Is Sec 8 property Transferrable?
I have a potential deal. There is a condo for sale (advertised as motivated seller, but listed for about $10,000 over comps in the area. The condo on the inside is a dump and would need alot of work to ever resell. My mort would cost about $650, and the govt is paying $850 rent. The lease expires this month and the tenent would like to stay if possible. Is this cash flow worth the extra $$$ and what, if anything, do I need to do in order to continue the program.
Any help would be appreciated. I'm a newbie in REI and especially Sec 8.
Contact your local Section 8 administrator. Tell the office that you are considering the purchase of a property that is currently in the Section 8 program. Ask them what you would need to do as the new property owner to have the rents sent directly to you after your purchase.
Skydiver,
If the lease is or will be expired, this will give you a good idea of what you will need to do if you purchase the property:
1) Complete a new lease with the tenant and in include the discloure papers. The Section 8 Admin will probably supply you any disclosure papers needed
2) You will need to complete some tax papers with the local section 8 admin. This will keep this on file to know where to send your rent check(s) to, as well as to send you a 1099 at the end of the year.
There really should be no other hoops that you will have to jump through. If you could stroke a $200+ monthly cashflow, I would say that this would be a good transaction. Do yur homework on the property and make sure that the major items aren't in need of replacement or significant repair (Furnace/ AC/ Water Heater, Roof, etc)
Best of Success
BAMZ
Is there any kind of a Tax break for renting to section 8?
What is a 1099?
Thanks
MIKE
I have a number of section 8 units and to my knowledge there are no tax breaks for renting under section 8 per se. Hopefully, your net income from your rental activities (section 8 or otherwise) is offset or nearly offset by the depreciation on your property.
The 1099 form is usually used to report interest and dividend income to the IRS. A copy is sent to you usually by January 30 of the year following the earned income. Most of these are likely to be from interest bearing bank accounts, stock brokerage houses, etc. With respect to the previous response referencing 1099, I assume that if the Public Housing Authority issues them to report the income to the property owner that is paid by PHA. I don't recall taking a PHA 1099 to my accountant this year but this is likely due to the fact that this income is part of total rental income that is reported in schedule E of form 1040.
I hope this is an adequate response.
-Ed
and you call your self a newbie?
haha just kidding
Great response and thanks for the help!!