In my last blog post, I covered Proactive vs. Reactive Property Management, with one of the key points being that people are less likely to spot new opportunities when they are constantly reacting to situations and putting out fires.
One such opportunity to be aware of is the new era of Workforce Housing and how it is filling a rapidly expanding gap in the marketplace, as the price of home ownership and even renting continues to rise in many urban centers like San Francisco, Seattle and Denver. As confirmed by a recent GlobeSt.com article, investors are recognizing the great opportunities that exist in this sector — not only to see returns on investment, but to really make a difference and help to build strong, sustainable communities.
Workforce Housing is intended for households with incomes that are insufficient to secure quality housing in reasonable proximity to the workplace. Historically this type of housing has been targeted at “essential workers” such as police officers, firefighters, teachers and nurses as well as service workers in resort towns. However the scope of contemporary workforce housing is expanding to include people in a variety of different fields who aren’t really considered low income, but are still having trouble affording even rental housing in a hot market.
What’s important for landlords and property managers to note is, these people typically make great tenants. They are hardworking responsible citizens, often with families, who just want the opportunity to live a good life in a safe community where they can work, live and play.
However the major challenge for this sector is that government subsidies are available to “affordable housing” projects, but not to workforce housing — making it difficult to offer moderately priced housing in high demand markets. Investors are overcoming this challenge by focusing on value-add real estate investments. They acquire Class B and C assets at a lower cost in Class A locations, and then renovate the properties to bring them up to middle class standards.
Technologies like Property Management Software and Community Management Portals also make a significant contribution to the viability of modern workforce housing, as they automate time-consuming processes and allow property managers to do more with less staff. Lower operating costs will help make it possible to set rental prices more modestly.
And there’s even more good news if you’re considering venturing in to this developing sector. Marketing to this niche in order to fill vacancies should be relatively easy. Not only is demand high and current supply low, but you can appeal to the emotions of this target audience with sincerity. Generally this segment of the market is forgotten and their plight goes un-addressed, simply because they make too much money to be considered low-income and in need of assistance.
So if you can get across in your marketing efforts that you understand their needs and want to give them a safe nurturing place to live and raise their families… you’re golden!
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