Incorporating Portland's neighborhoods into your real estate investment portfolio is like embarking on a journey through architectural history. Property types in this city may range from large and luxurious houses to simple and practical homes.
Some of the most common home styles that property owners have in this city of Oregon are bungalows, cape cod homes, craftsman styles, foursquare, mid-century ranch, and Tudor revival.
Aside from its unique, great architecturally unique houses, Portland, Oregon is also popular with tenants looking for a new living space. A large number of individuals are interested in renting in the city because of the robust tenant protections that are in place.
There are also plenty of walkable areas in Portland. Meanwhile, the city's public transportation makes it easy for you to get around if you don't feel like walking or don't want to drive.
Located in the Pacific Northwest region, Portland is the seat of Multnomah County. It is also the largest and most populous city in Oregon, contributing to its thriving housing market. As of July 2024, there are a total of 719 houses sold in the city, with a 10.1% year-over-year rate.
According to the most recent report from the U.S. Census Bureau, the rental vacancy rate is 6.6%. Because there aren't many properties available, those in high demand are likely to be rented quickly, resulting in short vacancy periods for rental homes.
If you're looking to expand your rental property business in Portland, one of the most important things you need to consider is the type of property you want to invest in.
Want to know the property types to consider for the best return on investment (ROI)? Here is a list of homes you can factor in before diversifying your portfolio in Portland, Oregon.
1. Vacation Home or Airbnb Rental
With the current tourism trend all around the globe, investing in vacation homes has become an excellent idea for landlords like you. Location is the most important thing here, so Portland, Oregon is one of the best places to buy these kinds of homes.
Investing in this property can let you generate income from short-term guests instead of long-term renters. This sort of rental property has the potential to generate substantial profits for several reasons:
When there are fewer bookings, you can still utilize the property as a regular rental home to ensure a steady income.
You can set your rental prices higher during peak season. This can give you a greater return, similar to commercial real estate prices, than having the usual monthly rent.
Managing multiple units for a vacation rental is much easier once you set up all the necessary systems.
Having great interior design and community amenities in your vacation rentals can provide you with higher income for a short-term rental period.
2. Detached Single-Family Home
Detached single-family homes are usually the most desirable type of home in the US. According to statistics, 89% of millennials in America prefer to live in single-family homes. The country has many types of single-family houses, including bungalows and tiny homes, and they can be part of a homeowners association that oversees neighboring properties.
This particular unit can give you the best ROI because:
In the long run, it will help you build wealth since its value rises more rapidly than inflation.
This property type can be sold or refinanced due to its high liquidity.
You can easily apply financing compared to commercial real estate properties.
Since most Americans prefer to live in a detached single-family home, you can expect lower vacancy rates for your rental home business.
You can reduce taxable rental income by deducting certain expenses, such as property taxes, maintenance, and mortgage interest.
3. Multi-Family Homes
Properties that can accommodate more than one household simultaneously are known as multifamily housing. Most people think of multifamily homes as properties like smaller apartments or condominiums. However, larger apartment complexes are also considered multifamily homes.
Below is a list of property types you can consider multi-family homes:
Apartment Buildings
A typical apartment building has five or more living units that share walls as part of an apartment complex. You can even see some apartment buildings with hundreds of units inside a single structure. Some communities even have amenities that allow residents to share entrances, common areas, pools, and playgrounds.
Condominiums
Condominiums, or condos for short, are privately owned units in a multi-unit structure. The owners must pay dues to a homeowners association regularly to maintain the facilities and amenities inside their building or community.
Duplexes, Triplexes, or Fourplexes
You can think of a duplex as one building with two separate units. You could put the two units next to each other or on top of each other. The amenities you can find for each of its units are similar to the ones you can see in a detached single-family home.
On the other hand, triplexes have three separate living spaces, while fourplexes (or quadruplexs) have four.
Semi-Detached Houses
Semi-detached houses share a wall with another home, just like townhouses do. However, a townhouse tends to be smaller than semi-detached homes. This property type is more affordable than single-family houses that are stand-alone since owners of semi-detached houses may split the maintenance costs.
Townhouses
Also called townhomes by some people, this property type is usually a unit with at least two floors that shares one or two walls with the unit next to it. Each unit has its own entrance, although it may share some amenities like a yard or parking space. This type of home is also often smaller than regular single-family homes.
These property types are great for ROI because of the following reasons:
You can usually get better interest rates and have a lower percentage down payment when you buy a multifamily property instead of a single-family home.
Having more rental units means generating more income for your rental business.
An apartment building with 100 units usually costs less per door than 100 single-family houses.
It would be easier for you to centralize management and maintenance.
4. Vacant Land
Another suitable property type for investment is vacant land. The only expense you have when you own vacant land would be the property tax, which is cheap and easy to handle.
This tax, however, could add up to thousands of dollars over time, so you will need to make sure that the money you make from selling the land is more than the price you paid for it, plus the taxes you've already paid. You can also profit from an empty land by farming.
Navigate Portland's Real Estate Market with Professional Guidance
Expanding your investment portfolio in Portland, Oregon can be a real challenge. You must maintain your existing rental home while launching and managing your new real estate investment.
Fortunately, it's now easier to form an expert management team with the help of a property management company. Here at Kerr Properties, Inc., we are skilled in managing different residential real estate investment types.
Whether they are tiny houses and single-family homes or apartment buildings with more than four units, we will guide and assist you throughout your day-to-day business tasks with the help of our team of professional property managers.
Get a free rental analysis now and discover the wide range of services we offer!
