Why You Should Invest in Low Income Housing
Making money off of real estate is all about strategy. You have to get into the game with a purpose and know which pieces of property are going to deliver the best return on your investment. You may have already decided that you're going to rent out the next few homes that you buy, but maybe you don't want to go the traditional route. Investing in low-income housing can offer tremendous returns that you might not be able to generate any other way.
Guaranteed Rent Is a Plus
When you obtain tenants using the common methods of digging through applicants and performing a background check, the results aren't always favorable. No matter how thorough you are during the selection process, there is just no guarantee that the person you choose will actually follow through with paying their rent each month. If the tenant fails to pay in a timely manner you won't be making any money. After the individual has lived in the house for a while they might actually decide to stop paying altogether and become a squatter. You then have to go through the hassle of enduring the legal process to have them evicted.
Renting to people who qualify for affordable housing means that you are almost guaranteed to get your rent each month. A portion of the rent is subsidized by the government so as long as you price the unit correctly, you should be able to come out on top even if the tenant isn't able to produce the small amount that they are required to pay on a monthly basis.
Build for Less with the LIHTC
If you want to build a new housing development but don't have much money at your disposal, you might be able to get the development subsidized with the Low Income Housing Tax Credit (LIHTC.) The LIHTC rewards private investors who are willing to build new construction housing for low-income households by granting dollar-for-dollar tax credits to help with the costs. The credit can also be used if you have located a building that just needs a little rehabilitation before it will be habitable. You'll be saving lots of money and doing the community a great service by investing in homes for people who aren't able to pay regular rental rates.
Putting your investment dollars to work is all about knowing where they will do the most good. Consider investing in low-income housing, and you'll be placing yourself on the track to real estate success.
Share