Investing in Affordable Housing
Affordable housing is a hot topic right now. However, there is a lot of misinformation about it, especially when it comes to who qualifies and what kind of properties are available. In this article, we’ll go over everything you need to know about investing in affordable rental housing and how it can make sense for your portfolio. Many cities have seen their affordable housing markets become increasingly tight in recent years as rents have risen and home prices have skyrocketed. This makes it harder for lower-income families to find homes they can afford, which leads to an increase in homelessness or overcrowding situations when people do manage to get their own place–and sometimes both!
What is affordable housing?
It is a type of housing that is affordable to low-income families. Affordable housing can be owned by an individual or family, or it can be rented from a private landlord. It’s important to understand that there are different types of affordable housing programs and they each have different eligibility requirements.
There is a growing need for affordable housing, as the cost of living continues to rise. In fact, according to the U.S. Department of Housing and Urban Development (HUD), more than half of all renters nationwide pay more than 33% of their income on housing costs.
Who needs it the most?
The most common groups of people who can benefit from affordable housing are:
- Low-income families and individuals, including seniors, people with disabilities, and those who are homeless
- Students who are working their way through college or high school and need somewhere to live while they do so
Affordable Housing Investing
Investing in this class of housing can be a great way to make money. If you have the right financial advisor and can afford to invest, this may be the right option for you.
- Tax Credits and Incentives -This form of real estate investing comes with many tax advantages that could help lower your overall tax bill each year. You can also receive incentives from various government programs that offset some or all of your initial investment costs. For example, if an investor purchases an apartment building with Section 8 tenants (people who receive subsidies from the government), then they may qualify for federal tax credits worth up to $2 per square foot of living space per year over 5 years! That’s a lot of money saved!
- Recession-proof – During recessionary periods such as 2008 when many investments lost value but not all did so equally; real estate investments performed better than most other types because they’re considered safe havens during times like these since there’s always demand for rental properties even when people aren’t buying homes anymore due to high unemployment rates across America which leads me into my next point…
- Consistent occupancy rate – Low-income housing tends not only to attract more people looking for low-cost options but also retain them longer than other types because occupants tend to stay put longer due to “tenant loyalty”–i..e., fear losing their low-cost apartments after putting down roots somewhere else due their unwillingness pay higher rents elsewhere (like what happened during World War II).
The demand for this class of housing is higher than ever before, and it’s only going to get worse if we don’t do something about it. There are many different types of affordable housing available for people who qualify, including Section 8 vouchers and public housing programs. If you are interested in learning more about how you can help provide affordable homes for others check out this discussion on Bigger Pockets!