Portland, OR investors - What are the pros and cons of being a Landlord?

[Tony W.]

Trying to understand if buying my first BRRR / LTR would be worth while in the Portland, OR / Multnomah county area.

What are some of the pain points of being a Landlord in Portland as of today, and if you have decided to opt out of the Multnomah area what were your reasons?

For the folks who are currently invested in Rentals in the Portland area how has it been being a landlord here, and would you recommend it?

Currently deciding on areas a bit further away from DT, or the hotter areas like the Hawthorne neighborhood. Have been looking more towards Lents and its surrounding neighborhoods.

Would appreciate any insight!

[Cathy B.]

Quote from @Tony W.:

Quote from @Jeff S.:

Attorneys suggest and most property managers use what they call low barrier screening which allows people in who can barely afford  your place and they want to house people with criminal backgrounds suggesting you are discriminating if you don't give offenders a chance. There is a movement within business that is giving offenders second chances. Much of this is adopted statewide so there is that. I have turned 2 properties over to management one with good luck and one a little less so.

 Would you say there are no ways around resolving the issues you had with the low barrier screening with rentals in Portland in general

 @Jeff S., I'm curious why your attorney recommends the low barrier screening? 

The landlord choice option seems like the obvious one.  The main drawback being that you have to document, pretty extensively, why you have denied a tenant in writing, if they do not meet your criteria.  Multifamily NW has a good form for this:  https://www.rentalformscenter.com/preview?form=8358

Tony, Definitely look into the screening process for the City of Portland as it is very specific how you address it even down to how you advertise your property.

The State of Oregon has limitations on how much you can raise rent on existing tenants each year.  The City of Portland has provisions where the tenant can request relocation assistance if your rent increase is 10% or more.  I have never felt like I needed to come close to either of those maximums and just raise it to market rate between tenants.  Of course, I only have 1 rental property and don't operate it like some landlords would.

I rented my former house out when landlords were selling in the City due to the new laws that came about.  Most small landlords did not like the new requirements, so there are fewer of them operating here.  I think due to that, rents went up and kind of worked against what the City was trying to do.

Currently it seems like the market here is softening a bit.  I'm not saying rents are going down, but rather, they seem to be leveling off.  Also the pool of quality tenants appears to be smaller.  I think the ones that could afford to buy a couple of years ago, did so, leaving fewer potential tenants with good credit and income.  There are still good ones out there, but its not like it was.

In terms of what neighborhoods to invest in . . . take a look at the property taxes and keep in mind that the valuation will go up by 3% every year.    There are some neighborhoods that were valued really low when the measure to lock in the 3% increase was put in place, they were bad neighborhoods then (1997-ish), but now doing a lot better as they've attracted young, hip home buyers due to their affordability and the taxes are locked in at a lower rate for the 3% increase in valuation.  Some neighborhoods in North and Northeast Portland fall into this category, maybe somewhere like Brentwood-Darlington too.