Portland or Oakland?

Question

Hello Everyone,

Would you rather have a home in Oakland or TWO homes in Portland?

Please explain and feel free to ask clarifying questions.

Thank you!

Jay Hinrichs · Answer

@Rami Aweti @Michael Jones   I am like Michael  growing up in Cupertino we looked at Oakland as a war zone basically.

Even though we have a UGB we still build thousands of new doors a year both apartment doors and SFR's .. Oakland has no land left to accommodate this. or its infill tear down.

So as it equates to each other PDX has far more developable land.

In the present cycle I think PDX may have in certain areas a better chance of upward movement. however the bay area is the bay area.. and you can never discount. the overwhelming base of high tech and other industries that dwarfs PDX

Michael Delpier · Answer

@Rami Aweti

Assuming these are for rentals. So you might want to check the laws around what a landlord can do and how friendly they are are are not.

The other thing to look into is the tax burden over a long term hold if that is your plan.

Oakland has become a much better environment when to compared to the 80's. This is just a factor of the prices not allowing the same type of behavior that were the bad part of past environment.

Michael Jones · Answer

Portland has an urban growth boundary with scheduled expansions.  Doubt there will ever be a lifting of the UGB any time soon.

It is crazy how the value of houses in Portland has risen so sharply so quickly.  We just want to grow up llike the rest of the west coast cities...

I'd take two in Portland.  Grew up in San Jose and though Oak is a bit of a distance that was no place to go in the 80's.  Don't know how it is now there but the gang activity was too much. I'm sure nothing like midwest though

James Dishongh · Answer

OK, I'll bite. I'll take two in Portland. Portland is growing. Rents are high. Appreciation (although you're not supposed to count on it) is top 10 in the country and probably going to stay there awhile. But...

Too many other variables to truly consider such as location, size, your investment strategy, etc.

Jay Hinrichs · Answer

@Michael Delpier  I have not checked but I think measure 47 was a land use measure not a tax measure.

in the PDX metro area.. tax's will vary a lot... in Multnomah county you will pay the most.. if you get into unincorporated areas of Washington or Clackamas you will pay the least.  Millage rates vary by city and area.

Prop 13 for those that bought a few decades ago is amazing.

I was just snooping around my old neighborhood in Palo Alto.. and checked on my old house.

I paid 189k for it in 1983  big money then .. then I sold in 92 for  425k  big money for then.  those people are still in the home.. So Zillow had it as last transaction  June of 92  425k.. Zestimate 1,900,500.  now that's a way to bring tears to your eyes... so the family that bought my home has basically been paying 5k or less in tax's people buying in the last decade double to 4 X that amount.

it does add up over time.   I actually pay rite at 1% for my personal resi in Lake Oswego..  When I lived in unincorporated Washington county but the city of Beaverton area my tax's were actually less than 1%.

Its much like those buying in Memphis  you buy in the city of Memphis and you have double tax  city and county tax.. buy outside of the city limits in Memphis and your tax's are significantly lower.

Buy in Multnomah county which is Portland proper and your tax's will be higher many times significantly than just buying in the neighborhing county or city

Michael Delpier · Answer

@Rami Aweti

For California, I am sure you are aware of Prop 13. This very basically sets the value of your property at the price you paid. You roughly pay 1.1% tax on this. So for a very long term hold, this becomes gold.

For Portland, check out measures 5 and 47. This can dramatically effect your tax rate depending on the part of the city your in. Measure 47 limits the property valuation to 3% growth based on a 1995 value. So these properties pay significantly lower taxes. It could be the difference between the property cash flowing or being negative.

If your into the very long hold, CA may be better. But you pay the price up front.

In my mind, It's like a Roth vs. a traditional IRA.

Now, I am no tax expert, but because I own rentals in both Houston, TX and San Mateo, CA, I am watching the dramatic effect property taxes are having on the performance of my cash flow.

In Houston, I can buy a SFR with $100/mo flow, the next year be at $0, and then the year after that be -$100/mo.

Rami Aweti · Answer

Thanks guys! I'll do a tax comparison @Michael Delpier It looks like property taxes are equally terrible in both locations. Oakland actually has a fairly liberal tax valuation. It's the crazy fees they tack on to your property bill that gets out of control. Mosquito abatement, extra police force, library, etc, etc., its nuts! @Michael Jones I do appreciate your advice. I still have my eyes on Portland :)

Rami Aweti · Answer

Thanks @James Dishongh! I do appreciate you humoring me a bit. The upside for Oakland is population density/ongoing need for housing and access to a stronger economy. I imagine that Portland is limited in how much it can grow due to future development that can level home prices and the lack of a strong economy. Portland is surrounded by land. What is to say developers can't just build homes to accommodate future growth and tamper home prices. I see homes that are close in as retaining value, but I don't see a San Francisco type of situation where homes are landlocked, creating upward pressure in prices. How close am I on this one?

Portland or Oakland?

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