Exploring Housing Options
When searching for affordable living, you may have stumbled upon real estate terms such as “affordable housing” and “low-income housing.” Perhaps you are questioning the meaning behind these terms and whether or not you qualify for affordable housing. You may also be questioning where to find affordable housing in your area and where you stand in the housing market.
What is Affordable Housing?
If you are searching for affordable housing, you are most likely looking to find housing within your income price range, especially if you are looking for something to assist with low-income family living situations. You may also be wondering whether it is best for you to rent or buy in order to save the most income and which housing benefits you qualify for based on your income.
Qualifying for Affordable Housing
If you are looking into affordable housing, you may be wondering who affordable housing is for and how you qualify. You must first ensure you meet the main qualifications. There’s a “sweet spot” in the affordable housing industry. If your income is under 30% of the rent, this housing option may be perfect for you. However, if your income is at or slightly above 50 percent of the “Area Median Income” (AMI), you most likely won’t qualify for housing benefits. The AMI is determined by calculating the affordability to rent or purchase an apartment based on the average income in your area.
Personal Insights on Affordability
In my 20s, I was attempting to rent an apartment for me and my new wife. So, I began asking financial questions of the older people in my life. The major item on my mind was how much rent could I afford? I received several answers, but the one I landed on was to make sure your rent is no more than one week’s pay or 25% of monthly income. Looking back, this was a pretty conservative approach, but it seemed to work for me! Our current business model is that a prospective tenant/customer needs to have 33% of monthly income available for the qualifying rent payment. This has been a proven model now for more than 20 years. And this is how affordability is decided in our world.
Google says the median income in Greenville city is $48K, and in the county $47K a year. So affordable housing using just these numbers would be around $1335 in rent per month! But if you dig deeper into the data, you see that 43%+ of those counted have income under the median. So as you build your investment portfolio, keep this in mind. Those earning over the median income may soon become homeowners! Those renting still need “affordable” housing!
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