Housing association deals are becoming more popular. This blog will help you understand what a housing association deal is, what the advantages are and what the disadvantages are.
What is a housing association deal?
You find a suitable property and refurbish it to fit the local housing association's requirements. This property could range from a single let to a huge block of 50 studio apartments. You then lease the property to a housing association, this is normally done on a tenancy agreement or a lease. Typically this is done on a long-term contract, sometimes as long as 7 years!
What are the Advantages?
1) Guaranteed rent- It's great if you're looking to achieve a high yield with no voids.
2) Long term- The agreement can last as long as 7 years.
3) No management involved- The housing association company puts their own tenants in place and manages them.
These 3 advantages make the deals more passive and hands off than your standard property investment.
What are the Disadvantages
1) Set up costs- Housing associations have set property requirements that the property will have to meet.
2) Dealing with the housing association- You have to do your research and find a good association that you trust.
3) Lending- It's harder to evict vulnerable tenants which will reduce the number of lenders available.
To conclude, we have done a good number of housing association deals in Greater Manchester, Liverpool, Swindon, Gloucester, Luton, and Bedford. These deals do take more time and effort to arrange but often achieve a higher rent and give investors a "hands-off" asset. If you have any questions please do get in touch.