Regardless of what the Federal Reserve does or which political party happens to be in power, the next economic recession is not a matter of if, but when. Despite the recent economic growth markers, current indicators put the risk of recession at a six-year high, according to Fortune — and 75 percent of surveyed CEOs expect a recession within the next two years.
While recessions are considered a natural part of the ebb and flow of global economics, they can still wreak havoc on your investments. This is why some experts say it’s important to include some recession-proof investments in your portfolio. If history is any indication, affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... is one of the most stable investments you can have in a correcting market.
Why Affordable Housing?
What makes affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... a recession-proof investment? Several key factors are at play here. Let’s explore a few.
- Affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... is always in demand. Regardless of the economic climate, affordable multi-family complexes usually have a wait list of qualified tenants waiting for vacancies, especially as market rent rates continue to rise.
- Demand goes up even more in a recession. As incomes drop and more people tighten their budgets, the need for affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... gets even higher, making ROI much easier to attain. In addition, the value of your portfolio itself goes up due to increased demand for recession-proof properties among investors.
- Reliable cash flow. Because most affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... qualifies for government subsidies in the form of tax creditsA reduction in tax liability. Benefits an owner of a property claims under the low-income housing tax credit program. or Section 8The housing assistance payments program that implements Section 8 of the United States Housing Act of 1937., rental income is more stable for affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... during a recession. By contrast, luxury rentals often struggle to fill vacancies and experience higher rates of rent defaults during a recession.
What Types of Affordable Housing Should You Invest In?
While occupancy rates are reliable with nearly any form of affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af..., some investments may still be more profitable than others. You may have no trouble keeping tenants in a Section-8 qualified single-family home, for example, but the upkeep and maintenance for a home housing only one family might not always be cost-effective.
In a recession environment, there are generally two types of affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... that offer the best value for the cost:
- Affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... for seniors (55+). As more and more of America’s population enters the Golden Years, the need for affordable senior housingA property that is reserved for people who are seniors. Please Note: the definition of "senior" may vary. As always, it is important to talk with the property manager and visit the property prior to m... is only set to increase in the coming years — and even more so in a shrinking economy.
- Multi-family housing. In times of recession, more individuals and families gravitate toward affordable apartment and multi-family units, not only for the lower rents but also to escape the cost and labor of upkeep. From the investor perspective, this is a win-win because the cost of upkeep for one property with multiple tenants is much more cost-efficient than upkeep for a dozen single-family dwellings on separate lots.
For best results, the time to seek out recession-proof investments is before recession hits. Olympia ManagementOlympia Management, Inc. exists to meet the needs of the affordable housing community by providing top-quality living conditions, excellent management, compassionate interaction with tenants, and cons... manages and maintains attractive, comfortable affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... complexes throughout the Southeastern U.S. To learn more about opportunities to invest in affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af..., give us a call at 256-894-2382.