Top 20 Most Common Reasons Why Units Fail Section 8 Inspections.

One of your hats that you wear as a real estate investor is being a landlord. As a landlord, your job is to maintain the properties and keep them rented.

Keeping your properties fully occupied throughout the year increases your cash flow and provides a better return on your investment ROI but can be a difficult task! The longer a Unit remains unoccupied the less ROI landlords are going to have.

Below are several channels available to landlords to find qualified tenants:

• Retail Market - Newspapers, Word of Mouth, Church, For Rent Signs on property, internet, etc...
• Multiple Listing Service MLS - Database Realtors use to find rental properties for their clients
• Section 8, Plan Ocho, Sec 8, Plan Eight, Plan 8, Section Eight - Government subsidized rental payment plan.

The more channels you have, the greater possibility of finding a qualified tenant for your unit. SPEED is essential for success. Any delay will hurt ROI.

Section 8 will eliminate a lot of the drawbacks of being a landlord but you have to follow HUD's guidelines to be successful.

One part of the guidelines is the unit or property must pass an interior and exterior inspection. If you fail the inspection, more delays and your ROI will be affected. Being prepared for the inspection will help make the rental transaction a smooth process.

From my experience with Section 8, below is a list of items that will fail a HUD inspection:

1. Smoke alarms missing or not working.
2. Lack of ventilation in bathroom.
3. Outlet covers missing or broken.
4. Infestation by bugs or vermin.
5. Absence of handrails where 4 or more consecutive steps.
6. Utilities disconnected (must be connected).
7. Hazards (i.e. tripping as a result of floor covering or exposed electrical wiring.
8. One window in each room must open and have a screen.
9. Chipping paint on the outside of the building – gutters, outside surfaces of building.
10. Hazardous hole or trash in the yard.
11. Door not sealed properly (light can be seen coming through).
12. No hot or cold running water.
13. All windows must have sash cords or balancers and must stay in the open position without assistance.
14. All ceilings must be at least 7 feet in height in areas used for living, sleeping, etc….
15. All steps to landing or basements have handrails.
16. Baths without windows must have power fan or gravity vents in high rise buildings.
17. Open electrical distribution box must be covered with appropriate cover.
18. Windows in bedroom too small and will not qualify as areas for sleeping.
19. Security bars (rejas) can’t be opened from the interior will not be allowed to remain.
20. All bedrooms must have a built in closet.

I provided pictures of potential failure points below. Can you identify what would cause a failed inspection item?

Click on each image to view a larger photo!
Have you any experience with Section 8 inspections? Share them with US!

Related Links, Blog Postings, Presentations or Articles:

• Our Section 8 telephone interview - Podcast
• Our Sec 8 Power Point presentation given to the Miami Real Estate Investor Association MREIA

Written by +Bob Burns. ####    

Yeah Baby! Real Estate Investor about.me/RobertKBurns Telephone #: 305-586-5280 email: rkburns@investmentpropertiesmiamiflorida.com

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Miami Dade Housing Choice Voucher Program Building

HUD's fourth largest Section Eight or Plan Ocho program in the nation is managed by Miami-Dade Public Housing Agency MDPHA. It is a management nightmare! I remember the old Coral Way offices and waiting hours to see a Landlord case worker. The county decided to outsource the management of Miami-Dade Public Housing Agency MDPHA's Housing Choice Voucher Program. Miami-Dade awarded a multi-year contract to Quadel Consulting. They are responsible for:

• Section 8 Voucher Program
• Section 8 Home Ownership Program
• MDPHA Family Self Sufficiency (FSS) Program

This allows the MDPHA to save money and increase processing efficiencies.

Landlords, this is a great program to use for renting your investment properties. When a unit becomes empty, the clock starts ticking. You are losing MONEY! You need to lease this unit as soon as possible! Adding Section 8 or Plan 8 to your marketing funnel, increases the probability of finding a qualified tenant.

I put to together a simple video below that shows you the outside of the Miami Dade Housing Choice Voucher Program Building. Go down there NOW and set up an appointment to discuss the Landlord Program. Address is: 7400 NW 19th Street, Bay H, Miami, Florida 33126. Don't expect an appointment right away. They will schedule you via a 3-4 week window. Sorry, it is what it is!

Related Links, Maps, Blog Postings, Presentations or Articles:

• Miami Dade Housing Choice Voucher Program Building Map.
• Quadel Consulting Web Site.

Written by +Bob Burns.
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	Change! Nothing Stays the Same. MREIA's President about.me/RobertKBurns Telephone #: 305-586-5280 email: rkburns@investmentpropertiesmiamiflorida.com MREIA's Web Page: www.miamireia.com

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Video about Calculating Fair Market Rent FMR using a HUD Section 8 tool

While giving real estate investing presentations, especially about Section 8 and to new land lords, a common question from newbies is "How much can I charge for rent?"

WOW, that is a good question!

Remember, there are several things to consider while trying to answer this famous question:

• How many bedrooms?
• Demographics of the neighborhood?
• Have I checked the local newspapers?
• Did I call "FOR Rent" signs and see what other Land Lords are asking?
• What is the Multiple Listing Service MLS saying about rental prices in that zip code?
• Other Investors, what are they charging?
• Does your property have issues?
• Etc.

My point is that it would take a lot of time to do a good rental survey or Fair Market Rent FMR of your market before you can come up with a price.

But those days are over......

When I started using Section Eight I noticed that the case workers focused on:

1. Participant's current income
2. Inspection results of the land lord's property
3. What is Section Eight or Plan Ocho currently paying other land lords in the area.

They would always come up with a figure magically. I always wondered how they calculated the results to come up with the fair market rent FMR number. Fair meaning making it a win-win for the Housing Authority, the Land Lord and the Participant.

NOW...

Here is a tool where the Fair Market Rent FMR ceilings are calculated for you by HUD, from efficiencies, one bedroom and up to four bedrooms. Check out the video....

Written by +Bob Burns.

"Yeah Baby!" MREIA's President about.me/RobertKBurns Telephone #: 305-300-6242 email: rkburns@investmentpropertiesmiamiflorida.com MREIA's Web Page: www.miamireia.com

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Rental Income and Expenses - Real Estate Tax Tips

Below you will find the IRS guidelines and different examples as they apply to rental properties.

You generally must include in your gross income all amounts you receive as rent.

Rental income is any payment you receive for the use or occupation of property.

Expenses of renting property can be deducted from your gross rental income. You generally deduct your rental expenses in the year you pay them. Publication 527, Residential Rental Property includes information on the expenses you can deduct if you rent a condominium or cooperative apartment, if you rent part of your property, or if you change your property to rental use.

When to Report Income

Report rental income on your return for the year you actually or constructively receive it, if you are a cash basis taxpayer. You are a cash basis taxpayer if you report income in the year you receive it, regardless of when it was earned. You constructively receive income when it is made available to you, for example, by being credited to your bank account.

For more information about when you constructively receive income, see Publication 538, Accounting Periods and Methods.

Advance Rent

Advance rent is any amount you receive before the period that it covers. Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use.
Example:

You sign a 10-year lease to rent your property. In the first year, you receive $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. You must include $10,000 in your income in the first year.

Security Deposits

Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year.

If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Include it in your income when you receive it. Understand, Florida Statue states that a Security Deposit is NOT to be used for rent, but toward Performance. (Please refer to FS 83, Sec. 83-49 for further information.) You must also notify the tenant in writing within 15 days from vacating of your intentions toward the Security Deposit. Some landlords will require 2, sometimes 3 months to be applied as a Security Deposit. This avoids it being considered Rent if you were to collect them prior to the year’s end. However, if your tenant overlaps their lease into the New Year and you apply those Security Deposits toward final rent(s) then Yes, it is rental income. Understand, "IF" you apply these Security Deposits toward the rent if the tenant skips out on the lease or for whatever reason and does not pay their requirement, you will indeed have to show them as income, "MINUS" and repairs which will show as. You can deduct the cost of the repairs as a rental expense.

Expenses Paid by Tenant

If your tenant pays any of your expenses, the payments are rental income. You must include them in your income. You can deduct the expenses if they are deductible rental expenses. See Rental Expenses in Publication 527, for more information.

Example One:

Your tenant pays the water and sewage bill for your rental property and deducts it from the normal rent payment. Under the terms of the lease, your tenant does not have to pay this bill.

Example Two:

While you are out of town, the furnace in your rental property stops working. Your tenant pays for the necessary repairs and deducts the repair bill from the rent payment. Based on the facts in each example, include in your rental income both the net amount of the rent payment and the amount the tenant paid for the utility bills and the repairs. You can deduct the cost of the utility bills and repairs as a rental expense.

Property or Services in Lieu of Rent

If you receive property or services, instead of money, as rent, include the fair market value of the property or services in your rental income.

If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary.

Example:
Your tenant is a painter. He offers to paint your rental property instead of paying 2 months' rent. You accept his offer. Include in your rental income the amount the tenant would have paid for 2 months' rent. You can include that same amount as a rental expense for painting your property.

Personal Use of Vacation Home or Dwelling Unit

If you have any personal use of a vacation home or other dwelling unit that you rent out, you must divide your expenses between rental use and personal use. See Figuring Days of Personal Use and How To Divide Expenses in Publication 527. If your expenses for rental use are more than your rental income, you may not be able to deduct all of the rental expenses.

See How To Figure Rental Income and Deductions in Publication 527.

10-99 Workers: If you are not sure of the threshold, anything paid above $500 must be reported on a 10-99.

Respectfully,

Tax Sense, LLC
Full in Tax $ense Questionnaire concerning your Taxes.

Written by +Bob Burns.

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"Be Viral" MREIA's President about.me/RobertKBurns Telephone #: 305-300-6242 email: rkburns@investmentpropertiesmiamiflorida.com MREIA's Web Page: www.miamireia.com