Engineered for the Rental Economy

October 24, 2022

By Carson Halley

Portland, Oregon

The Fed’s financial engineering moves these days are all geared toward trying to “crack the economy.” The goal is to push rates up such that spending (on everything from homes to commodities) slows down enough to reduce inflation and stabilize prices, but not so much that we are driven into a recession.  We could argue whether this is an effective policy considering that a significant portion of inflation is propelled by high energy costs, but we will leave that for another article. The impact of this financial engineering on the housing market is tremendous – especially for potential first time homebuyers who are no longer in a position to own a home. To put this in terms of monthly mortgage payments, the real cost on a $350,000 mortgage has risen over $900 per month, from $1,475 per month in October 2021 to $2,388 in October of 2022. With more renters entering the rental housing market each year, and fewer able or willing to buy homes at these rates, we are entering into a booming rental economy.  

In many ways, Westland Investors is engineered to deliver exactly what’s needed in this rental economy. Our portfolio of multi-family rental properties are upgraded but still affordable for many during these uncertain economic times. We buy quality assets that have upside to various degrees. With locations in suburban Pacific Northwest communities, Westland’s apartments offer residents a quality experience, thoughtfully managed by our own in-house Centro property management teams. Whether residents live at a Westland property for a year or for a decade, we want it to feel like home, and we have more control over the experience by managing our own properties. 

Another challenge in today’s economy is the constrained supply of both labor and materials. There are many reasons for these constraints which I’ve written about before, but the consequence is that it’s very difficult to find skilled labor and materials for property upgrades when you need them. Our strategy to combat this has been to plan for it. In terms of materials, we began building a small inventory of appliances, lighting, fixtures, and paint for each property, so that we are ready when apartments turn over and need an upgrade. And in terms of labor, we’ve created a preferred relationship with a construction team called Upgrade Construction & Services. Having a preferred relationship with a vendor ensures we receive priority allocation of labor and preferred pricing. This translates to faster turnaround times on repairs and upgrades and a better overall experience for our residents. It also translates to value for our investors – being able to turn around units quickly to get them back on the market allows us to take advantage of the booming rental economy and maintain high occupancies.

At this part in the economic cycle, execution is more important than ever before.  While the Fed is busy engineering the economy, we are busy engineering Westland to excel in the rental economy, delivering benefits and positive experiences to our employees, our residents and our investors alike. 


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