Affordable housing is among real estate’s most demanded markets. It provides a lifesaving solution to many people. Amid COVID-19, affordable housing saw one of the largest increases in demand as well.
However, it’s a common headache for property management in Nashville—and everywhere else. It’s still a solid business investment for any company, but that’s not the problem. It requires managers to track multiple variables, factors, and compliances.
What does affordable housing mean for management companies? What can you do to make your life easier? That’s today’s topic.
What does affordable housing mean for property management?
In essence, affordable housing is a program aiming to provide low-income populations with a place to live. While it’s often seen as part of Section 8 clauses, they’re not the same. In essence, affordable housing is a tax incentive for real estate firms.
It strives to motivate cheaper rental prices that people with lower salaries can afford. Property management in this sector isn’t too different to other markets, but you need to keep several issues in mind.
You can’t give a property tour and have residents move in the next day. You must be sure that your applicant is a low-income resident. Therefore, you have to request their employer’s payment information, lack of child support, and more.
The same certification process will repeat itself after your initial lease completes. You’ll have to go through the same steps to assess whether or not your tenant still qualifies for affordable housing. Make sure to start at least three months and study self-certification possibilities.
It’s vital to comply with every rule within your program. Failing to do so yields costly consequences to the tax credit holder. Keep in mind that too many mistakes can result in the government revoking your credit claim.
Insight for affordable housing management
NeighborWorks America published a detailed research paper on affordable housing. We highly recommend you to read it if you’re interested in the implications behind the program. However, it’s an extensive document that goes through several topics not related to our focus.
The most curious section for our current concerns is the implications they point out for property management. Of course, you need to research and educate yourself on all the nuances we mentioned already, but these three tips can make a huge difference for your company.
Communicating with nonprofits
Engage with nonprofits you work with during annual budgeting. You want to assess their goals and the criteria they care about for the property’s long-term success. Therefore, you can focus on the most important issues for owners.
Remembering it’s still a business
Property management in Nashville should still care about operating budgets and the property’s returns. Economic inviability nullifies any contributions your company can make to a community, especially when the necessary resources can’t be allocated due to budget constraints.
Finally, make sure you work with high-quality personnel. That’s one of the main challenges because of how it’s difficult to offer competitive salaries when working with affordable housing. Therefore, invest in constant training and create reward programs for employees.