Affordable housing is aimed for families that lie in the middle or at the lower end of the income scale. When you plan to invest in affordable housing, here are a few things that you must consider beforehand.
Always Get the Property Inspected by a Qualified Company
I recently had a property that required extensive water damage repairs. It was absolutely terrible and due to not getting a high quality inspection. There are rules of thumb for how much you should spend on upgrades, maintenance, and repairs. Don’t exceed them or your profit will be wiped out!
Target Tenants of the Affordable Housing Scheme
Since the housing costs and income of people vary in different areas, the government has divided the country into different areas. The eligibility criteria based on your income is different in each area. Before you plan to invest, search the income range that are targets. The higher the income target, the higher profits you can generate by renting.
Signs of Forthcoming Investment
Investment in real estate is not dependent on plans instead it depends on the reality. Property prices tend to change with the happenings in the surroundings. When a nearby neighbourhood is announced to be developed, the house prices rise dramatically in the vicinity.
When you plan to hit an area for affordable housing, study your investment range and details about any upcoming federal, state or municipal projects in the area. It is thoughtful to invest in an area where a new business centred construction is in progress.
The reason that such areas are more profitable is that while on-going construction activities tend to decrease the property prices, the completion of such projects will enhance the prices twice or thrice.
Signs of Neighborhood-Level Deal-Breakers
It is important to investigate the neighbourhood before you invest in a real estate there. The local deal breakers are quite simple and easy to investigate. For example, if the crime rate in the proposed area is higher, don’t invest there. If the surroundings are not safe or the people living there don’t share a good reputation, don’t invest. Anything that has a tendency to destroy the structure of the vicinity in coming years serves as a deal breaker. Note them and break the deal.
Look for the Hidden Gem
We understand that you want to have the best of basic facilities. A well furnished home that is long lasting and full of amenity. This means you have to undergo a detailed investigation for every potential house. The last renovation, the condition of insulation, wirings, plumbing, you need to consider everything. If you need to redo all these things, that calls for an additional cost.
When you have to spend extra money on such arrangements then why not look for a place that’s a total mess but in a decent area? Does it sound weird? Let me explain why!
The visual appeal in such areas can be fixed in far less price than it will take on repairing the wiring, insulation, plumbing etc.
Another hack to increase your property value is to find a place near some school, shopping center, or highway. You can demand a handsome rent for a house on such a place.
Security Measures in the Area
Though the area is aimed for low income tenants, still you want some safety for your property. Look for the security measures in the area and see what security upgrades you might need. As much as you do upgrades on the outlook of the property, the same effort is required for the security of your property.
Keep these points in mind before you invest in an affordable housing and see how the curve on your profits graph goes higher.