Many people choose to invest in low-income houses and apartments because it is a way to earn money on your investment, but more importantly, it also fills a void in many communities. If you choose to invest in properties specifically for low-income individuals, there are ways to be successful.
Find Appropriate Neighborhoods
Unfortunately, many communities have neighborhoods with high crime rates and other undesirable characteristics. This often makes purchasing an investment property inexpensive, but it is more costly to you in the long-run. Finding properties in better neighborhoods may cost more upfront, but they will be more desirable and will be rented out quicker.
Additionally, the costs associated with investment property management in a less-than-desirable neighborhood could be exuberant, especially when the property is unoccupied. Unoccupied dwelling tend to be the target for vandalism and other forms of property damage. You must also consider the perspective of renters. Although their options may be limited when they are low-income, you will still have a high turnover of renters if your property is located in an undesirable area. Having renters who move out frequently will also reflect negatively on you.
Consider Renovating Motels
Turning motels into individual apartment units is an excellent way to solving a low-income housing problem while having an investment property. One of the advantages of using this method is you are serving a demographic that is typically the last to find low-income housing or may not be given the opportunity at all. Often with low-income housing assistance programs, individuals or couples with children are prioritized, which can make it difficult for single adults or couples without dependents to find affordable housing. Motels are an ideal structure to renovate into efficiency or studio apartments. You might also choose to knock down adjoining walls to turn two motel rooms into a larger, more comfortable apartment with a dedicated bedroom or two.
Find Small Homes
Similar to renovating motels, finding smaller homes for your investment property can also be a way to provide more housing opportunities to people without children, the elderly, or people with disabilities. Small, single-story, one-bedroom homes will generally be less of an upfront investment and have many attractive features, especially for people with a lower income who must also take into consideration the monthly costs associated with utilities and the added expenses of living in a house versus an apartment. In many cases, even with rental assistance for low-income individuals, they might need to pay for water, sewage, and sanitation if they live in a house, whereas this might be covered by the rent in an apartment. From the perspective of the renter, a small house will likely mean lower utility costs each month, making it more reasonable.
Investing in rental properties for low-income individuals and families is a worthwhile project, especially as many communities are seeing a rise in the number of people who need affordable housing.Share