Make Investments In Affordable Housing For Purpose And Profit Scott Rister
A successful real estate investor is more than just a landlord. They are the savvy business executives who focus on maximizing their profits while creating value for their clients. There are two terms in real estate one is affordable housing investment and second is business and investment strategy. Today we will talk about affordable housing, affordability in the target market, followed by profitability and marketability, issues that make a good investment growth. Here we look at financing, action steps, and the wider business and social implications that bring in affordable housing investment. Below are some points that we need to put lights on:
• Affordability: This is the most important factor as it determines two important things: profitability and marketability. Subsidized housing programs help lower income families afford the rent by paying a portion of the market price for the rental units. For the affordable rent calculate 30% of the median income and the expected gross income per affordable rental unit.
• Also make sure you calculate the median income for the principle, interest, property tax, homeowners insurance, and association fees. Once you have made all the decision, then based on these calculate the sale price of your home and the interest rate in that area, for better results take help from a bank or mortgage professional who will help you determine the points quickly.
• Profitability: Well this can only be determined once you know your operating expenses. When you consider the rental property start by adding taxes and insurance you pay as an owner. Also make sure you calculate the utilities if you pay any. Make sure you know every expense and calculate every bit as this will determine your cash flow. The depreciation will affect the tax liability and have varying effects on the actual cash flow or the real net profit.
• Ensure Marketability: Focus on locating and modifying units that meet guidelines for rental subsidies that are available through the local housing units. As a seller, you need to focus on minimizing construction and rehabilitation cost of the units that are going to be sold in the market. A simple logic works here if it is not profitable it is not marketable. Foreclosed homes can be a great option, you can also look for 2 to 4 family homes that have been abandoned for years due to foreclosures. Rehabilitate and resell them to make the most of it.
A successful investor will know when and how to move in a market. Make sure you perform a complete analysis a before you make a decision. Don't just be a landlord, be an investor, and a business executive as well. When you make an investment you create a market by helping families and creating a community. In most cases the best properties in the most desired market areas at best prices turn into profit.