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Section 8 Housing, Should You Apply?

Zillow had an interesting blog post yesterday posing the question is the section 8 housing program good for landlords?  I think like with most things there are pro’s and con’s to participating in the program.  At J. Butler Property Management, LLC. we have managed many Boston Apartments and also many places in the suburbs for our clients over the years that have section 8 tenants.  At MyNewApartment.com we have experienced the same thing, some landlords want nothing to do with the program and other landlords can’t get enough.  Many times it really depends on what part of Boston the apartment is in.  For example the Boston Apartments in the Back Bay area a lot of times price section 8 voucher holders right out of the market.  Whereas Boston Apartments located in Dorchester are much more prevalent because the rental and price points are more affordable.

For landlords that do own Boston Apartments one common misconception that I have found over the years is that landlords are led to believe that the money or a portion there of is guaranteed.  As a Boston Apartment landlord it is important to make sure you understand the program and how it works.  An example would be the following, let’s use a rental amount of one thousand dollars $1,000.00 to make the math easy.  In this example let’s say the voucher will cover the $1,000.00 rent you are asking the next step which is done by the housing authority is to figure out what portion of the $1,000.00 the tenant is responsible for.  This is normally based off the tenant’s income and the Boston Housing Authority would have a formula they use to figure out the ratio.  So in this example let’s say the housing authority comes back to the Boston Landlord and says the tenant shall be responsible for $200.00 and the Boston Housing Authority $800.00.  Okay well for now the Boston Apartment landlord is guaranteed the $800.00 per month but you still need to collect the $200.00 per month from the tenant.  The second part of this and the area where a lot of Boston Apartment landlords don’t know is that the ratio can change over time if the tenants income changes.  If the tenant was making $2,000.00 per month originally and halfway through the lease get’s a second job or a promotion and they are now making $3,000.00 per month then the Boston housing authority will change the proportions.  So now the Boston Apartment Landlord might need to collect $400.00 from the tenant and $600.00 from the housing authority.

In short be careful with this because you might think you are assuming a small risk when in the middle of the lease you risk can double.  There are many other things in the program like this that a Boston Apartment landlord needs to know before they register for the program.

 

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