HOW TO INVEST IN SOCIAL HOUSING

You may have read our other post on how social housing is a good investment and want to jump right in to finding your first social housing deal.

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Wanting to do it, and finding a suitable opportunity however is a completely different thing, as you may have seen on several forums – they aren’t always the easiest type of investments to acquire. Why is that the case? Well, in this article we will touch on what exactly social housing investments are for, how they work, the challenges & how to find them, so continue reading!

WHAT ARE SOCIAL HOUSING INVESTMENTS?

We’ve written a full post on exactly what social housing investment is to tackle the rather complex topic, but we’ll provide a quick summary here. Social housing is affordable housing for those who are considered vulnerable, and these are typically provided by local councils or housing associations. There is a large scale housing crisis in the UK and the Government are struggling to keep up with demand, so these associations and councils that they are linked to are providing opportunities for investors to be involved in that process and secure the Government-backed leases that are on offer.

This is a problem that only seems to be increasing over the years and it may well become a growing property investment strategy that you see more and more people get involved in.

WHO ARE SOCIAL HOUSING INVESTMENTS FOR?

At The Property Sourcing Company honesty and transparency is important to us, and we won’t try and place you with a property that we don’t think meets your specific requirements or circumstances. These types of investments don’t work for every investor, they are typically for the more experienced investors who are usually more flexible with their restrictions in regards to location, budget and property type for instance – although that isn’t to say that new investors won’t be interested the criteria is just fairly strict when it comes to these type of deals.

It’s not an investment that you come across everyday and they are different to a standard Buy To Let or HMO and you need to be able understand exactly how they work, which we can help with. These investments are perfect for those investors that want to be completely hands-off, are socially conscious and are looking to park money with a guaranteed return over a long term duration.

HOW DOES SOCIAL HOUSING INVESMTNET WORK?

Great – hopefully if you’re still reading, then social housing investment sounds like it could be a good idea for you! But how exactly does it work if you want to get your hands on one of these properties? This is a somewhat hard question to answer, because it really depends on how you go about it. You could approach the housing associations or local councils yourself, source the property, do the works and then find out whether it will meet the criteria to secure the lease, but this is an extremely long and expensive process.

Most investors will opt to use a company that supply these types of deals readymade, and again each of these companies may operate slightly differently. What we can do though, is explain how our process of how a social housing investment works:

We are part of a large property buying company, so we have the unique opportunity to access properties at scale. A small percentage of these properties are suitable for this type of investment.
We acquire those properties and determine with the lease company what we would need to do in order to get it up to the required standard.
We’ll then start the works and ensure the property is brought up to the requirements, ready for inspection.
Once the property is inspected, the lease will be issued. We can then package this opportunity and provide the opportunity to our investors.

Hopefully that gives you an insight into how it works, and that leads us quite nicely into some of the challenges.

WHAT ARE THE CHALLENGES AROUND SOCIAL HOUSING INVESTMENTS?

There are two significant challenges that make these deals hard to come by, which are the property restrictions and relationships with the housing associations or councils.

As we mentioned previously, finding properties that land within the criteria can be really tricky, as the contracts as often very specific in terms of exact area, house size, and the capability for it to have the required works to accommodate the tenants.

The second challenge is getting in front of the companies that are able to offer these leases. There is a lot of red tape, and they often only agree to offer these opportunities to companies that can provide numerous properties – it can take a while to find one that is willing to work with you, as well as provide favourable terms, and rates.

HOW DO I FIND SOCIAL HOUSING INVESTMENTS?

Now we’ve discussed some of the challenges, you may have realised the easiest way to do it is definitely to use a sourcing company. If you have researched this, you may well find there aren’t too many out there offering these opportunities at the moment, but there are a few options, but we feel it will definitely become more prominent in the future.

You should do your research and reach out to these companies as each one may have different terms agreed, in different areas, with different providers – so there not all equal, which includes ourselves!

WHY CHOOSE THE PROPERTY SOURCING COMPANY?

So why should you choose us for your social housing investments?

Well we’ve gone through just how complex these deals are, and how hard they can be to find, however they aren’t the only reasons to choose us!

We think one of the main reasons is that we are completely honest and transparent in our process, we will always place you with a deal that we are we feel will provide you with a positive investment experience, based on your circumstances. We don’t just want you to buy one property from us, whether it’s a standard buy to let, or a social housing property, we want to help you build your whole property portfolio.

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