There’s nothing better than the smell of fresh forest air that permeates Oregon. Between the state’s magnificent forests, beautiful coastline, and vibrant urban areas, it has all the ingredients a real estate investor could ever ask for. But if the talk of forests didn’t clue you in already, many areas of the state aren’t exactly packed with people, and that can make starting an investment property business in Oregon a bit more complicated.
At the start of my investing career, I thought that I’d make a lot of money by gobbling up rental units in the eastern extremes of the state. Because property prices were so low out there and there were so few rentals on the market, I thought I’d have a monopoly if I could just grab a few units in the same area. Thankfully, I couldn’t execute that (really bad) strategy because I simply couldn’t find any properties that fit my bill, and the market seemed to move at a crawl. Getting enough leads to feeling good about my prospects for purchasing was a major obstacle, and it took me a few years to figure out a better way of doing things. In any event, I never doubted that rental properties were a great investment in my financial future, so I at least got that part right.
In this article, I’ll share my knowledge with you so that your business launch goes a bit more smoothly than mine did. Let’s start by taking a look at what makes the Oregon market so special.
What You Need To Know About The Oregon Real Estate Market
There are quite a few opportunities to buy investment property in Oregon, but you’ll need to know where to look and which methods are the most effective.
In general, Oregon’s real estate market is characterized by:
- Average-quality housing stock
- Urban areas with a sufficient number of buyers and sellers
- Rural areas with few buyers and sellers
- Average renting and selling prices
- Up-and-coming coastal towns
Most of the opportunities in the state are concentrated in Oregon’s cities like Portland, Eugene, and Salem. While there might be the occasional attractive flip to be found in the rural eastern part of the state, for the most part, the lack of strong draws to the local economy makes for relatively stagnant conditions. And since the demand for rental units is significantly lower in the sparsely populated wooded regions, it’s probably not the best place for investors to try to find leads.
Overall, the most surprising thing for investors to understand about Oregon is that its coastal areas aren’t as expensive or developed as one might expect. That means there are good prospects for long-term investments, but the short-term scene is a bit lackluster in comparison. Plus, unfavorable weather conditions mean that many of the rental properties along the coast experience a strong seasonality, which can make them less profitable to own and rent as vacation homes.
Top Locations For Investment Property In Oregon
Now that you’re up to speed on the basics of the market for investment property in Oregon, let’s dive in and discuss a few of the best areas to invest in.
As Oregon’s largest city, Portland is the state’s number one destination for real estate investors looking to develop an investment property. The city’s demand for rental units is often higher than the supply, though pricing is often a challenge as there aren’t a plethora of moneyed tenants. In other words, targeting the downmarket might be easier than targeting the midmarket, and it’s best to avoid dabbling in upmarket rentals or properties until you have a feel for the tenants and buyers.
Oregon’s capital, Salem, is a small but bustling city where you’ll find higher-quality housing stock than elsewhere in the state and a decent market for both rental units and homes. Salem’s shady lanes and fresh air help to keep property values rising, but finding leads for properties is often a challenge. Local real estate firms have a strong presence here, and investors who are accustomed to hunting for deals via MLSs and preforeclosure or foreclosure listings are likely to turn up empty-handed. So, it’s wise to team up with a local investor who can help you identify favorable homes or units—even if the average selling prices don’t require much capital to take advantage of.
Eugene is, in many respects, “another Salem” that’s located a bit further to the south. The cities have roughly the same population, and their economic characteristics are largely similar, which means that if you’re succeeding in Salem, you’ll probably succeed in Eugene. And while Eugene isn’t growing very rapidly, it’s still one of the top markets for investment property in Oregon.
Newport is a small seaside town where you’ll find a beautiful boardwalk, high property values, and a slow-moving market for both primary occupancy homes and rentals. One opportunity for real estate investors is to improve the town’s quality of housing stock, which is somewhat on the older side compared to Oregon’s norm. If you decide to invest here, be aware that it’ll take quite some time to break even, though seaside real estate is unlikely to lose value anytime soon. And, like in Salem, expect to be running a bit short on leads unless you have a local connection.
Removing Investing Obstacles and Grow Your Business
If you can’t find enough leads, it’ll crimp the growth of your company, and that’s why Oregon can be a challenging place to start for new investors. Thankfully, there’s a solution which helped me get my business off the ground with investment property in Oregon: becoming an independently owned and operated HomeVestors® franchise owner.
With HomeVestors®, franchise owners can participate in nationwide “We Buy Ugly Houses®” marketing campaigns which help you figure out where to compete in Oregon. They also help you build your deal flow by granting access to a steady supply of leads, even in slower markets like Newport. Furthermore, if you decide to start a franchise with HomeVestors®, you’ll learn the ropes from veteran real estate investors, get access to proprietary home valuation software, and work with hard money lenders who can help finance your deals.
If I hadn’t worked with HomeVestors®, I wouldn’t have been able to buy my first rental units in Portland, and my entire career might not have panned out. For anyone looking to give their investment property business in Oregon a huge boost, I can’t recommend it enough.
Want to learn more about finding leads and buying investment property in Oregon? Request information about becoming a HomeVestors® franchise owner today.
Each franchise office is independently owned and operated.