Purchasing An Eight-Bedroom Apartment Building: Is It Possible?

The cost of an 8-bedroom apartment building will depend on a number of factors, including your income, the location of the building, and whether you qualify for government assistance.

The Section 8 Housing Choice Voucher program is a form of government rent assistance. In 2018, over 5 million people across the country lived in a household that used a voucher to help pay some or all of their rent. To qualify for Section 8, you must meet certain income requirements. If approved, the local housing authority will start sending payments directly to your landlord. On average, each household will pay somewhere between 30% and 40% of its income on rent.

In addition to Section 8, there are other forms of government assistance that can help with housing costs, such as public housing or rural rental assistance. It's worth exploring all your options to see what you might qualify for.

Another factor that will affect the cost of your 8-bedroom apartment building is location. Rent prices can vary significantly depending on where you live. For example, the 2012 Fair Market Rent (FMR) for a 1-bedroom apartment in San Francisco was $1,522, while in New York, it was $1,280, and in other places, it was less than $500.

Finally, keep in mind that the cost of utilities (like heat, electricity, etc.) is not usually included in the rent. You will need to factor in these additional costs when calculating the total monthly expense of your 8-bedroom apartment building.

How much rent will I pay?

The amount of rent you pay depends on several factors, including your income, the number of people in your household, and the type of housing you live in. Here is a step-by-step guide to calculating your rent:

Step 1: Calculate Your Total Household Income

Include all sources of income for everyone in your household, such as work income, disability payments, child support, and any other regular payments you receive.

Step 2: Subtract Non-Countable Income

Exclude sporadic income, one-time gifts, most student financial aid, some forms of income from children/teens, food stamps, utility assistance, and income for disabled individuals returning to work.

Step 3: Calculate Your Countable Yearly Income

Add up all the income sources from Step 1 and subtract the non-countable income from Step 2. This will give you your total countable yearly income.

Step 4: Apply Deductions

If the head of the household, co-head, or spouse is disabled, subtract $400. For each child, subtract $480. You can also deduct daycare expenses if needed for a parent to work or go to school for a child under 12. If the head of the household is disabled, you can deduct medical expenses after 3% of your annual income.

Step 5: Calculate Your Annual Adjusted Income

This is your total countable yearly income from Step 3 minus the deductions from Step 4.

Step 6: Divide by 12 to Get Your Monthly Adjusted Income

Divide the annual adjusted income from Step 5 by 12 to get your monthly adjusted income.

Step 7: Multiply by 30%

Multiply your monthly adjusted income by 30% to get an estimate of your rent contribution. However, please note that the actual amount may vary depending on other factors.

Step 8: Consider Other Factors

The final amount of rent you pay may be influenced by other factors, such as utility allowances, minimum rent amounts, and the specific rules of the housing program you are participating in.

Remember that the above calculation provides a general estimate, and the actual rent you pay may differ based on your specific circumstances and the housing program you are enrolled in. It is always a good idea to consult with your housing authority or a financial advisor to get an accurate understanding of your rent obligations.

How do I apply?

To apply for an 8-bedroom apartment building, you will need to follow these steps:

Step 1: Check your eligibility

First, you need to ensure that you meet the eligibility criteria for the Section 8 Housing Choice Voucher Program. This includes factors such as income, family status and size, citizenship status, criminal history, and eviction history. The income requirement is typically based on a percentage of the median income in your area, and it takes into account the combined income of everyone in your household. You can use the online tool provided by the Department of Housing and Urban Development (HUD) to determine if you fall within the required income range for your state and county.

Step 2: Find your local Public Housing Agency (PHA)

You will need to work with your local PHA to determine your eligibility and apply for the program. Contact your local PHA and inquire about the specific requirements and application process for your area. They will be able to provide you with information on income limits, waiting lists, and any additional criteria you need to meet.

Step 3: Gather the necessary documentation

When applying for Section 8, you will need to provide various documents to verify your personal and income-related information. This includes proof of income, inheritance, alimony, and scholarships. Make sure you have all the required documents ready before submitting your application.

Step 4: Submit your application

You can apply for Section 8 online or in person at your local public housing or HUD office. The application will then be reviewed, and all information will go through a verification process. It is important to note that the approval process can take a significant amount of time, and there may be a waiting list for vouchers.

Step 5: Receive your voucher and find a property

If your application is approved, you will receive a Section 8 voucher. You will then have a certain amount of time, typically around 90 days, to find a suitable apartment that accepts Section 8. You can use resources such as HUD's online map and interactive tools to search for properties that participate in the program. Once you find a potential apartment, the PHA will need to approve the unit and the lease before you can move in.

Step 6: Sign the lease and move in

After your selected apartment has been approved by the PHA, you will sign a lease with the landlord for at least one year. You may also be required to pay a security deposit. At this point, you can start planning your move and preparing for your new home. Remember to carefully review the terms of your lease agreement and understand your rights and responsibilities as a tenant.

What are the income requirements?

The income requirements to qualify for Section 8 housing vary depending on location and household size. In the United States, the income limits are set by the Department of Housing and Urban Development (HUD) and are based on the Area Median Income (AMI) for the area where the household is located. The AMI is the midpoint of the income distribution in a given area and is adjusted annually to account for inflation.

To be eligible for Section 8, a household's income must be below a certain level, typically around 50% of the AMI for their area. For example, in Miami-Dade County, Florida, a household of four must earn no more than $44,100 per year to qualify. The income limits are different in every area, so it's important to check with the local housing authority or the specific building you want to apply for.

In addition to income limits, there are other factors that determine eligibility for Section 8 housing. These include citizenship status, criminal history, and household composition. The program is designed to assist families, seniors, and persons with disabilities living in poverty or at risk of homelessness.

When calculating income for Section 8 eligibility, the income of all household members, including children, is included. However, certain types of income may be excluded, such as sporadic income, one-time gifts, and some forms of income from children or teens.

Once approved for Section 8, the amount of rental assistance provided is typically calculated as the difference between 30% of the household's adjusted income and the Payment Standard for the area. The Payment Standard is based on the Fair Market Rent (FMR), which is the estimated rent for a unit that meets HUD's quality standards in a specific geographic area.

It's important to note that the demand for Section 8 housing often exceeds the availability of vouchers, and there may be a waiting list. As a result, it's advisable to apply as soon as possible and explore alternative low-income housing options while on the waiting list.

What are the rules?

The rules for Section 8 housing vary depending on the state and county, but there are some general rules that apply across the board. Here are the key rules you should know about:

• Income Limits: Section 8 housing is only available to very low- or low-income earners. Individuals who earn up to 30% of the area's median income qualify as very low income, while those earning up to 50% qualify as low income.
• Application Process: Local Public Housing Agencies (PHAs) administer vouchers and screen potential tenants based on income level, family size, age, disability status, previous home displacements, and citizenship or eligible immigrant status. Due to high demand, applicants are often placed on a waiting list, which can be very long.
• Rent and Utilities: Section 8 vouchers typically cover around 70% of the tenant's rent and utilities, with the tenant paying the remaining 30% using their income. The specific voucher amount varies depending on city or county, size of the unit, and other factors.
• Landlord Participation: Landlord participation in the Section 8 program is voluntary, but they must meet fair housing laws. Landlords are not allowed to charge Section 8 tenants more than a reasonable rent and must follow HUD's Housing Quality Standards (HQS).
• Tenant Responsibilities: Tenants must abide by certain rules, known as "family obligations," to maintain their voucher. This includes accurately reporting any changes in household income and family composition to the PHA.
• Fair Market Rents (FMRs): FMRs are used to determine the maximum rental rate that a landlord can charge a Section 8 tenant. FMRs are based on median rental rates in the area and include the cost of major utilities.
• Small Area Fair Market Rents (SAFMRs): In some metropolitan areas, SAFMRs are used instead of FMRs to calculate voucher amounts at the zip code level, allowing voucher recipients to access higher-opportunity areas.
• Earned Income Disallowance: There is a provision for disabled individuals with Section 8 housing to have their rent frozen temporarily if they are working part-time below a certain income level.

What happens if I break the rules?

Zoning laws are rules and regulations established by a local authority, such as a city or municipality, to govern specific activities within its jurisdiction. These laws are intended to promote the common good and general welfare of a community, protecting property owners and the community by restricting how properties may be used.

If you break zoning laws, you may face serious consequences, including:

• Criminal penalties: Criminal fines or even jail time.
• Civil penalties: Injunctions or other legal actions to prevent the violation from continuing, such as ordering the removal of an illegal addition.
• Consequences for allowable use: The zoning agency may withhold building permits or other approvals from the violating property.
• Impact on property value: If you cannot assure buyers that the property conforms to zoning laws, you may have to sell it for less than its actual value or take it off the market.
• Financial damages: You may be required to make costly updates or sell the property early.
• Denial of future permits: The zoning board may deny you future permits, affecting you or your business long-term.

In addition to these consequences, breaking zoning laws can also lead to disputes with neighbouring property owners who may seek legal action to enforce compliance with zoning regulations. It is important to familiarize yourself with the specific zoning laws in your area to ensure compliance and avoid unintended consequences.

Frequently asked questions