How to Get the Max Amount of Rent Permissible from a new Section 8 Applicant
/In order to find a Section 8 tenant, the owner needs to list their house for rent as being available for Section 8 tenants.
In my last video I suggested to list the house at www.AffordableHousing.com. Why not? This is where all the Section 8 offices tell their Housing Choice Voucher (HCV or Section 8) participants to apply.
I was wrong!
It has since come to my attention that owners have listed their properties on that website only to discover they could get more from the applicant than the amount on their listing. The owner gets Section 8 to agree to a higher amount. The paperwork is submitted. The inspection is done. The tenant moves in. Then it’s time for Section 8 to pay the owner and Section 8 goes to their favorite website to see your ad, https://www.affordablehousing.com/, and Section 8 says, “What? You will accept this lower amount? Great. That’s what we will pay you.”
What Amount do you List it for then?
Some people think they should just list it for the HUD Fair Market amount. This is the amount of rent you can get if you, the landlord, agree to pay for the gas, electric, and water and you are doing all the bells and whistles. You maybe offer a garage, a patio, a driveway, ceiling fans, washer, dryer, stove, refrigerator, disposal, and maybe even a gated community with a swimming pool. Then you can get that full amount. Oh, and it has to be in a neighborhood where the non Section 8 houses rent for that much too.
So the answer is to list it for around $300 less than the HUD FMR so your phone will ring. And on your listing you state, “Actual Rental Amount Depends on Voucher.” And DO NOT LIST IT ON SECTION 8’S FAVORITE WEBSITE! www.AffordableHousing.com. And once you get a tenant, for heaven’s sake, take down your listing.
So Where Should You List it if Not on the Favorite Website?
I’m playing around with this myself right now. There is a a local Facebook group my friend Jay started. That has been going well.
I will also post on Zillow but it does cost me $29.99 each time I list it. Yikes! And I am now selling my own local list of Section 8 office’s direct contacts and submission forms I’ve gathered over the many years of doing this.
How Do You Determine the Maximum Amount You Can Even Get?
This is NOT EASY! Tenants don’t seem to know or they don’t want to tell what that number is. The question you need to ask is, “What is your Payment Standard?” That’s Section 8 code language for what rent can it be if you, the tenant, have to pay your own gas, electric, and water. Then it gets all fuzzy. I have another video that goes into that.
The other code phrase is, “What is your maximum gross rent?” The maximum gross rent is the amount of rent if you, the landlord, are offering all those bells and whistles. If I hear a maximum gross rent, I minus off around $200 and that’s the amount of their payment standard. That’s the amount of rent that their Section 8 office will allow me to charge, give or take $50.
If I’m still lost, or the HCV applicant is lost, or even if I just want assurance, I will email their caseworker. Here is a sample of a recent email:
The replies from Section 8 area always so cryptic. This is the reply: “It will not. Her maximum gross rent which is rent and any utilities she would pay cannot exceed $1394.”
I took that to mean if I take off $200 for the utilities, I can probably charge the tenant around $1,200/month for my three-bedroom Detroit home. That’s what I really wanted anyway. I was hoping for $1,250 but if she were really good, I would take her at $1,200 and just raise the rent as far as possible in a year. I never verified the exact amount with this applicant because she had too many other things on her record that weren’t that favorable. Let’s just say she knows her way around 36th District Court pretty well.
I did end up with a different tenant with a much cleaner background check. And the caseworker of the tenant I chose told me the most rent I could charge is “around” $1,250. They cannot guarantee the amount because it takes more calculations to determine the bells and the whistles. taking that amount up or down a little bit. Section 8 will also take into consideration just how much the tenant is paying toward rent as well before the final rental amount is accepted at $1,250 or if Section 8 needs to ask me to take that number down by a few dollars to make it work.
If you need more guidance on how this looks in real life, I’m starting to record myself questioning the applicants on the phone. Check with this link below to see what deeper training packages I’m offering.