise. However, it may have to do with the level of assistance this particular family gets. If they make money, they will have to pay a portion.

This is a good source of income, screening is the best tool to minimize headaches.

Landlord on Autopilot is a great book.

Best of luck,
"Check ID" is my actual signature.

hale2
Posts: 172
Joined: Sat Feb 15, 2014 5:54 pm

Re: Landlord advice needed with section 8

Post by hale2 » Fri Aug 10, 2018 2:29 pm

Sandtrap wrote:
Thu Aug 09, 2018 12:18 am
Several hundred rental units over many decades.

1. Don't rent to Section 8. (or other subsidized type of arrangement).
2. Be patient and rent to the best non-Section 8 tenants that are available. Without exception.
3. Know the landlord tenant code and all local codes and laws (state/fed/county/etc) in detail and depth.
4. See #1-3.

Actionably: wait until expiration of lease. Send notice for non renewal at required 30-45 day depending on local code. You do not need to give a reason for non renewal. Rent to non section 8 new tenant at market rate.

j :happy
+1. I never rent to Section 8. Not worth the hassle. I would rather have a longer vacancy than deal with that program.

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