I am interesting in how investors in Portland Oregon respond to Tina Kotek and Ted Wheeler proposal. Will you be selling and moving the investment outside of tri-county or even out of Oregon if these legislation got passed State wise? What would be the worst impact to the current investors and property value in Portland OR and how are we going to cope with it as an investor?
A short note of my background: I started a single family rental business in Portland OR in 2009, have done 2-times of 1031 exchange, and currently owning a property in Washington county.
Really? One of the most overpriced apartment markets in the country is considering rent control, too? Ah, the Oregon initiative process...enemy of investors everywhere (along with the state's 10% capital gains rate). If I was still an apt. broker there, I'd be looking to move (or retire on all the commissions I made from naive Californians these past 10 years)! If I was a building owner, I would have sold 6 mos. ago. at the peak.
What does Mark Barry, the best apartment appraiser in the state, say about it? That would be my first call. Fortunately, I sold everything I owned in 2004 and moved away for good. No 5% cap rates for THIS investor, thank you!
@Kelvin Lee I think they are going to have an uphill battle simply due to the fact that this has to go through Salem and not just Portland. Because of that it would cause sweeping changes across the state in places that have fundamentally different markets than Portland. The true month-to-month rental has already been modified and curtailed, but I just can't see how legally the no cause could ever pass.
It's commonplace in Oregon for year long leases to convert to m2m after the first year. If no cause evictions go away then you would effectively never be able to get your tenant out by means of nonrenewal. The only way you could get them out would be through a rental increase disincentive. Because we are already faced with caps on the amount of times you can increase rent on a yearly basis for m2m leases, I think landlords will start putting more tenants on year long leases and the rental increases will continue to increase in leaps and bounds.
Even if no cause evictions are here to stay, they are still looking for landlords to pay moving costs. We'll see if that goes through.
I attended the NE Multi-Family breakfast weeks ago and there were 5 speakers gave speeches on the coming years in Portland market. Overall, investors either sellers or buyers are on the fence until the smoke is cleared on both rent control and no cause eviction subjects. One of the speakers mentioned Portland market is heading towards to the end of the 10 years cycle. That being said the property price will be going soft after 2017 when the market saturated with the new luxury units while these properties are still in development as I speak.
My take is the City of Portland, the biggest landlord in Multnomah County, is the root cause of rent spiking drama. First, they refused to expand the urban boundary. Second, they raise property tax on everyone at a rate of over 10% plus. Third, the permits cost developer a fortune on new development. Now tell me who caused the Homeless crisis in Portland Oregon?
I am for sure trying to avoid Multnomah county or tri- county at the moment and possibly consider moving my target to the upcoming area in Washington state.
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