Many people are unaware of the huge opportunity to make money and do good in property by renting to housing associations and supported living providers. I am now renting a lot of my properties to these providers and they are excellent tenants. They pay a fair rent, they manage the property and they do it all on a long term contract. But not only are they great tenants, they are also providing an important service to the community and you get to be a part of that.
There are a number of opportunities that have arisen from the social housing space and it is important for all property investors to understand them. If you apply them correctly, they could change your business and investing strategy forever. In this article, I will give you 3 ways to make money and do good in the social housing space.
1. Become a social housing provider
Local councils have to provide assisted and supported living to various groups of people this can include: children exiting the care system; older people; people with mental health issues; people coming out of prison, and more. These people need to live in accommodation which allows them a level of independence while also receiving the correct level of support.
Councils pay social housing providers to offer this service. Some of these providers are private companies. One way to make money in this space is to set up as a provider and get contracts from the council. To care for some ex-prisoners councils will pay up to £11,000 per week to these providers! My parents have actually got into the social housing provider business, and it is ,certainly a great business for the right people.
2. Rent to a social housing provider
In my case, I am a property investor. I haven’t got the time or the inclination to start a social housing provider business. What I do have is houses. These providers, whether they are housing associations or private businesses, need properties to use. All the HMOs (houses in multiple occupation) I have, I now hand over to social housing providers.
If I was to rent these properties out as an HMO, I would end up with less money after all expenses. With a social housing provider I will end up with more money and, on top of that, don’t have the hassle of managing the property. These providers will also agree to rent the property for 5 years, so no void periods! It is a great deal for landlords and it is providing a community service that is very much needed.
3. Start a rent-to-rent business renting to social housing providers
If you don’t own any houses and you don’t want to go into becoming a provider of social housing yourself, you can still make money in this space. There are people running rent-to-rent businesses connecting landlords with social housing providers. I have a property signed up via just such a scheme. Someone rents a property from me at £1100 a month and then rents it to a social housing provider for £1500. They just keep the difference as a fee for making the introduction. This is a very smart way to make money.