All Forum Posts by: Taj Richardson

 You sound like the right kind of OR. Coast investor for sure. I should have mentioned in my earlier comment the cash flow isn't there with less than 30% down. Break even can be found within the first 12-18 months with 30% or more down. It can be tricky until you get to 40% down but do-able. It's just that most investors what cash-flow NOW with 20% or less down and don't want to 'buy' cash flow with bigger down payments.
If you are in the market for an Oregon Coast buyer's agent who knows STRs I'd be happy to help, if you haven't already signed a buyer's agency agreement. If you'd like to talk shoot me a BP message and I'll send you over my calendar booking link. 

I agree with Jay, the Oregon Coast is not for pure investors. If you are strictly looking for cash flow returns there are far better options than the Oregon Coast. Are there a few gems out there, sure, but you have to be a serious hunter to find them. We don't have wholesalers out here; no real investment focused real estate agents either. Most Coast agents are semi-retired/don't need the money type agents who will sell you what's on the MLS only, and there are no deals on the MLS.

That being said, if you are interested in the long game on the Oregon Coast, the equity appreciation is hard to be. I've tracked the average sold price of homes on the Central Oregon Coast since 2000 and they average 10% appreciation year over year. The key word there... Average. I don't expect that kind of return over the next 1-3 years, in fact I think flat for a year or two then a downward trend for a few years after that... But I'm just crystal-ballin' so believe your own crystal balls on that.

The Oregon Coast for investments only really makes sense for people who just have the dream of owning real estate on the Oregon Coast and hope to maybe break even on cash flow after a few years of ownership, and there are plenty of people interested in that. The only really decent investments on the Coast for your average run-of-the mill investor or person wanting to protect their money in real estate is in short term rentals. There's a reason there isn't a lot of big money on the Coast. 
If you dream of owning on the Coast be very cautious of regulations against STRs, most communities are not STR friendly and some towns have revoked STR permits (lawsuits galore on that), so talk with an Oregon Coast based agent who KNOWS STRs or you could end up with an investment you can't rent and just have to wait out all the expenses of ownership until the appreciation kicks in.

Hi Brian,
There are currently know Oregon Coast meetups that I am aware of. We had one started in Lincoln City right before COVID. We were about 3 meetings in, then the shutdown stopped that momentum. 
There are really no Oregon Coast focused wholesalers or bird-dogs active at this time, but I belong to half a dozen or so Valley based wholesaler email lists and see Coast opportunities from time to time. I've got a few things cooking right now if you are interested in getting a meeting set up shoot me a PM here on BP and we can set something up. Would be nice to connect and maybe meet in person in Feb.

 Thank you for the mention Chris. We're going to find you an opportunity on the Coast soon!

 Thank you, Chris!!

Hi Erica, nice to meet you. For your Oregon Coast search, I can absolutely help, I've been focused on vacation rental investing clients on the Oregon Coast for about the last decade. I know where vacation rentals are/aren't options from a permit perspective, and where the best ROI is.

I'd be happy to connect directly with you, if you would like to know the ins/outs for the markets from Astoria to Bandon, including Gleneden Beach (unfortunately, I don't have good news on Gleneden Beach, but Lincoln City is an option - one of the best options actually). Private message me here on BP if you would like to know more about the Oregon STR market.

Good post, Dan. I would agree, the areas you outlined are definitely top Oregon Coast destinations... but as you mentioned at the end of your post, regulations can cause serious issues with (1) cash flow and (2) even being able to get a rental permit. A few regulations notes for your top 10:

1. Brookings, OR - Currently regulations are reasonable and permits are more obtainable than most areas on the coast.

2. Cannon Beach, OR - Every single home can get a rental permit... that allows an owner to rent to one group every 14 nights. Renters in Cannon Beach still average 3-4 day stays... so that means in most cases rentals are booked about 20-30% of the time. Cannon Beach, being the most expensive market on the Coast, that means cashflow is impossible... at times that is true even for cash buyers.

3. Seaside, OR - Regulations are getting more challenging, but as long as a home is on the west side of the Necanicum River (or Holiday Drive) and not too far north or south, a permit is possible.... as long as Seaside's density rule doesn't restrict a specific address from getting a permit.

4. Lincoln City, OR - Currently the only viable permits can be obtained in commercial, mixed use, or vacation rental zoning zoned areas of Lincoln City. No residentially zoned properties are being allowed to submit permits at this time.

5. Florence, OR (Yachats & Heceta) - Florence, like Brookings, has a really easy regulations and permitting process at this time.

6. Newport, OR - Due to drastic restrictions enacted over the last few years a very small part of town can obtain rental permits, and the waitlist (as I have heard) can be 3-4+ years long.

7. Bandon, OR - A long and drawn out process that can take a year or two to get through... Also, every STR is required to have sprinkler systems installed (true for all of Coos County).

8. Gold Beach, OR - Similar in easy of access to Brookings and Florence.

9. Port Orford, OR - Similar to Brookings, Florence, and Gold Beach.

10. Pacific City, OR - Pacific City is unincorporated, thus you need to know what Tillamook County's regulations are... Currently, like all North and Central Oregon Coast County's at this time, Tillamook County has a moratorium on issuing new permits at this time. That will likely change (with updated and liely more restrictive regulations) mid-2023. 

Bottomline to all of this, regulations should always be the start of the conversation when considering an STR on the Oregon Coast... and often times it can end the conversation as well. Know your regulations at both the city and the county level. You need to call the planning departments & review all their available documentation; do not trust me, or anyone else outside of the planning department to tell you the current regulations... and sometimes you can't even trust what the planning department days, read the rules and regulations.

Be aware that regulations are always changes. Even in areas where regulations changes just a few years ago. Very restrictive regulations have migrated north to south over the last 4-6 years, so while the very Southern Coast is pretty easy right now, you can expect they will get more restrictive like the North Coast over time. 

There are areas you can still get vacation rental licenses, and a silver lining for anyone with a permit now & in the near future is that regulations are drastically restricting the supply, but the demand is only going to grow over time... so you could be in for much better cash flow in the future vs. today with the squeezed supply likely to continue.

First.... Yes, I am with Vacasa... Second, that isn't why I'm responding. I'm responding because I am on the Oregon Coast as an investment focused Realtor with keywords set for the Oregon Coast and Investing here on BP. It's pretty clear you don't like Vacasa, but from these comments you don't likely know enough about Vacasa's offering to judge. Have you rand any trun net to net comparisons on your lake house? I think you will find it is much closer when looking at the bottom line of the investment that might be managed by Vacasa, instead of focusing on our variable commission rate (based on 1000's of factors). Might be worth a conversation with a Vacasa rep local to your lake house. Of course managed properties are not for everyone, but there are 10's of thousands of STR owners out there that have no interest in self management, Vacasa is there for them along with any other property managers. In my 9 year experience working with vacation rentals Vacasa is very competitive, and most often outperforms most other rental management companies.
Regarding not being able to touch homes in the Central Oregon area under $1M, message me if you would like to see the 100's of homes listed for sale in Central Oregon right now priced under $700k.

Hi Trevor,

The Oregon Coast is a popular vacation rental market but regulations have limited the options along the Coast. The good news is that Florence remains one of the more STR friendly markets on the Coast. The numbers generally look good there as well... but good numbers are relative to the market.

If you want cash flow with a standard 25% down payment you will want to look somewhere else. If you want amazing appreciation for the long term benefits, the Coast is a solid option. You can find cash flow with 20-25% down on the Coast, the most common cap rates on the Coast are around 4.5%-5.5%, 6%+ caps are rare finds... They are out there, but you have to be willing to find off market deals, and for the Oregon Coast that is basically up to the buyer. There are not wholesalers here on the Coast, and I don't know of any RE agents that are out there seeing off market deals for their clients. 

As far as analytical tools, the most commonly used in our area is the AirDNA Rentalizer, I find it is usually about 20% to generous, generally. So if the tool tells you $100k a year, run your numbers at $80k and if you like what you see then keep that property as an option. If you are going to self manage it might be a little better, like 10% instead of 20% off, but better to be conservative if you need cash flow. If you are considering property management the commission is usually between 25-35% on the Coast. 

When I underwrite deals I usually start with a few simple benchmarks for our area. I usually will look at a property that looks like it would be a good rental, then I figure out it should make something like 9% of the purchase price in annual rental income. Then I divide that by half for operating costs. Then you have the remainder for covering your mortgage and after that any profits you might have. If you find a home that meets these requirements on the Coast (cash flow positive with a 9% gross yield) you have an interesting opportunity.

Best of luck, let me know if I can assist in any way.

@Rob Wescott I just messaged you with some contact info for one of my colleagues in Washington.

Lincoln County currently has ongoing litigation against a vote that took place last November that would drastically reduce the ability to get a vacation rental permit in most of unincorporated Lincoln County. The County Commissioners have also been making changes to regulations for unincorporated Lincoln County recently, and we've been in a rental permit moratorium for about two years. ....needless to say, Lincoln County has become very unfriendly to vacation rentals over the last few years.
Unincorporated Lincoln County is a high risk area for pursuing vacation rentals at this time, but the County is issuing permits for some zonings. The zoinings they are not issuing permits for include R1, R1A, R2, RM, and some other residential zonings. Those four zonings make up the bulk of homes in Lincoln County... so it's possible, but not easy to find unincorporated Lincoln County vacation rentals.

As far as the cities in Lincoln County that go, Lincoln City and Waldport are the safest areas to look for rentals. Newport and Yachats have basically made it impossible to get a rental permit anytime in the next 2+ years. Lincoln City has zoning restrictions as well, but not as challenging as unincorporated Lincoln County.

Tillamook County is more friendly (though their permit fees are pretty high) than Lincoln County towards vacation rentals, and Lane County/Florence has some really great looking vacation rentals right now, and light permit restrictions.

Things are always changing, and usually not for the better when it comes to obtaining a rental permit, so I recommend to my clients they focus on areas with established and reasonable regulations. For the North and Central Coast that would primarily be Rockaway Beach, Oceanside/Netarts, Pacific City/Neskowin, Lincoln City, Waldport, and Florence.

Feel free to private message me if you would like to know more about the best places to look for STRs on the Oregon Coast.