Let's face it, finding stable and impactful investment opportunities in the current market can be a bit of a challenge. But what if you could do well financially while also making a positive difference to a community?
Take a look at our overview of what investing in social housing really looks like, and why we at Brentor Property absolutely love it!
What is social housing?
Social housing is affordable housing provided by the government or housing associations to support individuals and families who need it. It plays a crucial role in ensuring everyone has access to safe and secure shelter, regardless of their financial or personal circumstances.
Why invest in social housing?
We could go on and on about this but here are our headline reasons to consider social housing as part of your investment portfolio:
Financial benefits
The biggest one... It's a pretty stable and very reliable income.
Social housing tenants tend to be lower-risk, with rents often linked to income or set at affordable levels. This translates to high occupancy rates and a more predictable income stream compared to standard BTL properties.
Due to the high demand for social housing and government support, social housing investments can offer attractive returns, typically ranging from 8-10%. With most being on Government-backed long-term leases (up to 20 years), they can become very attractive.
Add into the mix that there are often inflation-linked rent reviews, they are pretty key to providing consistent income with reduced tenant turnover.
Unlike the private housing market, which can be more volatile, social housing is less susceptible to fluctuations in property values, making it a more stable investment.
Social impact
We like to call it feel good investing.
By contributing to a critical need and investing in social housing, it helps address the critical issue of housing affordability. You can feel good knowing your investment directly contributes to providing safe and secure homes for people in need.
Social housing plays a vital role in building strong communities by providing affordable housing options for key workers and vulnerable individuals, fostering community stability and economic growth.
What's not to love?
Is social housing investment right for you?
While social housing investment offers many advantages, it's essential to consider your individual circumstances and risk tolerance before making any decisions.
With longer leases and the specialised nature of the market, this strategy does offer less liquidity. It can sometimes be challenging when you come to selling social housing investments can be challenging compared to traditional property. So if you're looking for a quick exit strategy, it's probably not the one for you.
Management responsibilities typically fall to housing associations, meaning investors may have less control over tenant selection and property management decisions.
Social housing also relies on government funding and policies, which could change in the future and impact returns.
Getting Started
If you're interested in learning more about social housing investment, as always, we suggest that you do your due diligence in order to make informed decisions.
Understand the specific risks and rewards of this investment option in the context of the current market and your financial goals. Make sure you consult with a financial advisor or investment specialist with expertise in social housing. They can help you evaluate your options and make informed decisions.
So, if you're looking for an investment that offers both financial stability and social impact, consider exploring the world of social housing. You might be surprised at the rewards it has to offer.
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