The future investment potential and risks in Portland, OR

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The future investment potential and risks in Portland, OR

Lara Nicole
Member since 2021 · 23 posts · 20 votes

I moved to Portland, OR with the intent to buy a SFH & house hack or purchase a multi-family. However, Portland has declined substantially in terms of homelessness taking over every neighborhood, trash piles everywhere, increased crime, looting & drug use, graffiti everywhere you look & the tenant laws are very anti-landlord. I just saw a new city proposal of making camping in parks legal. This is already happening esp in Laurelhurst Park but if it passes then we will see all our lovely parks overtaken with tents, trash & more crime. Plus decriminalizing hard core drug possession is only going to increase crime & chaos.

All of these issues are increasing, not declining & I don't see the light at the end of the Portland tunnel anymore. The current & proposed laws are all in the direction of increased homelessness & liberal drug use. I do love certain aspects of the city but have serious doubts about the long-term viability of Portland.

As we stand now, the demand for housing is off the charts with buyers overpaying due to low interest rates, but what are your thoughts on the housing market & Portland's health as a whole 5+ years from now?

Do you see the demand & appreciation for single family homes declining in the near future? I think as the homelessness increases as with the wacky laws & the lack of police officers we will see a major decline in 5+ years. Thoughts?

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Benjamin Kirkpatrick
New to Real Estate · Portland, OR · Member since 2018 · 11 posts · 6 votes
5y

@Lara Nicole Since I am not currently investing in the area, I cannot offer any real data to back up my opinion. Still, just my two cents: I see the demand and appreciation for SFH steadily increasing in the future. Like others have mentioned, Portland is located in an interesting region geographically, between several major west coast cities: Seattle, San Francisco, and LA.

Regardless of the wacky laws and lack of law enforcement, people will still want to move here. The kind of people attracted by those stipulations is a whole other conversation. Not to get political, but many of the things you mentioned (homelessness, increase in crime, and the overall lawlessness) can be traced back to the people running the show here in Portland, who are voted in by people who live here. So, in my opinion, these things kind of feed off each other.

I personally moved to Portland because I, like many others, appreciate the natural beauty and landscape of the PNW. I want to be within arms reach of the beach, mountains, and forest. However, I came to learn very quickly that there is a lot of pros and cons to living and/or investing here.

With that being said, I cannot see myself staying here long-term; however, I do see Portland increasing in value and appreciation over the next several years. As others have mentioned, Portland is surrounded by protected land, so we really do not have an opportunity to continue sprawling outward like LA. Portland is also a unique location that tons of people will continue to visit (at least I hope so).

Investing in the suburbs surrounding Portland may be your best bet (Gresham, Tigard, Beaverton, etc.) since these locations tend to attract a different crowd than the downtown crowd if you know what I’m saying. Brandon Turner said on one of his webinars that he always asks himself before investing in a specific location if he feels comfortable with his wife running alone outside at night. The point being, would you feel safe walking around the neighborhood you’re about to invest in at night by yourself?

I hope this can provide you with another perspective. Again, just my two cents!

-Ben

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  • Kurt Lane
    Property Manager · Portland, OR · Member since 2020 · 50 posts · 39 votes
    5y

    I agree with @Steven Tran . I've been a rental property owner in Portland for close to a decade and have owned a property management company focusing on single-family and smaller plexes (20 unit or less) for the last few years. The issues that you mentioned - homelessness, decriminalization of drug use, etc - don't have a lot to do with larger trends in the rental and ownership markets and if anything city and state officials see rising homelessness as a direct result of the incredible strong rental market over the past decade. When the initial regulation was passed (Portland's Rental Relocation Assistance) it was a result of Portland's rents going up 11% during 2015-16 when income grew on 4%. All of the regulation in place is an attempt to check rising rents, which should tell you how the market has been faring. Anecdotally, my property management company has 97% on-time rent payments across all of our properties, has leased 100% of our single-family homes the month they went on the market since last July, and has 100% on-time rent payments for all new leases signed since last May. We operate outside of Portland as well (Hillsboro, Beaverton, Lake Oswego, even Oregon City and Sherwood), but overall the market has remained very strong, especially for SFHs. I wouldn't recommend attempting to time a market like Portland. It was the last inexpensive West Coast city, sandwiched between two of the most expensive metros in the country (Seattle and San Francisco), and has geographic constraints that will likely lead to supply outstripping demand both for sales and rentals. I would recommend looking at properties in Clackamas and Washington Counties if you would like to avoid PDX / MultCo regulation.

    4Reply
  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    5y

    I would look at LA and San Fran

    If you would be comfortable owning rentals there now I would invest in Portland 

    4Reply
  • Jeff S.
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    5y

    @Lara Nicole the problem in 5 years could be entirely different than what is going on now. The big picture would say the fed can't print money forever so while prices will increase for a while as rates rise once unaffordability is reached things turn around. When people see prices leveling off and declining they wait and waiting makes prices go down.

    As a Portland landlord I feel at risk turning my property over to potentially destructive individuals that the city whole heartily supports. I have 3 in PDX and am moving one out of Portland as we speak.

    If you are an investor it is very possible rents will increase because of a lack of availability which would be good for younger people with time to spare. I have less time for work and rentals so would rather invest in fun things and not the kind of worries Portland brings to me. Older people can run large on money but short on time.

    2Reply
  • Chace Fraser
    Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
    5y

    @Lara Nicole I agree with @Kurt Lane. We work with a lot of investors and buyers who are looking to invest or house hack either SFR's or multi-family... and many of them won't buy in Portland proper. We personally own and are house hacking a duplex in Milwaukie about 1/4 south of the Portland/Milwaukie border and are very happy we're in Clackamas county.

    Feel free to reach out if you'd like to hear about some strategies people are employing that maybe in line with your concerns.

    4Reply
  • Taylor Rhodes
    Real Estate Agent · Portland, OR · Member since 2020 · 25 posts · 10 votes
    5y

    @Lara Nicole I think your concern is valid. 

    However, the buying pressure on the Portland market is certainly still very strong.

    People want to live here for the location and weather alone, I don't see that changing much.

    Portland is not what it once was ~5 years ago, and I think it is important to remember that the trend here in Portland (much like nationally) is to move a little further out of the city and into the surrounding suburbs.

    2Reply
  • Joseph Crunkilton
    Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
    5y

    @Lara Nicole

    The city is a bit of a toss up. The surrounding areas are very strong although you're going to have to get creative for cash flow. My fiancee and I are buying out in Newberg and once we move out will convert it to a rental or STR.

    With every law they put in place you just need to become more clever. There are some seriously savvy PM's in town that know how to make the system work. I don't own any rentals locally but if I did I'd be focused on the suburbs. 

    3Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 598 posts · 312 votes
    5y

    @Joseph Crunkilton What area of Newberg are you purchasing in?

    [email protected]541-231-1256
    0Reply
  • Joseph Crunkilton
    Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
    5y

    @Grant Schroeder

    Near George Fox. Primary residence. 

    0Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 598 posts · 312 votes
    5y

    @Joseph Crunkilton That's a great area! My wife and I live near the university as well. If you ever want to talk real estate, Investor Lab and @Ben Nelson have some great networking opportunities with local investors, contractors, PMs, etc. If you have questions about student rentals or the lending side of things, I'd be happy to help as well.

    [email protected]541-231-1256
    1Reply
  • Josh Gold
    Investor · Newberg, OR · Member since 2016 · 22 posts · 12 votes
    5y

    @Grant Schroeder and @Joseph Crunkilton I'm in Newberg as well! My wife and I own a duplex which we house hack over near Bi-Mart. Would love to get in on the investment chats. We've saved just about enough to get a SF home for us so we can fully rent the duplex. Goal would be to live in flip the new home and the duplex will just about pay for the new SFH mortgage once fully rented.

    2Reply
  • Benjamin Kirkpatrick
    New to Real Estate · Portland, OR · Member since 2018 · 11 posts · 6 votes
    5y

    @Lara Nicole Since I am not currently investing in the area, I cannot offer any real data to back up my opinion. Still, just my two cents: I see the demand and appreciation for SFH steadily increasing in the future. Like others have mentioned, Portland is located in an interesting region geographically, between several major west coast cities: Seattle, San Francisco, and LA.

    Regardless of the wacky laws and lack of law enforcement, people will still want to move here. The kind of people attracted by those stipulations is a whole other conversation. Not to get political, but many of the things you mentioned (homelessness, increase in crime, and the overall lawlessness) can be traced back to the people running the show here in Portland, who are voted in by people who live here. So, in my opinion, these things kind of feed off each other.

    I personally moved to Portland because I, like many others, appreciate the natural beauty and landscape of the PNW. I want to be within arms reach of the beach, mountains, and forest. However, I came to learn very quickly that there is a lot of pros and cons to living and/or investing here.

    With that being said, I cannot see myself staying here long-term; however, I do see Portland increasing in value and appreciation over the next several years. As others have mentioned, Portland is surrounded by protected land, so we really do not have an opportunity to continue sprawling outward like LA. Portland is also a unique location that tons of people will continue to visit (at least I hope so).

    Investing in the suburbs surrounding Portland may be your best bet (Gresham, Tigard, Beaverton, etc.) since these locations tend to attract a different crowd than the downtown crowd if you know what I’m saying. Brandon Turner said on one of his webinars that he always asks himself before investing in a specific location if he feels comfortable with his wife running alone outside at night. The point being, would you feel safe walking around the neighborhood you’re about to invest in at night by yourself?

    I hope this can provide you with another perspective. Again, just my two cents!

    -Ben

    4Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 598 posts · 312 votes
    5y

    @Josh Gold That's awesome Josh! Do you think you will buy your SFH in Newberg as well? Let me know if you'd like to swing by our Academy Mortgage office in Newberg or hop on a call to talk strategy for your next purchase. I am glad to help!

    [email protected]541-231-1256
    0Reply
  • Jonathan StonePro Member
    Rental Property Investor · Camas, WA · Member since 2020 · 284 posts · 202 votes
    5y

    Looks like this thread was posted twice.  Once in Portland, Maine.  I will refrain from saying the same things again and link

    https://www.biggerpockets.com/...

    Also I am in Tualatin and if you all are going to do a meet up in Newberg, I would love to join.

    1Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 598 posts · 312 votes
    5y

    @Jonathan Stone We have meetups once a month at Bellingar Estates in Newberg for Investor Lab hosted by @Ben Nelson. Come check it out! We do deal analysis, local economic/market updates, and cover a wide range of topics from flips & airbnb to house hacking & wholesaling. Feel free to shoot me or Ben Nelson a DM and we can get you connected to the meetups.

    [email protected]541-231-1256
    0Reply
  • Ben Nelson
    Specialist · Newberg, OR · Member since 2009 · 93 posts · 71 votes
    5y

    @Jonathan Stone @Josh Gold @Joseph Crunkilton - would love to connect with you guys. We have a small but growing investor group that meets up in Newberg once a month, and we’re connected with a larger group based out of Portland. DM me your email addresses if you’d like and I can get you added to our notification list. We’re pretty limited on attendance in person at the moment but hoping things will continue to open up so we can host a larger group (plus with the nicer weather we can expand outside). We discuss lots of different topics, but the goal of the group is to connect local investors as well as breaking down deals and numbers together. We’re not the “fly in an expert and let them sell something” type of investment group. ;) We’re the down in the details, breaking it down and discussing relevant topics and creating opportunities for investors to learn and work together type. Hope to connect with you all!

    Thanks @Grant Schroeder for the mention.

    2Reply
  • Holly B Beck
    Member since 2020 · 1 post · 0 votes
    5y

    I’m looking to expand my rental properties. I have 70 to 85K cash to play with now. I have one completely paid for Lake Oswego rental, a 2nd in the works.  Looking to expand and retire early, and open for meet ups in Newberg. I am in Tualatin. 

    0Reply
  • Victor Tran
    Portland OR · Member since 2021 · 3 posts · 5 votes
    5y

    @Grant Schroeder @Ben Nelson


    Are the meet ups you guys are doing specific to the Newberg area or do you also look at surrounding suburbs as well? I would love to be a part of this!

    1Reply
  • Grant SchroederPro Member
    Lender · OR ID AZ CA WA CO NV TN MT · Member since 2018 · 598 posts · 312 votes
    5y

    I will message you @Victor Tran 👍🏼

    [email protected]541-231-1256
    0Reply
  • Ben Nelson
    Specialist · Newberg, OR · Member since 2009 · 93 posts · 71 votes
    5y

    @Victor Tran We talk about both the Portland metro as a whole and also Yamhill county and the surrounding suburbs. Most other groups meet in Portland and talk about the city, so we definitely are trying to make sure we discuss some of the areas outside the city since not everyone invests there. A lot of our group invests in the Yamhill county area, but we do discuss the other suburbs around Portland as well.


    Our next meeting is April 22nd. We have a low cap for in person attendance but will facebook live the meeting as well. The focus of this meeting (and one of the main goals of the group in general) is deal review and analysis, so if you’re looking at something currently that you’d like us to break down and discuss as a group we’re looking for deals to put up on the board and analyze. Feel free to message me your email and I can get you on the announcement list if you’d like.

    0Reply
  • Wendy Fontaine
    Member since 2020 · 4 posts · 0 votes
    5y

    I am in Dundee and would be interested in Meetups as well.

    0Reply
  • Jose Rodriguez
    Member since 2021 · 3 posts · 0 votes
    5y

    I'm new to Clackamas (used to live in SE PDX, prior to recently moving back up from the Bay Area) and would love to participate with the REI meetup.

    I’m also as green as they come to this world, don’t have anything invested yet, but am eager to get my foot in the door & am always open for learning & discussions. 

    Long story short, I’d like to join the meet up. Cheers. 

    0Reply
  • Bryan Danger
    Specialist · Portland, OR · Member since 2019 · 81 posts · 88 votes
    5y

    As a small investor in the Portland market for the last 15yrs we see and have discussed the things you're seeing and the concerns you have... there are certainly issues to be worked through and the current landlord regulations have indeed been trending in a difficult direction, BUT -

    the overall value of Portland hasn't changed and the current issues have many, many smaller investors/landlords jumping ship right now.  Those properties are being snatched up rapidly by larger investors and the prices continue rising; pricing what should be the next round of small investors out.  

    Our properties continue to rent quickly to good tenants (and that was mostly true even through covid)... and I think those willing to hold on and weather the storm (if we can even call it that), will find themselves in a very good situation indeed.  

    As stated above, picture this as similar to what happened when landlord regs and rent control were first discussed/implemented in SanFran or LA... if you went back in time and had a property in SanFran then, would you wish you had sold it or wish you held on/bought more???

    2Reply
  • Kelli Leong
    Investor · Portland, OR · Member since 2022 · 6 posts · 0 votes
    4y

    Portland has definitely changed and I would avoid certain neighborhoods.  However, I think as a long term investment the Portland metro area still offers many great investment opportunities.  People have still continued to move here and the surrounding natural beauty is intact.  Specifically, I think the recently passed House Bill 2001 (HB 2001) provides a unique opportunity not available in other states.  This requires cities in Oregon to allow small multi-family buildings on most residential lots (2-4 units).  I am currently close to breaking ground on a couple four-plexes due to the new zoning required by the new legislation.  I plan to hold them as long- term rentals.  Wish me luck!

    0Reply
  • Jose Rodriguez
    Member since 2021 · 3 posts · 0 votes
    4y

    Good Luck to you Kelli Leong! If you don't mind me asking, I have a few questions regarding new builds.
    Are you building new structures on properties that you already have? Or are acquiring new land?
    Are you building in the Portland area? Portland proper our surroundings?
    Do you, or anyone here, have experience with & recommendations for building new property as investment properties? I find it intriguing, but confused as to how long until a return happens?

    Please bear with my questions as I'm very new to this environment and have yet to invest in/create anything.
    Cheers & Thanks in advance for any input.

    0Reply
  • Kelli Leong
    Investor · Portland, OR · Member since 2022 · 6 posts · 0 votes
    4y

    Hi Jose-

    Current project is on land I already had and subdivided.  This is in Washington County (Beaverton).  The new law is the main reason I am interested in this model so I don't yet know of anyone else building new construction to rent in the area (other than partners doing other lots on this project).  Putting 4 units on a standard residential lot (up to 6 units allowed in Portland) pencils out. I like being able to have control over the design (size of units, number of bedrooms etc).  Plus it will be new.

    If this goes well I am considering doing another 4-plex in Portland- would probably look for a tear down if no vacant lots available.

    Cheers

    0Reply
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