When it comes to state markets in 2019, the Oregon housing market is among the best of the best. The state’s real estate market trends allow for successful traditional and Airbnb investing. Today, we’ll be discussing the best cities in the Oregon real estate market for both strategies and why you should invest in them. All the real estate data provided comes from Mashvisor’s investment property calculator. To learn about Mashvisor and how it computes these figures, click here.
The Best Cities for Traditional Investing in the Oregon Housing Market
- Median Property Price: $306,983
- Price per Square Foot: $147
- Price-to-Rent Ratio: 18
- Rental Income: $1,432
- Cap Rate / Cash on Cash Return: 3.0%
Klamath Falls is arguably the best place to invest in real estate for traditional Oregon investment properties. There are many reasons why. For starters, its median property price is much lower than the median Oregon housing price of $495,569. The cost of living in Klamath Falls is also 9.8% lower than the US average. The demand for long-term rentals is also high in the city. As seen from Mashvisor’s data, the price-to-rent ratio of the city is over 15, meaning that, for a resident, renting out an Oregon real estate property is more affordable than purchasing one. Rental income, as seen in the data above, and appreciation are also impressive for the average Klamath investment property. The projected annual appreciation rate for the market is 9.74%, which is one of the highest in the US housing market.
- Median Property Price: $412,856
- Price per Square Foot: $214
- Price-to-Rent Ratio: 14
- Rental Income: $2,389
- Cap Rate / Cash on Cash Return: 3.0%
Sandy is also one of the best cities to buy investment property in the Oregon housing market in 2019. Like Klamath Falls, Sandy provides great demand for traditional long-term rentals. This is particularly due to the population growth in the city. Since 2010, Sandy’s population has increased by almost 20 percent. The city’s market is also warm as it pertains to a buyer’s or seller’s market. This further drives demand for Oregon investment properties in the city. Sandy’s economy is also relatively strong compared to the state. The city’s unemployment rate is 3.6%, compared to the state’s 4.4%, and the nation’s 3.9%. The city’s economy is also expected to grow by 43 percent in the next 10 years, which is much higher than the national average of 33.5%.
- Median Property Price: $309,548
- Price per Square Foot: $209
- Price-to-Rent Ratio: 11
- Rental Income: $2,322
- Cap Rate / Cash on Cash Return: 3.7%
Like Sandy and Klamath Falls, Woodburn is a top destination for traditional real estate investing in the Oregon housing market. Of the best cities to buy investment property in Oregon mentioned in this blog, Woodburn has the highest return on investment average. This high profitability is due to its rental income average and relatively low median property price. Appreciation is another key benefit in this real estate market. According to NeighborhoodScout, the city’s market appreciated by over 34 percent in the last 10 years, placing it in the top 20 percent for appreciation in the US. The projected real estate appreciation rate for the year in Woodburn continues being top-tier, as it is estimated to be 5.77%.
Now that you know the top 3 cities for buying a house in Oregon to rent out traditionally, let’s take a look at the best Airbnb markets in the state.
The Best Cities for Airbnb Investing in the Oregon Housing Market
- Median Property Price: $726,657
- Price per Square Foot: $293
- Price-to-Rent Ratio: 37
- Rental Income: $2,889
- Cap Rate / Cash on Cash Return: 2.6%
- Occupancy Rate: 52%
Airbnb rental properties are another fantastic method for investing in Oregon real estate. The Airbnb Oregon housing market consists of many profitable cities, such as Talent. While Talent has a very high median property price for Oregon real estate investments, it is among the most profitable cities for Airbnb Oregon. While Talent does not have official Airbnb regulations yet, there have been recent proposals for regulation. Real estate investors in the area should definitely pay attention to any further developments in the short-term rental regulations.
- Median Property Price: $422,902
- Price per Square Foot: $232
- Price-to-Rent Ratio: 18
- Rental Income: $2,917
- Cap Rate / Cash on Cash Return: 3.3%
- Occupancy Rate: 58%
Unlike Talent, Milwaukie does have official Airbnb regulations set in place, which you can read about here. Known for its wine bars, kayaking, and aquatic park, Milwaukie is another top Airbnb city in the Oregon housing market. The demand for Airbnb vacation rentals in the city is exemplified by its high occupancy rate of 58 percent, the highest of any city on this list. Milwaukie also has the highest average ROI in Airbnb Oregon, largely due to its rental income average and relatively affordable median property price.
- Median Property Price: $535,423
- Price per Square Foot: $765
- Price-to-Rent Ratio: 30
- Rental Income: $2,632
- Cap Rate / Cash on Cash Return: 2.9%
- Occupancy Rate: 43%
Last, but definitely not least, of the best cities for Airbnb Oregon is Grant Pass. Like Milwaukie and many cities in the Oregon housing market, Grant Pass recently passed Airbnb regulations. Hosts are required to pay a 9 percent lodging tax, obtain licensing through the City Hall, and follow parking restrictions, among other neighborhood rules. Like the other Airbnb cities on this list, Grant Pass is highly profitable. The average rental income is over $2,600, with an average return on investment of about 3 percent. These are merely averages, meaning that an investor’s actual property can generate more in these metrics. This also applies to any of the above-mentioned cities in the Oregon housing market.
All in all, the Oregon housing market is one of the top state markets in the US; some may even refer to it as the best state to invest in real estate. The state’s traditional market is highlighted by relative affordability, profitability, demand, and appreciation. Airbnb Oregon is driven by profitability, demand, as seen from occupancy rates, and increasing legalization and regulation across the state. For more on investing in West Coast real estate and the best city in the Oregon housing market, click here to start your 14-day free trial with Mashvisor!