When it comes to multifamily investments, workforce housing isthe most undervalued project that needs attention. From investors to investment advisors, local communities, and the mainstream media, all see how an undersupply of such housing projects is creating problems for workforce employees.

You are probably wondering whether the title is clickbait or misleading, right.

Though it is a period of recession, the time is just right. Here’s why:

You Provide Working Families With Affordable Housing

Right now, supply is low, and demand is high, and this creates the perfect opportunity for you to invest in workforce housing. Working families have a strong network, and more than one person in the family works. They have school-age children, and they are looking for houses that are near to a good schooling district.

Lastly, they want to avoid long commutes so that they can go to work and run errands such as picking up the kids from school, buying groceries, etc., at the same time. Their savings are not much, which is why they look for workforce housing.

Tenants Will Be Able to Meet Rent Demands

The purpose of workforce housing is to give working Class B and C people the feasibility to use just 30% of their income for rent and other related costs. In other market-rate projects, the numbers are high and force workforce employees to pay 50% of their income. You might not receive a high ROI, but cash flow will be steady.

Less Competition

Less competition means that a workforce housing project in an area will most probably be the only project. As a result, you are bound to receive multiple offers. Unit absorption will be shortened, and depending on high the demand is, you can invest in other nearby projects and expand your portfolio.

Long Term and Stable Income

Workforce housing is and will remain in high demand for the foreseeable future. It’s possible that the undersupply might not meet the demands for the next 50 or more years. However, there are many projects popping up, such as those by Maxwell Drever, that give you the opportunity to boost your economy and, in the process, secure an alternative means of stable income.

Undersupply is high in urban development markets. There are certain laws and rules on rents that make it difficult for people to afford accommodations and investors to create such projects.

In conclusion, investing in workforce housing during a recession is a defensive play that will have its ups and downs. The low vacancy rates with short supply and increasing demand is a recipe that can be changed to suit your investing needs. The possibility of an increase in rent is what makes workforce housing such an attractive project.

When considering the risks of this investment, there’s also a possibility that renters might not be able to absorb the increase in rent. Government intervention and rent control policies can also cause delays in the project.

Despite the risks, capital will continue to flow, which is why it makes sense to invest in workforce housing during a recession.