Investor Market is Hot

[AJ Wong]

Quick end of season update for the Oregon Coast..

The challenge is not so much quality investors or even interest rates (as we've seen a considerable drop in lending rates since the peak in September) but a lack of quality investment grade inventory. 

On the Oregon Coast in particular there are VERY few multi unit properties on market and those that arrive are often under heavy consideration by multi potential investors/buyers. 

We have, somewhat paradoxically, also noticed that sellers are increasingly flexible with terms, notably on properties that do require additional investment. I have personally negotiated several recent sales at +25% less than initial asking price and several owners that would consider or even prefer owner financing to simplify the transactional process. 

Financing terms have been somewhat restrictive, it is increasingly difficult to find a net positive single family residence over $250k but there is considerable value for the second home owner, or investors looking to safe guard some assets with a lot of upside potential. There are several $500k homes that are impressive value for a coastal turn key home. 

We have seen a considerable drop off in bookings for short term rentals both in quantity and average nightly rates. My assumption is that the pandemic fueled vacation rental boom, both in terms of users and owners is going through a bit of a rebalancing. Too many new vacation rentals to the market, and too few people traveling. It could be a slowish winter but expect activity in all areas to accelerate in the spring. Although AirBnB'ers will need to get more practical and realistic with their nightly pricing, I mean cleaning fees right? 

Maybe there is a brightside.. as in part of the deflationary trend?  I highly suggest some coastal owners look into offering medium term tenancies such as 30-90-180 day rental periods. Lack of quality furnished rental options and lack of management fees can yield some quality and less energy intensive returns. 

If you're looking for an end of the year deduction or two, I have a few quality investments on the radar that can close quickly. 

I'll try to post a final year end summary for lazy holiday reading. 

Cheers!