I'm currently gathering the financing to buy my first 4 unit rental property in the Portland, OR area, however I've heard some things that are giving me pause.. What I've heard is that there are good States to invest and become a Landlord and bad States - Grant Cardone for example speaks about this often.
Are there new laws in Oregon that favor tenants over Landlords and limit how much I can raise rents - 10% limit or something? If so, would it be more wise to invest in say another location?
Are there any 4 plex [or other multi unit] owners who are getting around these laws to their advantage and profit?
I plan on living in one unit for 12 months + 1 day, fixing up any units that are or become vacant, using an FHA loan (PP + rehab) and eventually raising the rents on all units.
Any sage advice and wisdom from 4 plex owners [and the like] would be extremely comforting & appreciated!
Depends on where you are buying in oregon.
In portlamd city limits, for example, rent control prevents from raising 10% or more in a calendar year.
Further, portland prevents no fault eviction. If you evict without cause you can be faced with relocation costs.
Hi @Peter Slivkoff , I invest in Portland and manage my own properties. Yes, Portland and Oregon is a tenant-friendly state but I haven't thought it was unfair. Yes, you can not increase their rent by more than 10% per year without paying a penalty but 10% is a lot in increased rent. You also need to be careful to not discriminate and keep records of violations. If you are not trying to take advantage of people, you should be fine.
@Peter Slivkoff I would say it just depends on your investment strategy and your appetite for risk. I invest out of state and locally and both strategies have their pros and cons. Using an FHA loan to purchase a multifamily property is a great way to jump in though.
@Mike Nuss is an expert on landlord/tenant laws in Oregon and the new statewide rent control bill SB 608 but I believe that rent increases were capped at 7% + CPI annually. A lot of people on BP see these new restrictions as opportunities though since it has scared away a lot of institutional foreign investment as well as triggered mom and pop owners to sell.
@Caleb Webster Outside of some limited institutional foreign investor activity with the purchase of places like the Yard, there really hasn't been much foreign institutional grade activity in Portland. If Portland has strong economic and population growth the institutional-grade investors will likely find the city more and more attractive. We'll get uglier buildings as a result since construction costs are high and bankers will make more aesthetic decisions.
Long term mom and pop owners are in a position where they are wanting to cash their chips in more than what we've seen in the past. I certainly can't blame them. Portland, and the rest of Oregon's landlord tenant laws certainly are changing. They may not be all that onerous yet, but they make up for it with complexity.
With the complexity comes opportunity.
Supply has increased so it's not as much of a sellers market, but there is also a burgeoning cottage industry of tenant lawyers out there. For the mom and pops they see things like changes in screening criteria, increased fees, complicated timelines to increase rent, etc and think twice about holding on long term.
@Peter Slivkoff I wouldn't look at it like getting around the laws, but knowing the laws backwards and forwards. They will impact your pro forma and will make or break your ROI.
Dear BP members who contributed to this post, thank you very much for the great answers - really helpful and I feel like I know a lot more about this 4 plex idea than before! I wanted to respond to each member who posted directly, but somehow the system won't let me do that so I'm responding to all of you at once... So, thanks again!