Thanks for checking out the real estate today PodCast. Let’s continue the conversation about where we are currently in real estate investment.
Bob: I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments.
Marcia: I’m Marcia Edwards, residential broker with Windermere Real Estate. We’ve been talking about investment property and I want to stay in that vein. It’s really forward thinking, it’s a little bit of optimism with a good plan B if it doesn’t go well and it’s where people should have their heads right now. What are the opportunities in the marketplace and how can I have a long term benefit from those opportunities?
Bob: It’s interesting. The apartment market, as an example, that tends to be the standard from which everybody speaks. When you think in terms of investment real estate, you aren’t thinking of buying a monster office building, you’re not thinking of buying a monster shopping center. You can’t afford it, but you may be able to afford to buy a duplex, fourplex, twentyplex, etc. apartment complex.
Marcia: I love that conversation because I’ve always heard you stay close to food, shelter, clothing and you’re going to be in the basic core needs group at any time.
Bob: Exactly. It’s exactly like a certain gentleman who has the cockroach approach to the stock market. Absolutely. He buys Pepsi-Cola, Coca-Cola etc. Why, because it’s been around 150 years. It’s still around and will continue to be around as opposed to getting really fancy. Apartments, they’re going to continue to be around.
Marcia: It looks like rents are going up, so your investment’s probably feeding you pretty well.
Bob: Yup. Exactly. Rents are going up like crazy. The rent increase that’s occurred over the last 18 months is absolutely amazing. It was slower to hit the Eugene/Springfield market because we had an over building in the campus area. A huge over building compared to the supply that existed before Now there’s lots of opportunities for students. They don’t have to rent out in the community and so forth. In 2014 it was a real stagnant then in apartments. 2015 started to pick up a little bit. The first part of 2016 really took off.
Marcia: How did it get absorbed so quickly? I don’t understand how it could recover. Did we get a bunch more students, tenants in the market?
Bob: It was interesting because if you looked at the Portland market, the Seattle market, rents were just going berserk and justifying a whole bunch of new construction with apartment complexes with much more attractive amenity packages. All of the sudden if I owned an older one, it will suck right in behind the newer ones and it just kept going up.
Marcia: It filled nicely.
Bob: Perfect.
Marcia: I’m Marcia Edwards, Windermere Real Estate.
Bob: I’m Bob Nelson, real estate investment broker, Pacwest Real Estate Investments.
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