Last year Oregon became “the rent control state,” an ignominious distinction at best, when Governor Kate Brown signed into law a bill enacting statewide rent control. As the WSJ so eloquently put it at the time, “One would be hard put to identify an economic policy with a more proven track record of destruction.”
Believe it or not, lawmakers in Salem just managed to trump themselves. With the passage of HB 4213, the legislature voted to extend the Oregon eviction moratorium for both residential and commercial properties through the end of September and give renters until March 31, 2021 to pay back rent. In so doing, they effectively provide all tenants with a year’s hiatus from rent payment. No wonder multifamily properties in Portland returned a paltry 4.5% last year.
This is a serious downward spiral that effects all income property owners; first rent control then no rent. What’s a landlord to do? In a word; move. Move before you are burdened with so much debt that it becomes unserviceable and you lose your properties to foreclosure. I doubt banks and other lenders will be quite so forgiving of missed monthly payments as our governor and legislature.
Their concern for renters across the state is laudable, but not when it comes at the expense of landlords who provide their housing. Our government seems to think it just springs from the ground fully formed; no mortgage, no maintenance, no carrying costs whatsoever, just free housing. This sort of progressive, reflexive, hive mentality will ultimately force landlords and property owners to shoulder more debt than anyone can or should bear.
Because you cannot stop this, as an income property owner, your best choice may be to leave. Fortunately, with interest rates at historically low levels and a paucity of single family, starter homes on market, now is a potentially great time to sell.
Income property owners now find themselves in a position which is almost the exact opposite of the post Great Recession recovery. As states slowly claw their way out of the pandemic abyss, single family home inventories are at historic lows.
They were already low pre Covid-19, the attendant panic simply exacerbated this. Sellers pulled their houses off market to avoid exposure from potential buyers. As things begin opening back up, pent up demand is expressing itself in bidding wars for available properties in desirable areas.
As an income property owner, why not attempt to take advantage of this sellers’ market to cut your ties to a region that makes owning anything other than a primary residence an increasing liability?
This can be easily done with DST property programs. Whatever your preference in terms of property type; apartments, retail, industrial, medical, self-storage, office, as an accredited investor they are available to you. They are quite literally a phone call or email away.
Each DST property program comes with a Private Placement Memorandum or PPM. This document discloses everything that is known about the property; good, bad or indifferent. All the painstaking and expensive due diligence you would normally do yourself before investing in a property is done here for you.
These documents allow you to shop for properties at points distant, a process that would normally be difficult to undertake. Most importantly, DSTs can provide you with an escape hatch from the war zone that rental property ownership has become up and down the West Coast.
What are you waiting for? There are myriad income producing properties scattered throughout the Sunbelt awaiting your attention. It is time much better spent than waiting for local governments and their anarchist friends to take more from you.