⚠️Central Oregon Coast Zoned STRs (AirBNB) to decline | Occupancies & Rates to Rise📈

[AJ Wong]

For all the talk about the STR apocalypse there are factors at play beyond headlines and travel trends that should keep Oregon Coast vacation rentals in demand and investable for the foreseeable future.

Unlike many areas (like Spain or Palm Springs ) the Oregon Coast has done a relatively reasonable and practical job of regulating STR/VRD (short term rental / vacation rental dwelling) properties in most cities and jurisdictions. Even with all the hype - many cities remain at relative low saturation/density rates in comparison to other popular tourist areas.

In cities where STR/VRD rentals saw explosive growth due to lack or non-existence of regulations - such as Rockaway Beach, Yachats and Lincoln City - the cities and counties implemented rules that both capped and in some areas restricts the transfer of a permit with a property.

For example one very popular vacation area Yachats has many successful oceanfront rentals that are currently licensed, but upon sale do not transfer and can NOT be qualify for STR usages for the new owner in an investable timeframe.

Many of these homes/properties are some of the top performing STR's in the area and provide a property profile (such as oceanfront) that is very difficult to reproduce as either an investor or guest looking to visit.

Another area where STR permits do not transfer and there are a dozen or so luxury or oceanfront homes that will no longer operate as vacation rentals upon sale is Lincoln City. When the property can no longer operate as it's previous and often 'highest and best use' typically the buyer pool is smaller but the rental pool is also shrinking - especially for 4-5-6 bedroom oceanfront or beach accessible homes on the central to Northern Oregon Coast. This will drive more usage back into designated STR areas such as Olivia Beach and over-time reinvigorate demand and rates for available accommodations. I suspect it will also drive guests seeking a particular experience or sufficiently sized accommodations to travel and consider more remote locations. Specialized luxury STR PM companies like Wander.com have several Oregon based properties that are booked solid and among the highest performing income generators regardless of the location.

In a sense - peak STR rentals on the Oregon Coast might already be behind us. It's helpful to remind ourselves that the STR investor profile and intention is not always the same - and not always to maximize ROI or return on investment. A solid portion of my previous clients are to utilize some tax breaks, put capital to work and try and offset or payoff a second or family vacation home. There are endless reasons why the Oregon Coast is an attractive investment destination and looking forward for AirBNB investors is a higher barrier to entry for competition.