5 reasons to invest in Affordable Housing
It has become imperative considering the current macroeconomic environment that affordable housing is commanded with more attention than it has been thus far. Investing in affordable housing has plethora of advantages for an individual and also for the society. Discussed below are the reasons why it would be smart and wise to invest in affordable housing-
1. Demand- A house is the most basic necessity and per a UN report, by 2030, over 1.6 billion people will be devoid of adequate housing, which implies that the demand for affordable housing is only going to increase. So, setting foot in the door of affordable housing definitely seems like a very good gateway money making.
2. Social Outlook- Providing affordable housing has societal benefits which include making shelter available to homeless people, who may otherwise wouldn’t have been able to get a roof over their head. Along with this, affordable housing rejuvenates neighborhood and in turn contributes to the local economy. Investing in affordable housing has the potential to result in various positive outcomes, such as job creation, higher levels of consumer spending, and increased tax revenue.
3. Stable Returns and Steady Income- Affordable housing holds the potential to provide steady long-term income, though it may have modest beginnings. The returns are stable and predictable because demand for affordable housing isn’t volatile as compared to other investment avenues. It also invites longer-term tenants, and hence makes for a reliable source of long-term income. Since people would always need a place to live, even during economic downturns, the risk is substantially reduced.
4. Long Term Capital Gains- Because the demand for affordable housing is only ever increasing, the value of these properties is only likely to appreciate over time. As Governments and organizations shift their focus towards developing ore affordable houses, an investor can also receive grants and subsidies.
5. Government Support- Across the world, governments have begun to realize the importance of affordable housing and are supporting the cause by organizing programs and policies to propagate the same. The Low-Income Housing Tax Credit provides tax breaks to developers of affordable housing. Since this lowers the cost, affordable housing becomes an attractive investment option.