All different types of properties are viable. Single family homes that rent well are smaller houses. The perfect rental is a three bedroom, two bathroom home that’s about 1,500 square feet and rents for $1,800 or less. We can rent those properties all day long. They are popular and affordable. With single family homes, you’ll have to anticipate putting a bit more down when you’re buying. They aren’t quite as easy to leverage as other types of properties.
With plexes – a duplex or a triplex or a quadriplex, tenants are going to look for privacy. These tenants are often moving up from an apartment to a plex. The number one request we hear from our plex renters is that they want privacy. So look for those properties that have private yards, or some extra space that they aren’t getting from an apartment. There is a tiny bit of leverage when you’re buying a plex. Even if one side is vacant, others are probably rented so you have a starting income.
Any time you buy an apartment, we recommend that you don’t buy the lowest building or the highest building. You want what we call the bread and butter properties. These are the middle of the road apartment buildings that appeal to a wide variety of renters. Housing is always a safe investment. People need a roof over their heads, so the middle of the road apartment is the easiest. With multi-family housing, our recommendation is to find the best location. People want a good location when they are looking for an apartment. Those rent a lot quicker than apartments with an obscure location.
With all these options, you want to make sure you’re buying in a growth area. Portland has a booming rental market, so always buy in an area where there’s a strong demand for rentals. When you’re buying a single family house, look at school districts and parks. For plexes and apartments, you’re looking for walkability. People will want to be able to walk to restaurants and public transportation.Think with your head not your heart. Don’t get attached to a property or a house. You want something that will produce good cash flow. At Fox Management, we are here to guide you and let you know what the comps are in each area you are considering a purchase. We know what’s ideal for your target market and what renters want.
It’s vital to know a property’s cash flow potential before you buy. You have to know your budget, and be sure that your property will provide enough cash for ongoing expenses. You don’t want to underestimate those. Your budget needs to allow for general maintenance, preventative maintenance and capital improvements. If a tenant suddenly moves out, make sure you have enough money to cover lost rent and turnover costs as well as your mortgage and insurance.
So the Portland market is great. We are a huge foodie town with lots of growth areas and exciting neighborhoods where getting to a good restaurants simply requires a walk. Contact us at Fox Management and we can direct you to the best area of town and give you our best competitive analysis.