Investar USA – Why Workforce Housing Will Continue to Produce the Biggest Multifamily Returns

Workforce housing investment may be the smartest strategy going into 2019. According to a report by the United States Commercial Real Estate Services, workforce housing has outperformed other multifamily asset classes by a substantial margin. The following article from Investar USA discusses the reasons behind the growth of workforce housing. Investar USA is currently focused on real estate investment in the Southwestern U.S.

Luxury multifamily buildings are the most popular assets among experienced real estate investors, yet they might not be the most profitable, or the most secure. Workforce housing, also known as Class B or affordable housing, may deliver the greatest potential for long-term returns. Here are a few reasons why workforce housing could offer the best ROI for all levels of investors.

Affordable housing will always be in demand.

The demand for workforce housing is high, and likely to get higher. There are currently more than 13.5 million rental households classified as workforce housing, and the exodus of people from high-cost regions like California isn't diminishing. States and cities are increasingly offering tax benefits and other incentives to increase the number of workforce housing units.

Communities prefer the renovation of existing buildings to the construction of new ones.

Value-add investment may be the tactic of choice for cautious investors. The demolition of older apartment buildings for new luxury units has been a controversial strategy in markets like Los Angeles – developers have been accused of cannibalizing potential workforce housing opportunities and driving lower-income residents out of their own communities. As a result, community activism has been on the rise, and developers find themselves navigating protests and lawsuits, while their project timelines become indefinite.

The renovation of workforce housing preserves older buildings, improves conditions for renters, and helps neighborhoods and communities maintain their identities.

U.S. wage growth has been slow.

While job diversity is increasing, wage growth has stagnated in the past decade. This has driven the volume of renters ever higher, since families are increasingly unable to purchase homes outright. This high volume of renters has created a high demand for affordable rental units.

Workforce housing is increasingly positioning itself as an attractive investment, and a value-add strategy could present a superior ROI. With the workforce housing shortage projected to continue through 2019 and beyond, smart investors will recognize that this may be the year's greatest investment opportunity.

Investar USA specializes in revitalization projects throughout the Southwestern United States.

Comments

Post a Comment

Popular posts from this blog

Ron Cadman: Should You Invest in an Apartment or a Single-Family Home?

With the spring season in full swing, you may be gearing up to embark on some real estate investing. The question is, should you invest in a single-family home or an apartment building? Many investors become intimidated by apartment buildings that feature more than five units. However, large apartment units carry great promise for investors when compared with single-family residences, according to Ron Cadman, a co-director of Investar USA development firm. Here is a rundown on why you should invest in an apartment building this spring. The biggest reason to invest in an apartment building is that valuations are handled differently between an apartment complex and a single-family home. With the latter, your property value will end up fluctuating when you compare your home with your neighbor’s. However, a larger apartment complex is valued based on the income approach. With this approach, the value of your property will depend on your building’s net operating income, not on neighboring
Read more

This is not a typical recession says Ron Cadman of Investar USA.

  This is not a typical recession says Ron Cadman of Investar USA. This is not a typical recession says Ron Cadman of Investar USA. People have lost jobs due to a government induced recession and Congress decided to break until September with no regard for the mess they created. Politics is taking priority over collaboration and addressing the real issues impacting America’s working class resulting from Covid-19. Those of us with hard assets are fine and are seeing asset values rise while the working class have lost jobs and are sliding deeper into debt. According to a recent analysis by John Friedman, an economics professor at Brown University, U.S. stocks are hovering near a record high, a stunning comeback since March that underscores the new phase the economy has entered: The wealthy have begun to recover. The bottom half remain far from it. This dichotomy is evident in many facets of the economy, especially in employment. Jobs have returned for the highest wage earners,
Read more

What’s in store for the housing market in 2020?

2020 is fast turning out to be an up-and-up year for the housing sector, driven by increased job markets and low mortgage rates. However, those in the market for a new home this year may have problems looking for one, according to Ron Cadman of residential and commercial property developer Investar USA. Real estate professionals say that generally speaking, the growth of the housing industry this year will be solid but modest and will carry over to 2021. This is driven by expert anticipation that the sector will finally have a real effect on GDP growth. And because of the mixture of more people getting employed and interest rates plummeting, consumer spending will increase, and more people will be shopping for new residential properties. The positive developments are bolstered by the recent signing of the Phase One deal in the ongoing U.S.-China Phase trade talks. And, though much has yet to be done to improve foreign relations with the Asian nation ultimately, players in the r
Read more