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This story is brought to you by Bend’s only locally owned newspaper, and crafted by journalists who live in this community, right alongside you.In today's market, it's not uncommon for single-family homes to be tenant occupied, specifically in Central Oregon. As a real estate professional, I reconcile some of this as a result of the Great Recession. As we are all aware, in 2008, we experienced a massive change in the real estate markets across the U.S. While I understand that details and statistics are not exciting, some statistics are required for perspective.
In July 2008, according to the Mortgage Bankers Association, the average number of home loans held by at least one full-time employee were being defaulted on at an average rate of 261 loans a week. Anecdotally, what resulted was a massive amount of inventory that was either scooped up inexpensively for a long-term investment (rental) or single-family home owners who had no other choice but to try to rent it out, and at the very least, save their credit and work with the tax depreciation options.
It's now 2019 and we're beginning to see many of those rentals/investments hit the open market. The reason: many of those real estate holdings have now hit the 10-year mark where the earnings/losses can no longer be depreciated out per U.S. tax code, and as such are considered "non-performing assets" in an investment portfolio. Long story short, it doesn't make sense for the investment portfolio any longer. So, now we're seeing an influx of tenant-occupied properties for sale.
In the last two months, more than 50% of the transactions I've closed have involved tenant-occupied properties—hence, why I feel it's important to discuss landlord/tenant law with your real estate professional.
When purchasing or selling a tenant-occupied property, it's crucial to be aware of state landlord/tenant laws. There seem to be quite a lot of confusion on what property owners' rights are versus tenants' rights.
Stay tuned for my part 2 of this series the week after next that will continue to explore and explain tenant/landlord law.
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