5 Reasons a Halfway House as an Income Property is a Great Investment

A halfway house isn’t just a great way to give back. It’s a good investment. There are many people who make their money solely through halfway houses, whether they’re running and maintaining multiple houses or they’re building them to sell. Here are a few important reasons why a halfway house can be a good investment.Halfway house investment

  1. You can make money while improving your community.

A lot of people want a meaningful way to invest their money. You need to make money — you aren’t just a charity — but you also want to give back, too.

Halfway houses are extremely valuable. They help people transition back into the “real world.” They give them the support that they need. And those people go on to contribute to the community as well, making the local area better for everyone.

If you want an investment that’s meaningful, you can create a halfway house that supports the changes that you want to see.

  1. You gain money on the real estate as well as the facility.

In addition to the money the halfway house makes, you also need to consider the fact that you own the house. Real estate is appreciating very quickly in a lot of areas. If you want to sell, you can sell both the business and the house easily.

You also own equity; you have an asset. Your real estate means that you can leverage that real estate in the future if you need to take out loans, have other business expenses, or are interested in expansion. This gives you a lot of flexibility.

The area matters a lot when creating a halfway house for this reason. By creating one in a hotter market, you can benefit more from real estate appreciation. By creating one in a slower (and cheaper) market, you can capture more income right away.

  1. You can apply for grants and other funding.

Many halfway houses have grants, donations, and other funding, which means that you don’t necessarily need to worry about the profit very much. You can concentrate on making a difference and have someone look into grants and funding initiatives on your behalf.

Halfway houses are critical additions to every community. Because of that, there are often funds earmarked for them. And that means that you don’t have to worry so much about things like marketing or trying to get customers. Instead, you can work directly with your community.

  1. You can operate as a non-profit organization.

A non-profit doesn’t mean that you don’t personally profit. First, you have an investment in the property. Second, the person who manages the halfway house still makes money; there’s a paycheck associated with managing and maintaining everything. And that’s good news.

Non-profit organizations usually don’t need to pay taxes, can get more grants and donations, and can function well without having to worry as much about income and expenses. At the same time, it’s still a great investment, because you can get paid for running and managing it. This can give you the best of both worlds while, again, doing something that really means something for the community.

  1. You can sell the property and the investment.

Eventually, you can cash out. Some people invest by building halfway houses as businesses and selling them once they become profitable. You can sell the property and the business itself if you ever want to cash out. And then you can spend the money on anything else, such as building another halfway house or just retiring. Being able to sell the property and the business at any time (often for more than you put into it) also gives you flexibility and makes it easier for you to plan for the future.

Because a halfway house is a business, it can be “flipped”; you can make a profit by fixing up houses, finding guests, and then selling the business. The better your processes, the more money you stand to make. And of course, you have the option of keeping your halfway houses and continuing to build more of them, profiting as you go.

Are you interested in investing in a halfway house? A halfway house is a real estate investment, a business, and a charitable mission all in one. For more information, or to download our guidebook for starting a halfway house, contact us — we can help you get started.