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I guess if we another pandemic then I will have guaranteed rent.
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That is one shitty answer from someone who works for you.
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^
What he said! Renters in general have a tendency to not treat the property with the same respect that owners do. Section 8 renters are even worse.
You will really need to be up on the laws pertaining to squatters. A high percentage of Section 8 renters are essentially homeless. The good news is that the rent is paid by a government agency which makes it more secure and dependable. The bad news is that if, for whatever reason, the government quits paying their rent it will probably be on you to evict them, not the government.
Regardless of the reasons for renting out to Section 8 I would be interested if the agent actually checked for references or if they just jumped on the income aspect of it. Maybe you should ask for a copy of the rental application and whatever background/reference checks were made. If there were no reference checks made then review your contract with the rental agency, they may be liable for damages (if any) if the contract states that they will do those checks but they skipped them for the "guaranteed income" of a Section 8 rental.
I know in Cali if you have a Section 8 rental you might get $1,800/mo in income. However, they can do more than that in damage. Water damage that goes unchecked and not fixed in a timely manner can multiply the damages significantly. Do the new renters carry renter's insurance or does the government agency handle that?
Also, does the agent go by every once in awhile and check on the condition of the property or do they just sit back and rake in the monthly commission?
I wish you good luck with this but I can foresee all sorts of potential problems. You will be one of the lucky ones if it goes smoothly for you.
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Huh?
$500 more a month, what?
You had a pre-defined rent, right? (Xbdrm X bath, XXXsq ft $XXX price)
Every apartment/ rental etc. that I've seen has a price it rents for.
How did your agent get that much over asking?
Section 8 in order to be qualified has to meet certain criteria and it's a bit of a pain (from landlord viewpoint) as the landlord needs to meet their criteria, it's subject to inspection etc., etc.
From my understanding, landlords that go through the trouble and list w/ Section 8 kinda like it as it's guaranteed income, and renters don't want to be kicked out of the free money & thus take decent care of the properties.
You (your agent) should have a pre defined list of what applicants need to show before renting. XXX credit score, XXX income, XXX rental history XXX ----- you do this obviously to be fair, grab the first qualified tenant, and protect yourself against being accused of violating fair housing laws.
So..... something seems fishy.
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He converted my den to make it a 4 bedroom.
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He also did the renovations on the home to so must have been good to pass inspection.
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Did he really get all the proper permits and inspections for the home renovation? I'd verify with the city/county to double check.
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so... section 8 without fully clarifying.
Converted space into a bedroom.
Let's hope you have the paperwork right, otherwise, sorry to say it, you're fucked.
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Whatever you're paying the mgmt. co. is too much. I'm not familiar with NC tenant's/Section 8 rules, but you need to switch mgmt. co. asap. I've never had a mgmt. company rent one of my properties without running the prospective tenants applications by me first. Sorry you find yourself in this position. Wish you the best.
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Marrisa G summed it up very well. There are pros and cons to everything. Your agent gets paid based upon keeping your property rented and section 8 guarantees the monthly rent so that is his main concern. When we as individuals work hard and pay for things including our home may it be as owners or renters we take pride and maintain what we have worked hard for. When we are given those same things there is much less personally invested and I believe much is taken for granted, thus “used and abused”
Sounds like there may be a lack of communication between you and your agent. I would suggest the two of you discuss in detail your game plan for future of your property.
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Thank you all. I have much more insight now and and meeting with him next week to discuss all the aforementioned items. Bless you all for input. My anxiety is going up and down but I hope next week it gets resolved.
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I'm going to step out and make a wild guess!
This "agent" is not really in the business of managing rental properties. I suspect that he is an acquaintance, possibly a former or current client, that you are in a bartering situation with.
The reason I say this is that I have never heard of a legitimate rental agent do renovations to a landlord's property. Nor would a legitimate agent apply to have the landlord's property evaluated, and approved, for Section 8 without the landlord's approval. If that is the case then I can understand how this situation developed.
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No he is a business and real estate agent and sold many homes to my colleagues from my jobs in nc. He also has done construction projects.. He has gotten me my two months rent just this week from the housing authorities and he gets 10% cut plus did my renovations from hurricane flood. Its how it worked out. Strange I realize.
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Wow! I need to find an agent like that. He is truly unique.
I have an electrician in Fort Lauderdale that does some extensive electrical work for me but I pay for it in trade (barter). I actually think he does a better job quality wise knowing there is an attractive payoff afterwards, but also realizes that if he does a shitty job he may be cut off! Great motivation! I think I am getting the better end of that deal as good electricians aren't cheap.
Now I need to find a plumber!
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One of the primary considerations for income producing real estate is the property's net operating income (NOI). The higher the NOI, the more valuable a property is. That's why when a tenant leaves, you should fix up the unit and increase the rental price as high as the market will dictate. By maximizing the property's net operating income (NOI), the more valuable the property.
You're not going to be able to maximize the rental income with Section 8 tenants in your building (most people will avoid the property once they know it accepts Section 8), so the property manager really fucked you over.
You may want to check if he had the authority to designate your property for Section 8. If he didn't, I would seek to reverse it. Even if he did have authority as your representative, I would argue that he didn't consult with you first as the owner and that he wished to cause you harm.
Section 8 may be a good option if you're in an area where there are a lot of rental vacancies, but it will definitely affect the resale price of the property when you seek to sell it in the future.
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"No he is a business and real estate agent and sold many homes to my colleagues from my jobs in nc. He also has done construction projects.. He has gotten me my two months rent just this week from the housing authorities and he gets 10% cut plus did my renovations from hurricane flood. It's how it worked out. Strange I realize."
If he's a real estate agent, he needs to disclose all relevant information to you that may affect the value of the property he manages for you. You should approach the licensing authority in North Carolina that licenses real estate brokers/agents and discuss what happened with them. They can give you advice on what to do next.
There are many people who claim to be experts who are completely irresponsible idiots. Licensed agents can lose their real estate license for doing something like this.
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IMO. I would terminate your property management team/ person.
They should not be making or even feeling comfortable making any decisions about changes to contract or property.
Communication has to be crystal clear at all times!!
Also, I grew up with housing assistance, 'those people" are people. Section 8 could be very helpful, especially in this economy. You can still interview people before allowing them to live in or on your property.
Either way.. get a new management company.
-DL
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