Section 8, All Utilities Paid By Tenant?
I am in the process of accepting my first two Section 8 tenants. Section 8 dept. has quoted me (3) rent amounts that they are willing to pay for a 3 bdr. 2 ba home for rent. They are as follows:
1) 549.00 if tenant pays all utilities
2) 604.00 if tenant pays gas & electric
3) 849.00 if tenant pays NO utilities
My asking rent is 700 + utilities. What would all you Section 8 pros do? If the subsidized amount is less than my asking rent, then the tenant pays the difference? Deep down, I want the tenant to pay all utilities just as they do in my non-section 8 single family rentals. I just need some direction.
Thanks is advance.
$300/mo allowance for utlities seems excessive but I don't know your utility rates in your area.
If sec8 will only cover $549 then your tenant is responsible for the difference.
You could, of course, modify the rental agreement where you, the landlord, pays all utilities but be damn sure that you'll never spend over $300/mo on the bills.
Being section 8....I'd have them do the utiliiies as I bet they would leave the lights on...doors open when heating/cooling etc when they know yours truly is paying...I wouldn't sleep well at night if I had to do any utilities except stuff that's flat rate like cable. I hate any variables in the equation especially when it involves things I can't place blame on. It's easy to tell if a door is smashed...toilet broke etc...trying to pin down wasting energy is a no go. If you can rent it out to non section 8 I would do that as I'd be hard pressed to go Sec 8 these days with the landlord sucking up all the damages now. Just my two cents but I'm thinking if the gov't is throwing an extra 300 in there it's likely that's what's going to be needed to cover it!
It all depends I have both section 8 and non government tenants to tell you the truth I prefer the government ones the money is always there and maybe its just me but I have been lucky never had a tenant trash a place yet. As for you wanting 700 and they only pay 5 and change then the tenant will have to make up the difference. This of course is in my area I am sure it is different in each area.
I am no expert but have recently rented out my only investment property to a section 8 Tenant. I did a lot of research (read each and every post regarding section 8 on this site) and asked a lot of questions specific to my situation.
Here is my opinion:
1) I don't think you should pay for the utilities.
2) Section 8 determines a rent amount (based on market rent) and you are not supposed to charge anything above that from the tenant. so if you go with option 2. You will get $604 total and a part of it might be coming from the tenant. You will be responsible for collecting that. anything above $604 is illegal and can cause a lot of problems.
I also understand that it is a common practice to charge above the HUD determined rent but you don't have any legal recourse on that amount.
That is my understanding. If any experts think I am wrong please correct me.
Thanks and good luck.
In the city, 3 bdr single family's fetch around 650 + utilities. Of course some luxury property shoots as high as several thousand. But for a solid working class neighborhood, 650 + is the norm. 547 is just way too low. What do you guys think?
Quote:
On 2004-09-15 17:19, Gino wrote:
In the city, 3 bdr single family's fetch around 650 + utilities. Of course some luxury property shoots as high as several thousand. But for a solid working class neighborhood, 650 + is the norm. 547 is just way too low. What do you guys think?
The only reason that you would go section 8 is for the guaranteed rents. If that doesn't sell you, walk away.
Alternately, there are 2 Section 8 offices in my area and one pays better than the other. You might want to check the payment schedule of alternate Section 8 offices.
[addsig]
Like others have said, tenants have no incentive to conserve untilities if they're included in rent. Normally $300 would easily cover all of the utilities for one of my units. But, I have a Section 8 tenant that exceeds that every month without fail. Having the tenant pay utilities just eliminates one more unknown.
I think being in a cold area your tenant probably qualifies for help w/paying the utilities. the gas company has fliers in my bill every year about donating to help the poor. CAP & LIHEAP are 2 programs in my area. they also get some type state rent rebate in the spring and they can use that to pay their bill if they fall behind. I haven't had a rental for I believe 8 years and when I did I paid all utilities (due to the type property). I was tired of them always fooling with the thermostat so I had the plumber put one of the electronic gadgets in. well, the tenants knew their way around that - they put ice cubes on top the plastic cover so the cold water dripped in and kicked the heat up. I'm working with a prospective tenant and she told me in her last appt. she kept the oven on with the door open because it was always cold. the landlord paid the electric but she paid the gas heat - guess what type range - electric
Don't pay their utilities.
You are not restricted to section 8 tenants. Advertise the property for the rent and terms you want. If a Section 8 applicant wants your property, they have to rent on your terms.