Hey guys - I did a search for topics in Portland and Eugene and it was mostly introduction threads, so hopefully I am not repeating any old topics. I have developed some interest in that part of the country (outside of RE), and am curious about people's experiences with real estate there. I personally tend to lean toward buy and hold SFRs that cash flow at least a little while they build equity, with an eye toward eventual appreciation.
I did some research on Portland and found that there is lots of real estate on the cheaper side (especially compared to my miserable DC market) in the eastern more residential parts of the city, and also reasonable real estate in the suburbs.
I also have kept an eye on Eugene, which seems to be developing their "downtown" area into a very hip mini-portland.
I'm hoping somebody has some deeper insight than my website research can provide. Can decent rents be found there? Does their unique regional government structure (METRO) affect the real estate markets in any real way? Am I missing something? Numbers there don't look like anything terribly special, but they look good enough that I'm wondering if it's about to get an influx of investors.
Rents here in Portland are phenomenal. I generally have no vacancy with my 13 SFRs and raise my rents every year. It's a great rental market. We've also been doing construction for a few investors new to the market as well.
Thanks @Chris Shepard...
That genuinely makes me happy to hear. Any advice on neighborhoods to look at closely? I am not too familiar with the area, and I rarely hear anyone talk about the RE up there, so even some general guidance would be a big help.
Agreed with Chris. The rental market is great with very low vacancy rates. Eugene is a college town " Go Ducks" and it is becoming a really booming area. I just put a SFR rental up last month and had 5-8 interested parties a day in the PDX burbs. Screening was fun. Portland and Eugene are both great cities with much to offer.
under the radar market.. But for solid rents and ease of management it will perform in a manner that people think passive investing should be.
Plus you have a very good chance at some nice appreciation over time... and yes METRO totally dictates values here.. We cannot sprawl so there is a shortage of inventory and with as slow as metro works and the nonsensical properties they bring into the Urban growth boundry nothing is going to change supply and demand in many years.
I think you can charge extra if you "put a bird on it"!
Thanks all, this gives me faith that my plans for investing will fit nicely should my new job op in Portland pan out.
And quick thinking @Dawn Brenengen , I'll see if I can slap a bird on my new business card :D
I became an accidental landlord in Portland a few years ago when I decided to move out of my SFH and rent it out. It's been a good experience, so I decided to buy something else--a SFH in a hot neighborhood that I plan to convert to an owner-occupied duplex. Sale is now pending.
Being a newbie to real estate investing, I was trying to pay attention to what people on BP and elsewhere were saying about cash flow, the 1% and 2% rule, etc. It seems hard if not impossible to make these rules work in Portland unless you know how to buy houses for much less than retail, which I don't. And in any case, when I asked an experienced investor in Portland who rents out higher-end houses in the $2500/month range how he dealt with vacancies, he just gave me a blank look. He doesn't have vacancies. That's Portland for you. (Or, to be more accurate, that's Portland when you have a great house in a great location.)
I won't have much cash flow until the loans for the duplex conversion are paid off, but I think it's a great investment for the long term. I lack expertise in RE investing, but I do know my city quite well. That's worth something!
I have 2 friends in Portland, one a renter and one a realtor. The renter says rents go up every year and inventory is hard to find. The realtor says she doesn't have enough rentals for all the inquiries she gets. So there you go :)
Speaking of Birds.....
James, I highly recommend staying west of I-205. You'll find higher cap rates (6+) east of I-205, but management will be more difficult, vacancy rates will be higher and appreciation will be less. The prime areas of Portland have been going bonkers. I used to pencil our rentals at $1.25 per sq. ft. I'm now using $1.50 per sq. ft. for penciling and the market has been paying us much higher than that with two units in Hawthorne close to $2.00 (we buy older buildings). New construction varies depending on location, but new construction is $2.00++. Small micro units are even getting close to $4.00. Portland defines what you're looking for. A tiny bit of cash flow with solid appreciation. 1% rule is almost non existent here so cash flow is tough, but it is possible.
Great news. That didn't take long at all. Which neighborhood?
Thanks @Mike Nuss ! It's a small older bungalow in the Eliot neighborhood, just a block off N. Williams near the New Seasons market and all the new buildings that are going up. I looked at cheaper places in other neighborhoods, but in the end I decided to get a place that would be a good long-term buy and an ideal location for me personally (I'll be able to walk to work). Definitely not a cash-flow property, but I think a large unfinished basement in that area is a great find, especially since the city is waiving ADU fees for a while longer.
Awesome neighborhood. Good job!! ADU definitely help turn the #s back in the landlords favor for Portland.
Elliot is a great neighborhood I have also been working in King recently both up and comers flanking Irvington with strong markets.
love the "put a bird on it comment" Dawn. Perhaps you can add a bicycle and a beard to the mix. Portlandia is so amusing and quite fitting.
I agree very much with Mike don't go east of 205 unless going south to Happy Valley, well past Foster. And that's more of a buying to live area not so many rentals.
@Jonathan F. I am a fairly new investor as well, and I before long I pretty much threw the 2% rule out the window. It seems like the only people who are getting those rates are people on the outskirts of cities and suburbs in the Midwest. I recognize I'm jaded though; the Washington DC market is notoriously horrible for making any cashflow. Most local investors I talk to feel lucky to get their rents to .6% of the purchase price/month. I think it's all about the appreciation and equity in most cities. So for what it's worth, I don't think you're doing anything wrong by not finding those rates.
Thanks everyone for the specific information.
I'm live in the Tigard area and I've been thinking about getting started in real estate investing as well. For those that already invest around the Portland area, how much of a discount are you looking to buy at? I've been running some numbers and most of the properties around my area are $220k+. It seems like a tough market to buy and hold and not end up with a negative cash flow. Any tips for a newbie?
I lived in Eugene for 24 years and my Dad owns a lot of Real Estate there. He focused on the campus area and that's where my knowledge is. The campus market has been largely overbuild in the last 3 or 4 years. Thousands of units aimed at students have gone up recently creating a huge increase in supply without a big increase in demand. This has spilled out into the downtown market but Im not sure whats the overall effects are on other parts of the city.
My Father still had a good lease up for the fall students but he gets more and more nervous every year with how much new construction keeps coming onto the market.
To find out about an area go to IREM.org search for ARM certified property managers. Call 5 ask them what parts of the city they like/dislike and why. Ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
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