Finding rentals in expensive Eugene Oregon
I’m moving to Eugene Oregon next year around May for a job. I’m also interested in beginning my rental property journey there, but am afraid of high prices. Any advice for finding great deals or creative investment strategies to make investing in my new soon to be local area possible?
Howdy Troy, congrats on the move to Oregon and the plan to get started in investing. I work with investors throughout Oregon and specifically the coast and I-5 corridor. Without question most asset prices will adjust, but depending on what you're looking for, the market is still strong. As for overpayment, due diligence is certainly critical as the risk increases in the market.
My advice is determine your investment requirements and eligibility based on current or conventional financing options. Seller carry options are increasingly available and an experienced real estate professional should be able to provide INCREASED creative solutions as borrowing costs increase and market equilibrium shifts to buyers.
Happy to share some potentials for Eugene investment. Check out the Friendly Area :)
Contact me with any and all questions.
Safe travels.
-
Real Estate Agent California (#02071578) and Oregon (#201231202)
- 541-800-0455
- https://anthonywong.fathomrealty.com/Oregon-coast-vacation-rentals
Hi Troy, I lived in Eugene up until recently. I invested out of state for several reasons, one of them price. I got in for much less out of pocket, cash-on-cash was nearly double, appreciation was just as good if not better. I would suggest looking into out of state investing in the right state. It will cash flow far better than Eugene and the percentage of appreciation can be just as good as well depending on the area. On top of that, and usually very important for getting started, the cost to entry is usually much less. Next year we should get to a buyers market which should help in your situation as it's been a sellers market for a while now. Whatever you choose, all the best in your real estate journey! Enjoy Eugene, and Go Ducks!
I wouldn't recommend getting started with rentals in Eugene. It's an increasingly landlord hostile city. Find a red state where the numbers pencil.
Eugene is instituting a 3 phase regulatory framework. The first phase was announced this summer and limits application fees to $10/tenant, provides the framework to substantially increase the annual per door city tax, limits ability to search out of state criminal records, among other goodies. Below are the anticipated phase 2 and 3 regulations.
These regs are on top of the statewide 3% plus inflation annual rate increase cap and 90 day rent increase notice.
Phase Two Recommendations include
• Limiting deposits (including security deposit, last month’s rent deposit, or other designated deposits, but not pet
deposits) to a maximum of twice the monthly rent.
• Require that applications be processed in the order received(I believe the state already requires this)
• Landlord payment of relocation expenses for issuing no-cause or qualifying landlord reason termination notices.
Phase Three Recommendations include:• Prohibit screening out applicants for credit defaults related to medical or education debt, and limit screening for minimum credit score.
• Loosen minimum monthly gross income screening standards to no greater than twice the monthly rent.
• Enact moratorium on no-cause terminations of tenancy unless landlord pays relocation.
@Tom Fidrych totally agree. I not only sold all my property there, I moved to a red state myself. @Troy Walling beware if you do become a landlord in Eugene, Tom's points are some of the other reasons I wouldn't recommend it. Spot on Tom! Also, keep in mind what they did during covid allowing tenants to get away without paying rent, etc.
Quote from @Travis Rogers:
@Tom Fidrych totally agree. I not only sold all my property there, I moved to a red state myself. @Troy Walling beware if you do become a landlord in Eugene, Tom's points are some of the other reasons I wouldn't recommend it. Spot on Tom! Also, keep in mind what they did during covid allowing tenants to get away without paying rent, etc.
Good for you Troy. I've got 3 properties with 10 units there. They are paid off and updated so I'm just going to bend forward for now.
The progressive agenda is killing me though. Anything resembling a standard is now termed discrimination. "It's discriminatory to screen someone based upon credit score." "If someone molested a child out of state, it's discriminatory to use that crime to limits someone's eligibility." etc.
@Tom Fidrych and @Travis Rogers, thank you very much for the response. I will review those words of wisdom and consider your advice carefully. I currently live in Knoxville Tennessee which is a red state and is currently seeing large population growth. I might consider jumping in with long distance rental property investing since I know the Knoxville area already. I appreciate your -advice and thoughts!
Quote from @Troy Walling:
@Tom Fidrych and @Travis Rogers, thank you very much for the response. I will review those words of wisdom and consider your advice carefully. I currently live in Knoxville Tennessee which is a red state and is currently seeing large population growth. I might consider jumping in with long distance rental property investing since I know the Knoxville area already. I appreciate your -advice and thoughts!
Troy, Knoxville is a great place to be and invest! Go Vols, great win last weekend! For out of state investing I recommend a good property manager and network, if you're in Knoxville you may already have that. I believe you'll find properties that pencil out much better in Knoxville, and that Knoxville will appreciate more rapidly than Eugene. If I had the time I'd try to acquire self-storage facilities in that area. As you mention, you'll see a lot of growth there for sure.
If you ever have any questions feel free to reach out anytime. Long distance has it's challenges, but so does Eugene. Something to consider at least, maybe pick one up locally and get it rented before you leave town. Once it's rented it's just a matter of making phone calls to plumber, electrician, etc. most of the time. If you have a support system in Knoxville, that will be a huge help
Hi Troy,
I am an investor and a Realtor in the Eugene/Springfield area. It is definitely a tricky area to invest in if you are only doing long-term rentals and trying to be cash flow positive. It is almost impossible, to be frank. Not to mention the landlord-tenant laws that some of the other comments state make it a little bit less desirable. With all that said, my wife and I bought a BRRRR earlier this year and a Duplex and also completed an ADU in our backyard. The only way that we can make it work is by renting to traveling nurses/professionals. Renting out furnished rooms or a whole furnished home.
If I were you I would consider buying a home close to hospitals and renting a furnished room to a traveling nurse and see how you like that and go from there.
Good luck and don't hesitate to reach out if you have any questions or need any recommendations.
I am an investor and Realtor living here in Eugene, OR. There are definitely some investor cautions here as others have stated. One thing you might consider, if it fits your lifestyle is some form of house hacking as your first home and investment here combined. Either a single family home, where you rent out additional bedrooms, or a 2-4 unit multi, where you live in one unit, while renting out the others to cover some or all of your mortgage & other expenses.
Unfortunately the city council is perusing a series of extreme anti-landlord policies and ordinances that go even further than Portland and Multnomah County did a few years back. Eugene is about to become as much if not more blacklisted than Portland and Multnomah County have become. Developers will think twice about building more rental units and investors will think twice about buying rental properties. They have already got themselves sued for trying to cap screening fees at $10.00 even though actual screening costs are 5x to 7x times that cost.
The next phase that they are working to pass would limit how much of a deposit you could require as a landlord and would cap rent increases at 5% and if you exceed that amount you could end up paying the tenant $4500 to $8000 in relocation fees, whatever three months of market rate rent is equal to. Phase three would take away your right to have standards for applicants, they want to make it so that you as a landlord cannot require above a 500 credit score and are unable to require over a certain income threshold to qualify.
Unfortunately the city council doesn't realize that this is going to hurt renters in a market that already has a low rental vacancy rate of 1.5%. Landlords will sell and rental units will decrease in the city leading to higher rents and more competition for units.
Oregon as a state is a rough regulatory environment for landlords, you really have to know what you are doing or hire a property manager, if you want to invest in Oregon, I would look to areas that are not regulated in addition to what the state has already done. Springfield can be a great alternative and purchasing in Springfield is often much cheaper than Eugene.
It is also worth paying attention to Junction City, Creswell, Cottage Grove, Albany, Corvallis, and Salem. Depending on how far north you are willing to go, you could look to Washington and Clackamas Counties too. Good luck!
Quote from @Josiah Kellerman:This is a great recommendation, my mother has done phenomenally well renting rooms to traveling nurses in Eugene.
Hi Troy,
I am an investor and a Realtor in the Eugene/Springfield area. It is definitely a tricky area to invest in if you are only doing long-term rentals and trying to be cash flow positive. It is almost impossible, to be frank. Not to mention the landlord-tenant laws that some of the other comments state make it a little bit less desirable. With all that said, my wife and I bought a BRRRR earlier this year and a Duplex and also completed an ADU in our backyard. The only way that we can make it work is by renting to traveling nurses/professionals. Renting out furnished rooms or a whole furnished home.
If I were you I would consider buying a home close to hospitals and renting a furnished room to a traveling nurse and see how you like that and go from there.Good luck and don't hesitate to reach out if you have any questions or need any recommendations.
Quote from @Troy Walling:There are tertiary markets within our tertiary market of Eugene and the surrounding Willamette Valley that you can get into with lower prices and high demands for rentals. I guess it really depends on your strategy, risk tolerance, and goals. I highly recommend that you learn these markets or leverage someone that has a good understanding of these unique areas. I'm not anticipating any drops in prices in housing anytime soon, so if you have the means to make moves, waiting is not the best ROI or time. You could house hack if you are worried about capital expenditure for acquisition but that also comes with smaller inventory (multifamily or homes with ADU's) or sacrificing of current lifestyle (rent by the room).
I’m moving to Eugene Oregon next year around May for a job. I’m also interested in beginning my rental property journey there, but am afraid of high prices. Any advice for finding great deals or creative investment strategies to make investing in my new soon to be local area possible?
Quote from @Travis Rogers:Hi Travis,
Hi Troy, I lived in Eugene up until recently. I invested out of state for several reasons, one of them price. I got in for much less out of pocket, cash-on-cash was nearly double, appreciation was just as good if not better. I would suggest looking into out of state investing in the right state. It will cash flow far better than Eugene and the percentage of appreciation can be just as good as well depending on the area. On top of that, and usually very important for getting started, the cost to entry is usually much less. Next year we should get to a buyers market which should help in your situation as it's been a sellers market for a while now. Whatever you choose, all the best in your real estate journey! Enjoy Eugene, and Go Ducks!
What states do you recommend? I’m also in Oregon and eager to invest somewhere!
@Andrea Heffernan Over the past three years I personally invest in TX and FL. Red, safe, growing states. Both have done well. Wherever you invest, make sure the location is good. I wish you all the best!