WHY YOU SHOULD BE INVESTING IN AFFORDABLE HOUSING RIGHT NOW
Why You Should Be Investing in Affordable Housing Right Now
Affordable housing is one of the safest investments you can make right now. The demand for affordable housing is going to continue to increase as inflation continues to drive up rents. Fewer apartment units were built in the last few years, due to high construction costs. This has led to heightened demand for apartments and an extreme shortage of affordable units in many parts of the country. If you want great returns on your money with low risk, then investing in affordable housing should be at the top of your list!
Demand for affordable housing is going to continue to increase.
As the price of home ownership continues to increase, more people are renting. This drives up demand and rental costs, but the rental option is still more affordable than purchasing a home. A recent report by the Joint Center for Housing Studies at Harvard University found that the number of households paying more than 50% of their income on rent increased by 5 million between 2005 and 2016. This trend has continued, meaning that there is a growing demand for affordable housing--and this demand is not being met by supply.
The Southeast U.S. is facing an extreme shortage of affordable housing units.
Affordable housing is defined as housing that costs no more than 30% of the gross income of the household--if you make $50,000 per year, then your rent should cost no more than $15,000 per year (30% x $50k). The Southeast U.S. is facing an extreme shortage of affordable housing units.
Florida especially needs affordable housing, as it has seen a substantial increase in population since 2000. Many people moved to Florida from other states because of the low cost of living, but that cost is rising due to the housing shortage. However, Florida is still far more affordable than states like New York and California, so during Covid when people transitioned to working from home, Florida got another large influx of migration. Florida continues to offer other perks, like no state income, beautiful beaches, and plentiful sunshine, so people keep coming.
Affordable housing presents an opportunity for a safe and lucrative investment
If you're looking for a safe investment, affordable housing is a great option. It's been proven time and again that rent growth will continue to outpace inflation for years to come. In fact, the National Association of Realtors predicts that rents will rise another 5% this year: they've been saying this since 2016 and it is still the case! It's comforting to know that your money is going somewhere with predictable returns on investment.
Affordable housing offers investors an opportunity to get in on a much-needed and potentially lucrative investment. When you invest in affordable housing, you’re investing in tomorrow by helping individuals, families, and communities find homes where they can live with dignity. As rents continue to increase at a pace much faster than wages, there will be more demand for affordable housing across the country—and that means there’s more opportunity for investors who have the foresight to recognize this opportunity. If you're looking for an opportunity with high returns and low risk, this asset class may be a perfect addition to your portfolio.