Duplex as a primary residence

[Candice Cervantes]

Hello! I’m looking into buying a duplex as a primary residence. One of the units is currently rented under market value. The other unit is vacant. Since Portland is such a tenant friendly city, I’m wondering if there is a loop hole or if I can choose the occupied unit to move into in an effort to rent the other at market value? Or would I be required to take the vacant unit? Thank you!

[William Sing]

Hi @Candice,

Great question! Navigating Portland's tenant-friendly landscape can definitely be a bit tricky. Here’s how I would approach your situation:

If you’re in the early stages of buying, you'll likely need to take the vacant unit due to existing lease agreements and oregon laws. In Portland, once you inherit a tenant, you’re bound by the lease terms in place, so unless the lease is close to expiring, asking the current tenant to move out would typically involve negotiating a “cash for keys” deal. This can be a bit of a pickle, especially if you’re tight on cash reserves and both units aren't rented for a period.

If you’re considering cash for keys, there are various ways to approach it, depending on how open the tenants are to the idea. Additionally, I’d strongly recommend offering the tenants an estoppel to confirm the terms of their lease and any verbal agreements they've made with the previous landlord. While you can't force them to complete it, it’s a helpful document to have.

If you’re looking for more landlord-friendly areas, you might want to explore options in Clackamas and Washington County, outside of Portland proper. These areas tend to offer slightly more flexibility, and depending on the size of the property you’re looking for, you might find larger units than in Portland.

Also, as Scott mentioned, increasing rents in Portland can be a slow process, especially with the 10% cap or 7% + CPI limits, whichever is lower. It's always a good idea to have a clear strategy for lease renewals—I usually recommend a 90-day notice to stay on the safe side, though you have a bit more leeway outside of Portland.

Feel free to reach out if you want to chat about more options or if you have any other questions!

Cheers,
Will