Seeking insight from people who rent to voucher holders esp in DC

Seeking insight from people who rent to voucher holders esp in DC

Rental Property Investor · Alexandria, VA · Member since 2014 · 46 posts · 6 votes

I have a small 3 BR townhouse in DC that I had been renting out to market rate renters for the last 5 years. I am buying out my co-owner and will now be the sole owner. 

For various reasons, it felt like a safer bet to rent through DC's voucher holder program but circumstances changed very rapidly in terms of me having the opportunity to buy out, so I have not had a lot of time to process this huge decision. The program will pay me 4069 monthly, although it means I must pay the utilities on behalf of my tenant.

I'm wondering if anyone is willing to chat here online or in a private message to share your experience with the program. Unfortunately, my co-owner started the process without me and selected a tenant that may not have been my top option, and I am told that to restart entry into the program in my name and therefore select my own tenant could take many months. It seems the information shared on the program is quite limited- for example, I just learned via a conversation (I don't see it posted online) that the DCHA program does not disclose how much the tenant is expected to pay monthly until we sit and sign all the documents. This is worrisome. There is a big time crunch to make this all happen so I welcome the chance to learn from your experience or gain some insight.

Thank you in advance!

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Id probably recommend the slightly lower non-utility section 8 rent.  Give a listed to BP Episode #356 with my buddy @Joseph Asamoah. It is in part about section 8 in DC.  Also the BP Video Meet The Investors with me, I touch on DC section 8 rents. 

  • Investor · Pensacola, FL · Member since 2014 · 23 posts · 7 votes
    5y

    I second Russell's recommendation to pursue the lower non-utility section 8 rate. I rent a rowhome in Deanwood through section 8 and it has been great. DCHA pays the listed rate on their website as long as the unit meets standards. 

    For timeline purposes, DCHA is running a little behind due to covid operations. You have to obtain a Basic Business License (easily done online) if you havent already. Your unit also has to pass a DCHA inspection prior to lease signing and tenant placement. This shouldnt take longer than a month to coordinate but has been slower due to covid. It took me about 6 weeks to get my unit inspected and tenanted back in May. 

    Also keep in mind when calculating carrying costs and reserve amounts that the DCHA systems take a month or two to get payments coordinated once your unit is tenanted. It is common to not receive the first 2 months payments while the system coordinates everything but then you will get a lump sum payment in month 2-3 for all back dated money. 

  • Rental Property Investor · Alexandria, VA · Member since 2014 · 46 posts · 6 votes
    5y

    @Russell Brazil, thank you-your comments are always super helpful. I will take a look at these resources today. For both @Russell Brazil and @Terrence Bayly, can you share why you recommend the tenant pays utilities? Since the tenant will also pay an undisclosed portion of the rent, I am worried that if I go with the lower government payment and the tenant is unable to pay utilities, I will also take a hit on the tenant not being able to pay their portion of rent. It would seem that covering utilities with the higher governmet payment might give the tenant more room to make their portion of the rent payment. It seems like a big gamble to guess at which option is more secure.

  • Rental Property Investor · Alexandria, VA · Member since 2014 · 46 posts · 6 votes
    5y

    Apologies for the weird font :( Not sure how that happened!

  • Rental Property Investor · Saint Louis, MO · Member since 2018 · 229 posts · 279 votes
    5y

    @Alexa S., I'm not in the DC area but I have a portfolio of Section 8 properties in the St. Louis Mo area.

    I never pay for any of my tenant's utilities and generally this isn't a problem for the tenants because the Housing Authority takes utilities into account when figuring the amounts the tenant will be responsible for.

    The reason I never pay for the utilities is that if I do, they aren't motivated to monitor their own usage and I have no control over high those bills could get.  

  • Rental Property Investor · Alexandria, VA · Member since 2014 · 46 posts · 6 votes
    5y

    @Jennifer Donley, thank you. That is exactly what I would expect as well. However, when I spoke to the tenant's social worker he said he wouldn't expect she is able to cover utilities on her own based on her income, which then makes me worried she wouldn't pay her portion of the rent.

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