Do you own rental property in Portland? Make sure you know the surprising truth of being a landlord in Portland because it’s not always what you think it’s going to be…
Owning a rental property seems like a great idea. You buy it cheap, you find a tenant, and then you profit from the rental income while you manage the property… how hard could it be?
Problem is, it’s often much harder than people realize and you may find (as many landlords do) the surprising truth of being a landlord in Portland: You give up your personal life – no more private time, no more vacations, no more weekend getaways… all because you’re so busy as a landlord.
Don’t get me wrong. Portland tenants can also be very good. In general they are pretty laid back and not destructive. They moved here for the quality of life and the natural beauty of our environment. But there is always the possibility for problems.
A major issue in Portland is the cost of property. It’s hard to find a deal with a cap rate of 5% or more. And this is if you are willing to manage it yourself. If you hire a property manager you’ll be hard pressed to find a cap rate of 5%. So then you have to ask, “Is this worth it?” And your pro-forma better include a vacancy and cap ex budget. As we’ve discussed in previous posts, having to evict someone or replacing a roof can ruin more than a couple of years of property income.
There’s the work required
Owning a rental will keep you busy. There’s the work required to find the property, then to fix it up, then to find a tenant, then to answer the phone every time the tenant calls. Even if the call comes late at night because the toilet is overflowing, you have to take their call and deal with it. It means no more vacations where you can truely relax because the toilet will overflow when you’re in a different country?
Of course you could hire a property manager but that will eat away at an already thin margin. You say you bought it for appreciation? Then you better plan to hold it for a long time because the current Portland appreciation rate is not sustainable for a long time.
There’s the time
Some landlords try to own rental property while holding down a full-time job. But many discover that managing property is almost as time-consuming as their job. Sometimes it can seem like having a second full-time job! Between chasing down tenants to fix things, and hoping the rent check comes on time, it can be one thing after another. You may simply not want to give up the little free time you have to deal with a rental. And that’s with ONE rental property. Landlords who own two or more are even busier.
Problems like this can be dealt with, though. One strategy is to spend more money on rehabing a property you want to hold so that you don’t have to worry about problems for 10 years or more. This means more money up front. So consider how much rehab you are willing to pay for and the useful life of things like the roof, the hot water heater, the AC, etc. Also consider the quality of the finishes. Better quality paint and flooring means longer lasting appearance.
There’s the cost
Rental properties aren’t cheap. Sure you get some rental income from the tenant but you also have to take care of the property, fix it up, make upgrades, and repair it if the tenants trash it when they leave. In other words, the costs add up and the financial rewards of owning rental property may not be there for you.
Be sure you understand the finances of owning rental property. One good source of information is Bigger Pockets (www.biggerpockets.com). They provide tools for evaluating rental property ownership as well as other real estate investmet vehicles. Also, they provide forums where you can ask detailed questions concerning the assumptions you made regarding your deal.
There’s the stress
Adding all these issues up equals STRESS! Know yourself!! How much do you already handle with work, family, church and other obligations. You don’t want to kill yourself off with rental property. If you are the type that worries about your property constantly then you are probably not landlord material. That’s no way to live.
If you currently own a rental property and want to get rid of it, we can help. This is why we are here. We buy properties, even frustrating rental properties with damage or tenants you can’t get rid of.
Can we make you an offer on yours?
Click here now and fill out the form or call
our office at (971) 246-7954 and we’ll make you a fair offer today.
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