Post COVID-19 global pandemic, the demand for affordable housing seems to have gone up dramatically. The high-rise exclusive projects are undoubtedly overpriced. There is hardly any scope for hiking the prices in the future that indicates that you will not earn good returns if you are thinking of investing in such premium projects.
Moreover, there is bound to be a considerable risk if you are investing in these projects. On the other hand, affordable housing projects provide better investment options and guarantee low risk because these projects will fetch much higher prices in the future.
Maxwell Drever explains that property investors are used to operating much like business managers and portfolio managers who focus their attention on maximizing profits while generating value for customers. Remember that investment towards affordable housing projects could prove to be an investment stratagem and even a business.
Affordable Housing Defined
The purpose of investing in affordable housing is to provide housing for individuals with limited income. Moreover, property owners will be receiving tax credits, provided they utilize a percentage or portion of their property for affordable housing. However, the government will assist the renters in paying their monthly every month. Let us explore the groups of people who are actually in need of and looking for affordable housing.
Groups of People Looking for Affordable Housing
Four groups have been identified as people who need affordable housing.
Senior Citizens & Disabled Persons
Individuals over 65 years of age and even people who have certain disabilities comprise a substantial percentage of the population in the United States. These people are looking for affordable housing that is near public accommodations and suitably modified to make everyday living a much better experience.
Students
The ever-increasing population of the non-traditional and adult university and college students has intensified the need for affordable off-campus housing. We understand that adult students who have families will be requiring private housing near the campus. Moreover, international students require housing that seems to be available throughout the year since it is pocket-friendly and relatively more convenient than recurrent international travel during summer breaks or on holidays.
The Military
Military service members are given the option of housing on or off base. On-base housing necessitates property management, construction, and grounds maintenance. On the contrary, off-base housing necessitates custom construction, additional location assistance, and even purchase financing. Investors in affordable housing for military service members need to be conversant with federal contracting. They need to be aware of the specific guidelines provided by the state for all branches of service.
Homeless Individuals from Re-Entry & Rehabilitation Programs
Homeless, recovering addicts and their families and individuals recently released from any correctional facility need transitional housing. Moreover, some children and adults in mental health programs and state protective services need neighborhood-based housing or group homes.
Things to Know about Investing in Affordable Housing
- According to Maxwell Drever, affordable housing is very much present in the portfolios of several real-estate property investors primarily because of the related government tax credits.
- Property investors, who are thinking of investing in affordable housing, should make sure that the investment is marketable and profitable in their area.
- Investors should do all calculations accurately including purchase, renovation, and maintenance costs. It will go a long way in determining the viability of the investment proposal.
Steps to Take for Affordable Housing Investment
A Brief Action Plan
- Gather accurate information. Acquire sound knowledge of affordable housing in your area or across the nation.
- Stay dedicated and involved. Create a market for specifically affordable housing. Focus on identifying a niche in your locality and filling it. It is a good idea to get into partnerships with compatible financiers or investors.
- Focus on being a profitable investor. Concentrate on applying traditional investment wisdom and business stratagem advice.
Conclusion
Affordable housing investors should keep in mind that they help generate employment opportunities for real estate agents and construction workers. They are instrumental in creating personal profits and generating economic opportunities for communities and individuals via affordable housing investment.