Wants to buy first piece of property to hold for 3-5 years
Looking to buy first piece of property in the Portland Area to hold for at least 3 - 5 years. What are the best approaches?
#2 General Landlording & Rental Properties Contributor
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#2 General Landlording & Rental Properties Contributor
In most places if you buy and hold for 3-5 years for a regular house (ie one that doesn't need renos), you are unlikely to come out that far ahead. The appreciation (which is not guaranteed) is likely to be less than your costs of buying and selling a property.
Quote from @Thomas Wilson:
Looking to buy first piece of property in the Portland Area to hold for at least 3 - 5 years. What are the best approaches?
Hey Thomas,
I'm a realtor in Portland and also purchased my first investment here back in 2018 using the fha/house hack method! If possible, this is the best strategy in this market for the following reasons:
1. Low down-payment.
2. More lenient landlord laws because you are also living in the property.
3. Potential cashflow/break even on expenses.
4. Your goal of attaining appreciation as long as you buy in the right area.
If you'd like to talk more about this or just have general questions send me a message!
Thomas,
Like Zac said, there are many reasons why it is good to invest in the Portland market. Contrary to what Theresa said, appreciation is great in the Portland market.
You can expect to see around 5% growth per year in your property but use 3% in our analysis. Apart from appreciation, you have your cash flow after all expenses are paid. I would owner occupy like Zac suggested and try to make it so you break even or pay little per month. Yes this takes away some of your cashflow, but it is worth it if you don't have to pay rent (house hacking). After appreciation and cash flow, you have your equity growth. Your renters pay your mortgage and you can expect to see most of your growth here. It depends on the property but with the right excel sheet, this can be quantified quickly. Last but not least, you make money on your tax deductions.
Add all this together and you can expect to see much higher returns than in the stock market. After 5-7 years I would recommend looking into what a refinance would do for you and then what you could do if you sold it. Once you figure that out it is time to scale.
The usual answer is to buy a house hack with a low down payment loan and live as close as you can to free. This is the most accessible way for most people.
@Thomas Wilson- will property be a lot ? a primary home ? a rental property ? a commercial proerty ?