“We have no experience with this and would love some advice about it all”

section 8 rent
Photo by PoPville flickr user Christopher Schmidt

“Dear PoPville,

My dear friend and I purchased a condo in Langdon to rent out. It’s a spacious, light-filled 3br, 1.5 ba, on two levels. It’s about 1 mile from the Rhode Island avenue metro in a quiet neighborhood three blocks from Langdon Park. We’re looking to rent it for $2200 and are finding the only folks interested in renting it are part of DC’s Housing Choice Voucher Program (aka section 8). We have no experience with this and would love some advice about it all.

Advice, comments?

The website says DC pays up to 70% of the rent, with the tenant paying the rest. I’ve heard stories of tenants not paying their portion, leaving the landlord in the lurch. As it’s extremely difficult to evict someone if any payment is being made, I’d like to hear of others’ experiences with renting to Section 8 voucher holders.”

46 Comment

  • My first instinct is that your asking rent must be too high, or you’d have more interest from potential renters.

  • I think you can’t discriminate but yes, ask most landlords in DC and they will tell you section 8 is hugely problematic, tenants with bad credit, unautorized people moving in, lack of employment. And being a landlord is challenging enough. I do hope you have fully versed yourself on how freaking impossible it is to kick someone out of your place in DC. You would be better off lowering the rent, and fully screening tenants inlcuding credit checks and calling references. trust me. A former landlord.

    • Linc Park SE

      +1 Well said.

    • Agreed. I used to own a house on a block with mostly section 8 renters. While some of them were wonderful neighbors, the majority were not. It was constant extremely loud partying/drug use/huge gatherings in the street. Not to mention the houses were completely trashed. As a landlord, I would not risk renting to someone who would potentially trash my place, cause a disturbance to the neighbors and/or miss payments and have little to no recourse to remove them.

      • You won’t miss payments from HCV residents- the DC Housing Authority pays the rent through direct deposit. Renting to voucher holders is just as risky as renting to anyone in the general public- screen your tenants well and you won’t have a problem, regardless of their voucher status.

        • DC only pays a portion of their rent. They are responsible for the remainder. In this case, if DC paid 70% of the rent, the tenant’s portion would be $660. That is a lot of money to be out if they fail to come up with it. Also, see below comment.

          • Also – someone can be kicked out of the Section 8/ DCHA/whatever program for a variety of reasons, and they will still be in your rental with no rent payments and no support from DCHA. If they are kicked out you are SOL – six months to a year to evict them.

          • people with vouchers pay 30 percent of their income for rent, with the public housing agency paying the remaining. So, if their monthly household income is $1,200, they would be responsible for paying the landlord $400

        • But people in the “general public” have a reason to keep their rental history clean. Voucher holders don’t. Not saying that all voucher holders are bad – but from 30 year experience – sorry to say – 50% are in fact troublesome to awful. Think about making your rent attractive to group house people.

  • The first time I ever rented one of my properties I accepted a section 8 tenant. Worst mistake ever, and never again. By the time I finally got them out of the property, I had lost over $20K in lost rent and damage to the apartment. My suggestion is to lower the rent and get a tenant who doesn’t require the use of a voucher. And screen them (make sure you put that in your rental listing) before signing a lease.

    • all of this. Definitely put that info in the listing to go ahead and weed out some folks who know they wont work out. Also, make sure you get a full month deposit upfront. And a go to the trouble of getting a business a license. in the event you do have to kick someone out, it will likely take 6 months and a court appearance (with no rent money coming in btw), and you want to make sure the judge doesn’t ding you for “illegally” renting out the unit.

      • +1. I do credit and criminal background checks on my tenants, call their employer to verify employment and salary and require the security deposit and first month’s rent in the form of a cashier’s check. They can then paypal me after that. They also have to fill out an application and I charge a $40 per person fee (to cover the cost of the credit and background check). I put all this in my ad so there are no surprises. In five years, I’ve had great tenants so far, though admittedly some of that is luck too as you can’t screen for someone who will be demanding or difficult.

  • You can kick them out if they are not paying their portion. If you haven’t done so, consult an L&T attorney. I go to L&T court all the time and you often see landlords who proceed on their own and don’t know the law and get their case dismissed.

    • No. It can take a year to kick someone out – even for non-payment of rent. Sad to say, as I want to support low- income people, but Section 8 is 50% chance of disaster.

      • It can take a year, depending on whether the tenant filed counterclaims or the time of the year; however, in my experience, it rarely takes a year if it is a normal case. The biggest problem, in my experience is that landlord wait too long to file. Once a tenant stops paying rent, you have to jump on them knowing that you probably won’t get the money in the end.

  • On the other side, one of the biggest problems section 8 voucher holders have is finding landlords to rent to them because of wariness around the problems these people mentioned. I met an employed homeless man once who was living in DC General with his wife and four kids because he couldn’t find a landlord to rent to him even though he had a voucher (and a job).

    That being said, you may try reaching out to local homelessness organizations providers and say you are willing to accept a voucher but only from tenants who are working with service providers to ensure that they can meet their rent requirements. This is something providers do when trying to recruit landlords to rent to their clients and some have landlord recruitment programs to try to assuage the issues that make many landlords hesitant to accept vouchers.

  • Don’t own any property, but once got what I thought was a good tip from a landlord. If you are trying to assess a potential tenant and they currently live nearby, call them up and say you were reviewing their application and they didn’t sign a part, or maybe forgot to fill out a line. Say you happen to be near their place and can swing by and have them complete it. Chances are 90% they will let you in their current place. Take the opportunity to do a quick check as you walk in. If the place is kept clean and tidy you know you will likely have a good tenant, and vice versa.

    Thought that was pretty slick. But don’t plan on owning a rental property, so probably won’t ever use it.

  • That seems like very reasonable rent, so I don’t think that lowering the rent is your only option. If I were you I would try an experiment – try listing the same rental for MORE money – maybe $2500. I have been looking to rent a 3BR house and I want to weed out the “too good to be true” listings that are scams so I usually set a minimum and a maximum price. My minimum is $2400, so even if I were looking for a condo I would not see your listing.

    • When I was a semi-landlord renting out legal space (i.e. roomates) in my house I always set an asking price for rent higher than my target/actual rent. This would weed out the bottom feeders, then if I met a potential tenant I liked, I could drop the rent during the interview, or let them negotiate down. Most times, there was no adjustment from either party. A couple times I used CL and put a number in the heading, but a lower number within the text of the ad. Most people just scan the listings and don’t bother reading details. I had very good luck and only 1 bad tenant/housemate over almost 16 years.

    • I agree that you seem to have priced low, possibly too low. I live nearby on the other side of Rhode Island Metro, closer to downtown, but I would expect to pay at least that much for a 2 bedroom apartment — much more for a 3 bed. If your condo has not be renovated recently, and if this is a long-term plan to keep renting it out, it seems like you might want to make some minor cosmetic upgrades and charge a higher price.

  • Have you posted the opening on the neighborhood listservs? I live in Langdon so am on several of them, and frequently see people posting about rentals. Since it is a pretty tight community, relative to other neighborhoods I’ve lived in in D.C,, I think people feel like they can trust someone who is referred by a neighbor.

  • FYI – If you fall under the Fair Housing Act (do you have a federally financed or backed loan? do you own more than three units? is it an apartment) discrimination on the basis of source of income is illegal. The specifics are available here:
    http://ohr.dc.gov/sites/default/files/dc/sites/ohr/publication/attachments/FairHousingAct.pdf

  • Discriminating on the basis of income is illegal. Don’t do it.

    http://washingtondc.craigslist.org/doc/apa/5605474053.html

    • “Discriminating on the basis of income is illegal.”
      .
      That’s not true. Discrimination on the basis of income is completely legal. If someone making 30k a year wants to rent a 5k a month apartment and can’t show they have money for it, you are completely within your rights to deny them.
      .
      Housing discrimination on the basis of source of funds (different that income) is illegal under the FHA, but with a large number of exemptions.

      • The D.C. Human Rights Act prohibits landlords from discriminating against people based on source of income. That’s whether you get federal financing or not. Check this out: http://www.equalrightscenter.org/site/DocServer/7.14.09_ERC_settles_with_Woodner.pdf?docID=1321&AddInterest=1163

      • Source of income and amount of income are two very different things. You cannot discriminate against someone in the voucher program if the voucher, plus their personal income, can cover the rent. You don’t have an obligation to rent to people who can’t afford your place – would that even be considered discrimination?

        • This; in my recent rental searches, “no vouchers” or “currently not accepting vouchers” was common; but so was “vouchers only.” I think that some landlords do not want the risk. I really get it. More than one house we went to were first time landlords renting out the home they were moving from that was not bought as an investment property, so there was still that emotional connection to the house (not to mention financial). The house we ended up renting was bought as an investment property, however, they put a HELL of a lot of money into it, honestly way too much for a rental. In the case of this house, they very much wanted a family who would take care of the home as if it was there own, and even turned down groups of professionals because they did not want it to be a group house.
          .
          I don’t think there is anything wrong with landlords not accepting vouchers. Rightly or wrongly, they should have a right to protect their investment.

  • slightly off topic, but i wanted to plug TransUnion Smart Move screening service. It’s great. You (Landlord) can pay, or have the tenant pay. I don’t really want my potential tenants SSN, DOBs, etc. This service screens them and returns the results to you. Never let me down over the 5 years I rented out my place.

    • +1 for TransUnion SmartMove. I use it as well and love the information it provides me about potential tenants. If you bank with USAA you get a discounted rate and it is only $12 for a credit, background, and eviction report!!

  • Those voucher requests are going to roll in at most price points and in most neighborhoods in D.C. You can evict a voucher tenant for not making their co-payment, but most landlords get complacent and are just happy to get the government’s portion so they don’t pursue it. They get stuck in a bind later when they find out that their place is trashed, there are people living there who aren’t on the lease and there is criminal activity on the property. They try to evict based on the fact that the tenant has not made the co-payment but the Court will say that they weren’t consistently demanding it from day one, so there is precedent there. If you are in an area where you can get a market rent tenant, I would go for that. If you are in Congress Heights or Savannah Terrace, then go for a voucher. In my opinion, you are better off letting the place sit empty rather than rent it to someone who will destroy it. Keep in mind, there is also a good chance that your neighbors will be calling you constantly to talk to your tenants about various things like loud music, people hanging out front, smoking, dogs barking (“that’s weird, I told them that I don’t allow dogs”) and other things that you cannot control. Someone who gets something for free cannot appreciate it as much as someone who has to pay for it. People with vouchers certainly deserve a place to live. Unfortunately, a small landlord cannot take that risk. There are big management companies that are structured to deal with these situations and I would leave it to them.

  • I have a rental property in MD and rent to a section 8 approved tenant.
    .
    I have had them in for over a year now and had zero problems–they’ve been excellent tenants. I will say the difference in MD is that the state sends me the full cost of the rent and the tenant pays the state the percentage she owes based off of her income.
    .
    It sounds like that is a model that DC should consider if they want to help homeowners open to renting to all applicants.

  • my advice: spend an hour meeting with a landlord’s attorney (if you to to L&T court you can see which ones have such a practice that the court reserves meeting rooms for them–those are the folks you want to meet with). It’s worth the money to make sure you don’t do dumb stuff that will get you sued, like engaging in source of income discrimination or posting about it on widely-read blogs.

    And if you’re too cheap to do that, at least read the landlord-tenant survival guide on OTA’s website.

    • Any names you could recommend? I’ve been looking for a L and T lawyer to draw up my lease to make sure it is as airtight as possible. I’m trying to be proactive where I can to prevent any future problems

  • I have two excellent vouchered tenants and know lots of landlords who mainly target vouchered tenants. The advantage, of course, is that HUD (via the state agency) transfers the rent directly into your bank account on the first of the month. Every month. You cannot beat that for stability of income. It’s better than some 9-5 jobs.

    But just as you would with market tenants, you have to screen vouchered applicants thoroughly. Just because they have a voucher doesn’t mean they are suitable tenants. So that means not just checking credit records and criminal records and pay stubs, but call their employer (and prior employer if possible), and their current landlord. If an applicant won’t provide her landlord’s number, she is history. That landlord will give you the best and most important information you can find out about someone who might occupy your property. If the landlord’s information is out of line with everything else you have discovered in your screening, something is fishy. So maybe you discount the landlord or maybe you recheck everything else. Use your judgment.

    What eventually happens is a picture of this applicant emerges from all these little bits of information, and that enables you to make a decision. Like if they got in minor trouble with the law ten years ago but have now held down a job for five years with no other criminal activity, that may be good enough for you. But if someone was arrested last year for assault, umm, maybe not. All information about criminal convictions should be available through online court records.

    One other thing some very successful landlords have told me (but I have not done) is, when you get all the references and records checked out, make an appointment with the applicant to visit her at home. What you see there is what you get at your property. I haven’t done this because I happened to have very fortunate circumstances that led me to both my tenants, but the next time I rent I expect to do this.

    Go to BiggerPockets.com to learn more about real estate investing (that is what you are doing) and specifically about investing in rentals. You will find major horror stories also, which will tell you a lot about what not to do.

    Above all do not listen to people on this blog who tell you to lower your rent! Goodness! You made the investment. You know what it cost you to buy and what taxes you will pay, and what the insurance will cost, and you know you need a reserve for emergency repairs. Only you what you need to collect in rent. If you are getting applications you are not out of line with the market.

    You can be successful with this. Good luck to you.

  • If a qualified market rate tenant hasn’t scooped it up and it’s on Craig’s list, the rent is too high . Different properties in different neighborhoods command different rents at different times of the year. A landlord’s carrying costs have nothing to do with market rent. Investing in rental properties is about the long term. The tax benefits should make up the difference if you have to eat some cash every month but never price a property based on what you need to cover every month.

  • Also, be careful talking to their landlord. They may be lying to you because they want to get their problem tenant out of their house and into yours.

  • Tricky situation and one that I’ve been in. I regretted inheriting a section 8 renter, but obviously that’s just an anecdote and certainly not all go awry. I was lucky to get 95% of the rent directly from DCHA so even while dealing with problems, nonpayment of nearly all of the rent was not one of them. More generally speaking, from an investment standpoint, it’s certainly much riskier than renting to market rate renters, and you are nowhere near sufficiently compensated for that risk. DCHA bureaucracy is pretty awful too. So my advice is to stay away.

  • Don’t forget to check court cases online to see if they have had issues in the past. History repeats itself. A section 8 neighbor of mine has numerous previous liens and evictions. If the landlord had taken the time to look that up, maybe they wouldn’t be hiring an attorney for non-payment and running back and forth to court.

  • You’re renting it too low, so all the 20 somethings probably think its not nice/a scam. I live in the area, and I’d put it at 2,400 or 2,500, put up a lot (a lot, seriously so you don’t look sketchy) of photos, and put in that a background check is mandatory.

  • People have a right to do what they want with their property but I think it’s sad that every person with a Section 8 voucher is off limits because of a few anecdotes about a few bad experiences with Section 8 tenants or neighbors. Every story that’s told about a Section 8 tenant not paying rent, partying too much, trashing a place, etc., can and has been told about all manner of non Section 8 tenants.

  • NO!! NO! No! Don’t ask why…just Don’t do it!!

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