Does the idea of a never-ending stream of potential renters, many of them with guaranteed payments, lining up to apply for your vacant apartments sound appealing? Then you might want to consider renting to lower-income tenants.
Before you rush to judgment, it’s worth taking a broad look at the current rental market. America’s affordable rental crunch means that the biggest segment of the population that needs housing is the one that can least afford it. For landlords willing to serve this growing demographic, a golden opportunity awaits—as long as it is approached correctly.
A National Shortage That Isn’t Going Away
If real estate is about supply and demand, there is an almost bottomless demand at the lower financial end of the market. The United States is short about 7.2 million affordable rental homes for extremely low renters, defined as those at or below the poverty line or 30% of the area median income, according to the National Low Income Housing Coalition’s (NLIHC) “The Gap” report. That translates to only 35 affordable and available units for every 100 extremely low-income renter households nationwide.
The report shows that roughly 11 million households fall into this category, with some states having more than others. However, as Renee Willis, president and CEO of the NLIHC, said in the report, “The findings from ‘The Gap’ show that no state or major metropolitan area has an adequate supply of affordable and available homes for extremely low-income renters.” She added that only about one in four households that need assistance actually receive it.
Western and Sunbelt States Are the Most Affordable Housing-Challenged
According…