When it comes to single-family homes, Oregon is a prime destination for real estate investors. And rightfully so, the state is home to several vibrant cities.
Oregon is also home to breathtaking mountains, refreshing rivers, and some of the world’s most beautiful parks. All these features drive thousands of potential renters and single-family home buyers to the Beaver State every year.
Currently, Oregon’s growth rate ranks in the top 10 in the nation. With the annual rate of growth approaching 1.3%, the population is expected to reach 4.6 million in 2025. It’s worth noting that the national population growth is 0.7%.
Oregon also enjoys a strong and stable economy. The coastal state is home to technology giants in the Silicon Forest. Other key industries in Oregon include green technology, outdoor gear & apparel, food & beverages, forestry & wood products, business services, and manufacturing.
These factors along with numerous leisure opportunities, great educational facilities, and quality healthcare all contribute to making Oregon a smart call for people looking to invest in the state’s real estate sector.
4 Reasons to Invest in Oregon Real Estate
1. The rental demand is growing.
Oregon is a haven for employment and educational opportunities. Naturally, this attracts people from all around the country and consequently drives up population growth.
Employment opportunities can be found in companies like StanCorp Financial Group, FLIR Systems, Columbia Sportswear, Precision Castparts Corp and Nike, Inc.
Famous universities and colleges in Oregon include Western Oregon University, Portland Community College, Oregon State University, and the University of Oregon.
These opportunities attract a lot of recent graduates and professionals. Consequently, it drives up demand for rental housing.
Higher demand means you won’t have to worry as much about filling vacancies. Also thanks to high employment opportunities, chances of finding great tenants is relatively high.
2. There are many job opportunities.
There are many industries with headquarters in Oregon. Such industries include forest and wood products, outdoor gear and apparel, food and beverages, advanced manufacturing, business, clean tech, and high tech.
From January 2017 to January 2018, the state experienced job growth of 2.7 percent. This was the fifth fastest job growth, which was higher than the national average of 1.6 percent.
At 2.7 percent, the job growth in Oregon was even higher than in states like California, which experienced a growth of 2.4 percent during the same period.
Combining this impressive growth rate with a low employment rate makes Oregon attractive to buyers and renters to the area. To a real estate investor, this means potentially high demand for their investment properties.
3. The rental vacancy has reduced.
A rental vacancy is every landlord’s worst nightmare. It essentially means no income at the end of the month.
If you are looking to invest in Oregon’s real estate, then you’ll be happy to hear this: in a decade, the vacancy rate went from a high of 6.39% in 2005 to 3.17% in 2016. This is impressive considering that the national average is about 6%. Moreover, the state’s median gross rate is $1,015, whereas the national average is $981.
Plus, rental prices have drastically increased over the past couple of years. While rental prices nationally have jumped by 7.80%, those in Oregon have increased by a whopping 13.79%.
What exactly do these numbers say?
Well, first and foremost, this means an increasing number of renters are searching for a place to rent. The higher the demand, the higher the rental price tenants may be charged.
Secondly, it signifies that you will have an easier time finding tenants to occupy your rental property.
4. Oregon has fair entry prices for homes.
Did you know that a staggering 64,750 people relocated to Oregon in 2016 alone? And the numbers have only been increasing since.
On top of being a popular relocation spot, the state also enjoys a high rate of population growth, 0.89%.
Even as demand for rentals grows, entry prices for homes have stayed relatively affordable. New houses, for example, sell for an average of $417,700 in Portland, $270,000 in Eugene, and $232,900 in Salem.
As such, real estate investors can buy reasonably-priced homes and enjoy the increase in rent prices in the long term.
Best Places to Invest in Real Estate in Oregon
1. Jennings Lodge
Jennings Lodge is located about 11 miles south of Portland. It’s an unincorporated community of about 7,000 in Clackamas County. Houses are priced on average $151 per square foot.
Jennings Lodge has lower property taxes and housing costs, and is less expensive than nearby Oregon City.
Prineville is an up-and-coming outdoor recreation area that offers access to fly-fishing, hiking and mountain biking. Its economy is diversified, and last year, several new businesses invested millions of dollars in building development.
Located between Eugene and Roseburg, Yoncalla is a city of just over 1,000 people. The timber industry is recovering, and this has seen vacancy rates drop 10.8%.
Housing prices here are on average $86 a square foot, and county taxes are a low of $2.57 per $1,000 of assessed evaluation.
This city has seen its vacancy rate drop by 3.7%. This has been the biggest drop statewide. Pendleton residents have the advantage of accessibility to St. Anthony Hospital and the Eastern Oregon Regional Airport.
In the past five years, Hermiston has seen business investments worth millions of dollars from companies like FedEx Freight, DuPoint Pioneer and ConAgra Foods Lamb Weston.
Its proximity to interstates 84 and 82 make it the city’s transportation hub. The strong economy has helped boost the housing market with a favorable score on Zillow’s market health index.
In the past 10 years, Bonanza has seen 76% of houses increase in value. The county tax rate is low at $3.55 per $1,000 of assessed value. Homes are also reasonably priced at just $100 on average.
Oregon is a rapidly-growing and developing state that offers a myriad of opportunities for any serious real estate investor. Leisure options, good education, state-of-the-art healthcare, and job growth all make Oregon an ideal market for real estate investing.
If you’ve ever considered buying a rental property through a property management company and having them take care of it for you, consider asking them a few important questions. We at Rogue Real Estate would love to answer them for you, so give us a call today.