Oregon Oceanfront, Oceanview, River & Lakefront homes: Affordable luxury investments

[AJ Wong]

For at least half of nearly forty years life I've lived and invested in property within a block or short walk to the beach in South Florida, Southern California, Southern Oregon and Northern Baja Mexico. For the bulk of my real estate service career I've sold Oregon Coast property and STR vacation rentals with ocean views and occasionally oceanfront locations.

As an investor myself, I'm constantly on the hunt for coastal value (hence our most recent Mexico STR and coastal Oregon since 2018) and having lived in many of the most desire-able coastal cities like Ft Lauderdale FL and Venice Beach CA, I'm convinced the Oregon Coast provides some of the strongest relative coastal value and particularly oceanfront property in the continental US.

For example, there are quality oceanfront homes for sale (as of this post) starting in the $650k price range. 3/2 slightly dated, but walk down your private stairs to the sand. Where else is that even possible? Not in Florida, California, the Northeast or East coast in general, possibly small pockets of the south but not for long..For under $700k investors won't quite find an oceanfront property for sale in Oregon that is eligible for an STR permit, but those are available in the $950k-$1M range. As importantly for investors is that operating costs for oceanfront or ocean view properties in Oregon are generally considerably lower than in comparative states.

Homeowner's and flood insurance can be considerably lower than in other coastal areas, especially in comparison to States with prohibitive property insurance markets such as Florida. A direct oceanfront 3/2 home of +1500SF in Rockaway Beach Oregon with a target sales price of $1.15M received a full property and flood insurance quotes totaling around $5k in premiums. $400/month. That's less that what my father is paying on policies in Florida for a $400k home not anywhere near the ocean. Utility bills can also be surprisingly below expectations. 

The physical environment isn't for everyone, it certainly is not Miami Beach, but it is very Big Sur-esque without the price premium. The 'what you get' for the money factor is highly applicable from Brookings to Astoria and licensable STR coastal vacation rentals are still regularly attainable at workable terms, Luxury and oceanfront and lakefront properties tend to perform above the 10% of valuation in gross annual income for prime coastal STR's and as an example I've seen a $2.1 Million Oceanfront home produce $300k in gross annual income. A client last year acquired a $1.5M oceanfront home on pace for $150k+ in gross rental production.

Oregon is also an increasingly popular retirement destination, for primary and second home buyers that don't need to have STR permissions, the options and areas to invest are robust, and there is even high demand for upgraded and updated furnished mid term rentals to help off set operating costs. One luxury HOA community offering healthy oceanfront listings for sale and exceptional amenities while allowing 30+ day rentals is Salishan Coastal Lodge Resort in Lincoln City. For those looking for quick access from Portland and also not requiring full short term rental-ability the areas of Cannon Beach, Arch Cape and Manzanita are majestic and luxury real estate areas. Cannon Beach generally permits STR but one one occupancy per 14 days, Arch Cape has a similar limitation with one occupancy per 7 days and Manzanita currently has a fairly long waitlist. There are exceptions to these areas with occasional transferrable permits or commercially zoned properties.

Pacific City is also a very accessible and popular destination with some spectacular properties, scenery and activities. Great surfing, fishing and the occasional transferrable oceanfront STR permit (without limitations) property for sale.

For investors looking for quick access via a day trip from California's Bay Area or Sacramento, check out Brookings or Gold Beach at the southern end of the State. Brookings oceanfront homes are few and far between (but out there!), ocean views are more readily available but there are also a variety of riverfront homes that can also dually qualify for STR usages. Gold Beach has strict STR rules but outside city limits in the county there is very strong oceanfront value that can get also obtain a vacation rental permit, listings there do typically go pending quite quickly.

Bandon, home of one of the most highly rated public golf courses on Earth (Bandon Dunes) is also a luxury oceanfront investment location. Oceanfront homes are extremely limited and commonly ask $1.6M+-$2M++ in the center of town it can be very difficult to secure an STR permit due to saturation (active neighboring vacation rentals) requirements.

Lincoln City offers a variety of oceanfront home options, the challenge with oceanfront STR's in Lincoln County is that actively licensed STR's do not transfer and would generally be subject to a lengthy waitlist. Still excellent value in terms of price per square foot and amenities but could be sometime before a full license is issued. The same goes for Yachats, decent amount of oceanfront options (limited with actual beach front) but generally subject to a waitlist. Rockaway Beach is a prime location for Oceanfront luxury property particularly STR's as actively licensed properties can obtain a new STR permit.

In between in pocket of Florence, Port Orford, Waldport, Newport, Oceanside, Cloverdale, Gearhart, Netarts and Nehalem offers oceanfront, view or Bayfront listings for sale that are both relatively affordable and STR options.

For Riverfront homes I would look into Brookings, Gold Beach, Port Orford, Waldport, Florence, Mapleton (outside of Eugene), Tidewater, Lincoln City and Nehalem. For lakefront I'd consider Port Orford, Lakeside, Florence and Devil's Lake in Lincoln City. 

Overall the coastal growth trend along with demand for oceanfront luxury homes and STR's on the Oregon Coast has steadily increased. If theoretically transported across the Northern or Southern Oregon borders, the same property would likely be many multiples of current Oregon asking prices.

Would you invest in Oregon oceanfront, oceanview, lakefront or riverview property?