As the largest city in the State of Oregon, Portland has a population of 647,805. This makes it the 26th most populous city in the United States. The city may just move up that list as the rate for population growth is forecast to be twice that of the national rate over the next year. A large and rapidly growing population is a positive trend for any housing market but it’s also important to note that almost half of the population in the Portland real estate market lives in rental properties as opposed to owning their own homes (48% according to NeighborhoodScout). This means that buying a rental property in Portland can make for a lucrative real estate investment.
This future population growth should aid the economy in Portland which, although strong and diverse, has had an issue with attracting qualified labor in the past. In fact, over the last year, the Portland job market only saw a growth of 0.9%. However, with the increase in population, the job market is expected to experience a growth of 42.4% over the next 10 years which is higher than the US national average growth rate of 33.5% for the same time period.
Despite the slow job growth, Portland’s economy is actually flourishing. Historically, this is the best time for the City of Portland and its economy. Currently, Portland is the 3rd largest export tonnage port on the West Coast. In general, the city is a major distribution hub. This can be attributed not only to the port but also Portland’s position near the major interstate freeway systems and the West and East Coast intercontinental railroad systems as well as its international air service. Another major industry that attracts tenants and real estate investors to the Portland housing market is the high-tech industry. Portland houses over 1,200 tech companies. Other key industries include manufacturing and healthcare.
The Portland real estate market leads the Pacific Region in affordability which is an issue in this part of the United States. This is one reason why Portland ranks as the #5 top market to watch for 2019 in this region according to the PWC real estate report. Compared to other markets in the US, Portland ranks #21 for overall real estate prospects. As most other US markets, the Portland real estate market suffers from a housing inventory shortage due to rising costs of construction and tight regulations. However, the PWC ranks the market as #16 for homebuilding prospects so forecasts show that the inventory will increase in the coming years. These are signs that Portland is one of the best places to invest in real estate.
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Portland also leads the nation when it comes to historic real estate appreciation. Since Q1 of 2000, Portland properties have appreciated a total of 158.51% for an average annual rate of 5.05%. Owning a Portland investment property would allow a real estate investor to enjoy significant appreciation as these historic trends continue into 2019 and beyond.
One more reason to invest in Portland real estate is that the market is currently a very cool buyer’s market. In combination with the relative affordability, the high appreciation, the increasing inventory, and the high demand for rental property, a Portland investment property makes for one of the most profitable investments.
Airbnb growth in the Portland real estate market was quickly evident as there were thousands of short-term rental listings across different vacation rental websites. So the city began regulating such rental properties in an attempt to protect residential neighborhoods in Portland. Since 2014, all Airbnb investment properties that are non-owner occupied have been outlawed. The rental property must be your primary residence and you must live there for 9 months out of the year. If you wish to rent out on Airbnb while you’re away, there is a cap of 95 days. Guest stays are limited to 30 days at a time for up to 2 bedrooms in the rental property.
Besides this, Airbnb Portland hosts must obtain a permit from the local officials which will have to be renewed every 2 years. The initial fee for the permit is $178.08 and $62 upon renewal. The cost differs for multi-family homes which qualify for short-term rental permits. The initial fee is $100 and $62 upon renewal.
Short-term rental taxes are also a part of the Airbnb regulations in Portland (6%) as well as a county tax (5.5%). However, the short-term rental platform is responsible for collecting these taxes and remitting them to the city.
Finally, while Airbnb hosts in Portland don’t need the permission of the other property owners in the neighborhood, they must send out a Neighborhood Notice as a courtesy.