My DC property only attracts voucher holders- some questions

12 Replies

I have a rental that is turning over for the third time. I had tenants for two years and then tenants for 3 years. The house is located in a little pocket right in between two booming neighborhoods- Mt. Vernon Triangle and NoMA, accessible to multiple metro stations, walkable to everything, has laundry, parking, a fenced patio and I feel its generally a pretty awesome unit. The house next door just went under contract for $630k.

Its coming available a month from now and I am finding this time, as in times before, nearly all, if not all, of the interest I am getting is from holders of housing vouchers. From what I understand, getting approved for voucher holders can be a cumbersome process in DC, with several weeks of waiting in between inspections, the inspectors can be total sticklers for things that aren't a big deal otherwise, and I worry that will leave me with vacancy (which may just be a reality in winter anyway). This process is also not something I see myself being able to easily navigate in December due to starting a new job, kids on winter break, the holidays, etc. 

I'm wondering:

1. Can anyone share their experience with the process of getting approved for renting to voucher holders in DC? What were the timelines? Was the process messy? What has your experience been?

2. Why is the only interest in my unit from voucher holders? Do market rate renters all demand amenities and high end finishes in DC?

I'd love any weigh-in from DC folks if you know the area. I am trying to read up on renting to voucher holders (as I see there are many posts on this) but my immediate concern is just not being able to navigate this process in December and worry of vacancy because of it. 
  

Why is a $630,000 home priced low enough to interest voucher holders? In my experience, a voucher is generally enough to pay for an apartment, a condo, or maybe a small, below-average single-family home. I've never seen a voucher pay for a B-class or A-class single-family home.

Are you sure the home is priced at market rate?

If it is priced at market rate and it does qualify for vouchers, I would rent it to vouchers. It's not ideal (for me) but it pays the bills and they are usually decent renters.

Hello Alexa,

I currently have a home in DC with a voucher holder as tenant.  The process is not too complicated.  

Here is a link from DCHA.  It covers the high level steps you need to follow (https://www.dchousing.org/doc.aspx?docid=2015012115220416638)

It's been a couple of years since I went through it myself so pulling the info from memory ... you will fist have to get DCRA to do an inspection of the house and it passes their requirement. They will tell you what they will be looking for when they come for the inspection.  Try and set this appointment as quickly as possible.  If I recall correctly, this took over a month for me.  You will also need to get a Basic Business License ... google to get more info ... you can do complete the process all online and it is good for a year but it must be renewed every year.

I can't say this enough ... make sure you have a good tenant screening process!  You will be glad you did!  Make sure you get a copy of the voucher from potential tenants and validate it has not expired.

There are a bunch of form you will have to complete and have your tenant completed.  You can submit the form online to DCHA for processing.  DCHA will schedule an inspector to go to the house and go through their own inspection process.  If I recall correctly, this process did not take as long.  They will tell you what they will be looking for during inspection so make sure you are ready before the scheduled date.  Just like the DCRA inspection, you are allowed to fail once and get a 2nd inspection free ... you will be required to pay for any additional inspections if required.

Once the inspection is done, both you and the tenant will go to DHCA to for final signature and you are done!

The whole process can take 2 - 3 months.  I recommend you do not go light on the tenant screening process.

Hope that helps a bit.




Source of income is a protected class in DC, so you can not discriminate against them.  The inspection for section 8 is substantially similar to the DCRA inspection you have to do anyways, so its no big deal since you are doing that inspection anyways.

In many neighborhoods in DC section 8 pays above market rent, so you might just be priced above what a regular renter would pay and at the level only section 8 would pay.

Originally posted by @Nathan G. :

Why is a $630,000 home priced low enough to interest voucher holders? In my experience, a voucher is generally enough to pay for an apartment, a condo, or maybe a small, below-average single-family home. I've never seen a voucher pay for a B-class or A-class single-family home.

Are you sure the home is priced at market rate?

If it is priced at market rate and it does qualify for vouchers, I would rent it to vouchers. It's not ideal (for me) but it pays the bills and they are usually decent renters.

 Thats just a slightly above average price point for DC. We see voucher holders in properties Id say as high as $850k. 

@Russell Brazil  where in DC is section 8 rent higher than market rent?  Possibly a 4 or 5 bedroom but not a 2 or 3 bedroom?  Section 8 is also not giving rent increases.  @Alexa S. how are you advertising your property? That is a good area that should command a decent rent. Market renters are not that picky but we would need to know more about your property. You are getting the turnover just because people come to DC and find out what works for them and makes adjustments. I have had tenants that move to Capitol Hill and relocate to VA because of the commute. You are getting the interest because there is a serious housing crisis. There is simply not enough affordable housing in the city. It is unfortunate how the federal section 8 program is administered so differently at the state/jurisdiction level. I am a proponent of keeping a professional distance from tenants and encourage the the use of property managers. There are also services that can help you with licenses and inspections.

@Shadonna N.

Its neighborhood specific based on the section 8 pay schedule for the area. Petworth for instance, section 8 rents are like 1500 higher than market rents.

@Russell Brazil @Shadonna N. @Nathan G. Thank you all for your comments.

The neighborhood limits for the voucher for a 3 bedroom are $3872 without utilities and $4069. I am not trying to rent it out for anywhere near those prices because its not upgraded. (I posted previously to ask about what I should consider updating, if anything, at the next turnover)...It has black appliances and builder basic oak cabinets. We waver on whether to list it as a 2 bedroom or 3- it IS three true bedrooms but the third is quite small and would fit just a twin bed or a desk based on the configuration. But perhaps I need assistance on pricing it. 

We had tried to use a local property management company for leasing the last time it turned over and they said they would agree to just do the leasing but were ok if we didn't need them for ongoing property management.  They later backed out and said they no longer managed leasing without a contract to manage the property...and we just don't need property management. We live close by, the house requires little in the way of repairs (we updated major systems previously and its not that old), and my co-owner is handy and able to make small fixes.

Right now we have it listed on Hotpads/Trulia/Zillow and have just posted it on Nextdoor and Craigslist.

@Alexa S.

How many sq feet is bedroom 3? For it to be a bedroom its got to be 70 sq feet.

However, in reality when those 3rd bedrooms are too small, which are commonly found in the rowhouse neighborhoods, they are not that desireable to people looking for 3 bedrooms. They will typically get a little more than a 2 bedroom simce your rental pool is more limited.

Slightly off topic, there is an almost 2K difference in the voucher amount between that area and a Congress Heights or Hillcrest.  There are some very nice and expensive homes in Hillcrest.  If the federal limit has set an amount for a 3 BR I don't understand why a local jurisdiction would overlay their own limits especially with the housing shortages.

Back on topic, a lot of people advertise the small room as a den but as @Russell Brazil mentioned, it is 70 sq ft, a window, closet, and door it is legally a room.  The closet is debatable.  If you wanted to upgrade, you can switch out the appliances for a stainless steel set that you can get at a Black Friday sale.  You can get a decent kitchen package for about 2K.  Laundry and parking are also ideal.  I think the oak cabinets are OK.  Too bad that property manager did not work out but there are other property managers and agents who will do the marketing and present tenants to you.  Make sure they know your criteria ex: credit score = X, income =  Y times the rent.  Source of income is a protected class.  If the income is there is there.  You cannot and should not discriminate because funds are from a particular source.  Remember you are not living there, someone else may be willing to pay the 3800.

@Russell Brazil and @Shadonna N. , thank you both again.

The third bedroom is 8x9 so it just eeks in as legitimate. It does have a window, closet and door, but I agree its not super spacious. I am not sure if I advertise it as a 2 BR + office if that would make it more desirable since I imagine some people would not find the third bedroom useful. In the past we have advertised both ways.  Opening up the wall between the two smaller rooms has been something we've considered so as to have two larger bedrooms instead of three of varying sizes.

Thank you both for your feedback. We may consider some updates and whether a property manager may be a good idea for us this go round!

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