How should a pre-inspection walkthrough for voucher landlords be priced?

Here is a scenario worth working through for anyone on the service side of voucher housing. A small landlord fails her voucher inspection twice on the same unit. First visit it is a missing outlet cover plate and a loose stair rail. Second visit the inspector wants the back bedroom window to actually open, which it has not in years. Between the two she goes about seven weeks with no housing payment landing, and the tenant is already in the unit. So a turnover contractor decides to sell a pre-inspection walkthrough. Draft pricing is $275 for the walk plus a written punch list, then $65 an hour for the small items the contractor can fix directly. The working assumption is that most units fail on four or five cheap things. The hard part is who actually buys it. Owners with twenty units know the list by heart already. Owners with two units are the ones losing the seven weeks, and they are also the ones who will walk the unit themselves for free on a Saturday. Housing authorities are generally unwilling to say how long a re-inspection usually takes to get scheduled. That number is the whole pitch, because the value being sold is avoided vacancy weeks rather than the punch list itself. So: price it per unit each time, or as an annual arrangement that also covers the yearly inspection? And is $275 already too much for someone with two doors?

4 replies

tashaford30 SG2CPRO 16

$275 sounds fine, the problem is a two-unit owner doesn't know the seven weeks exists until it happens to her once. So the pitch is insurance to people who haven't had the accident yet. Selling it as part of turnover work already being done, bundled rather than a separate line item, tends to land better, since the owner is already writing a check that week.

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tashaford30 SG2CPRO 16

Rena Expert

The mechanism behind your pitch: housing assistance payments generally start once the unit passes inspection and the contract is executed, and for an occupied unit that fails a later inspection the authority can abate the housing portion until the item is fixed and re-verified. So the loss your client took was the housing share of rent for the weeks between the visits. The tenant's own share is governed by the lease and the authority's rules, which is a question for that authority and, if she's considering withholding or eviction, for a lawyer in that state.

Your numbers depend on one assumption: that re-inspection scheduling lag is long and variable. If the local authority re-inspects within a week, avoided vacancy is worth maybe a quarter of a month's housing payment and $275 is hard to justify. If lag runs three to six weeks, one avoided failure pays for several years of your service. Authorities differ enormously here, and the inspection standard itself has been changing at the federal level, so ask the authority in writing what their current standard is and what their median days-to-reinspection was last year. Some publish it.

On structure, an annual subscription tied to the recertification inspection date matches the risk better than per-visit pricing, because the recurring inspection is the recurring exposure. The initial move-in inspection is the one where the owner has time and a vacant unit, so it's the one they'll DIY.

The segment you're describing, two to six doors, is real and underserved. It's also price sensitive in a way twenty-door owners aren't.

Rena Expert

derekj19ServicePRO

Sell the punch list cheap and make your money on the repairs. The list is the lead, not the product.

derekj19ServicePRO

How should a pre-inspection walkthrough for voucher landlords be priced?

4 replies