Today we’re going to discuss investing in real estate during a recession.
Bob Nelson, Eugene real estate investment broker
Bob Nelson: Let’s deal with the concept of a landlord owning a, an apartment complex. What are we facing at this particular point? For those of you that are tenants, you might say, well, that’s somebody else’s problem. Not exactly because if the landlord runs into a financial problem, the tenant is going to be impacted fairly severely.
So let’s deal with that situation. Let’s assume just briefly that not all tenants are going to find this recessionary period as being comfortable. You may have lost your job. If there’s a two of you, family, mate, husband, wife, whatever it would be. If there are two of you that are contributing to the rent, and one of you gets laid off completely or hours are cut back. All of a sudden, you don’t have the income needed to pay the rent.
Bob Nelson: If you can’t pay the rent and you’ve been impacted by the China virus, you can enter into an agreement with the landlord to abate a portion of the rent. Now there’s an obligation to pay it back, but you can enter into an agreement where landlord agrees to accept a lesser amount of rent. Again, you need to demonstrate that this isn’t just your desire to pay less rent. Nope, you’ve been impacted by the China virus.
If that’s the case that deferred rent will be paid back and will be paid back and now within a period of six months, that’s subject to change because if the state decides to do something to extend this or push that around and so forth, it is a social agenda. And as a landlord of an apartment complex, you are absolutely exposed to that social agenda.
Bob Nelson: And if the governor says that we’re going to push this back there and so forth, unfortunately that’s not the lender saying by the way, you don’t have to make your mortgage payment during that time period. Oh, Nay nay nay. So you’ve got a situation that you’ve got to budget your money act proper and so forth.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.