For real estate investors looking for the next great property and location to scale their portfolio, the search can start to make you feel like Goldilocks – comparing purchase prices, after repair values, and appreciation rates, trying to determine which location is just right.
As investors ourselves, and partners in our borrower’s investing journey, we have taken the liberty to do the legwork for you by researching some of the best areas in Oregon to scale your business.
Ontario
The eastern most city on our list is Ontario, located on the Snake River at the border of Idaho. This city is equidistant between Salt Lake City and Portland and is the largest city in eastern Oregon, though its total population is less than 12,000 as of October 2023. Don’t let the size of this city fool you – what it lacks in size it makes up for in opportunity. The average home value is around $292,000 as of August 2023, which is a reasonable price for real estate investors as it is well below the national average. With property prices low, investors can easily find homes for affordable prices, perform the necessary renovations, and sell the property for a moderate profit.
This location typically sees around 2% increase in value each year. This is a strong indicator that investors who use the buy and hold strategy will realize healthy appreciation over time. Fix and flip investors can also succeed in Ontario’s real estate market. About 45% of Ontario’s residents rent their homes versus owning them, so rental property investors have ample opportunity to find positively cash-flowing properties to add to their portfolio.
Hermiston
Fix and flip real estate investors have ample opportunity to find affordable properties in Hermiston Oregon. Located on the border of Washington along the Columbia River, Hermiston is a city known for its agriculture, forestry, and fishing industries, and in recent years has become a hub for logistics and data centers.
This is one of Oregon’s fastest growing cities and approximately 61% of residents own their properties versus renting. With new residents migrating to Hermiston each year, investors who specialize in new construction projects have the possibility to expand their business into this city. For investors that concentrate on short-term projects, the affordable home prices, averaging $334,000, offer the chance to fix and flip homes in this area and make significant profit.
Bend
Central Oregon’s largest city is Bend, located where the Cascade Mountain Range and the Deschutes River meet. Residents of Bend have access to the best of both city and country living. There are many accessible amenities as well as many nature attractions like Ponderosa pine forest. Though it was once known as a logging town, today, Bend is a hub for tech companies.
The abundance of career opportunities in the tech industry, as well as bioscience and aviation industries, attract new residents each year to settle in this city. The home values in Bend are representative of these industries, averaging around $720,000. The higher price point on these homes limits the number of investors that can access properties, but for those who can tap into this market, they will benefit from approximately 8% in year-over-year appreciation rates when they keep the property in their portfolio.
Coos Bay
Oregon’s coastal towns are a tourist destination attracting people from across the country to marvel at the rugged coastline. With the natural beaches, forests, as well as the Bandon Dunes Golf Resort, many tourists travel to Coos Bay to explore the area’s biodiversity each year. Coos Bay, situated on Oregon’s central coast region, generated nearly $300 million in visitor spending in 2022 alone.
Short-term rental property investors can easily profit from the number of people who travel here each year. However, investors should be aware that as of 2022, the local government has issued rules and regulations for vacation rental operators now requiring them to register for a business license to legally operate a short-term rental property. For short-term investors searching for Coos Bay fix and flip properties, the average home value being approximately $334,000 gives investors room to profit.
Astoria
Another coastal city and major port town in Oregon is Astoria. The local economy of Astoria is primarily based around its port as well as the timber and fishing industries. Though the economy isn’t quite as robust as cities like Hermiston, the emerging art scene and light manufacturing industry are growing into strong economic influences. Approximately 49% of residents in Astoria rent their home, making rental property investments in Astoria very profitable. As a coastal city, Astoria attracts thousands of tourists each year, and short-term rental property operators profit from these visitors.
Short-term rental property investing has become a popular strategy, with many investors choosing to operate vacation rentals over long-term rentals in areas that attract seasonal visitors. ABL’s access to AirDNA to evaluate short-term rental metrics has made it much easier to stay current with investing trends and expand our loan programs to incorporate short-term rentals. With the average home value as of August 2023 hovering around $487,000, the cost to enter this market is too high for some investors, but those who can participate can stand to see generous profits as well as the possibility of scaling their investment business.
Portland
The largest, and by far most expensive, city in Oregon is Portland. Located on both the Columbia and Willamette Rivers, just west of Mount Hood, Portland is known for being an ecofriendly and creative oasis where microbreweries and food trucks thrive. Throughout the pandemic years, Portland saw significant increases in home prices attributed to young people leaving the more metropolitan areas of California for more living space. Since then, Portland’s real estate market has started to level out, evidenced by the housing inventory increasing from 1.8 months to 2.2.
Short-term investors who have the capital to quickly flip properties can significantly profit, but it can be difficult to find properties under market value. With 47% of residents renting their homes, buy and hold rental property investors find success owning and operating rental units. Rental property owners are especially successful as many millennials moving to Portland are not yet in a financial position to own property. However, short-term rentals are even more lucrative and can earn up to $33,000 just during the peak season between July and August.
Conclusion
Real estate investors looking for a nudge towards the next great place to tackle can take this as a sign that Oregon holds great opportunities. From the coastal towns where tourists flock each year, to the tech centers of the state, Oregon’s offerings are as vast as its landscape. As with any new location, real estate investors are responsible for conducting their own research to determine the ideal place to land for their investment goals. However, at ABL we work to guide our borrowers to their most rewarding projects, and these six cities in Oregon are great places to start searching.