Portland Real Estate Investing tips

Quick Hits: If you’re planning to buy a home, do it now before prices go higher. If you’re thinking of buying a
rental property as an investment, be careful how much you pay. Investments in housing developments will do well in the next couple of years, especially apartment projects. Mortgages written now will be protected by rising prices for a year or so, but will be riskier after that. It’s a good time to invest in retail businesses, especially in Clark County.

The local economy leans heavily on Nike, Intel, and international trade and for many years has grown much faster than the US average. Dependence on a computer chip manufacturer is a vulnerability these days but right now the high wages support a strong real estate market. International trade, especially with Asia, could be more volatile in the future as political opinions about imports change with the upcoming elections.

Even though population growth has been modest, home prices rose sharply in recent years, 34 percent since 2012, partly because of speculation in foreclosed homes. You can bet they’ll keep rising near that pace for the next few years, which means you’d better buy the home you’ve wanted now rather than next year.

Home prices are already high compared to rents, so apartments will be in greater demand – but with home prices so high, good returns on single-family rental properties you buy now will be difficult to get unless you buy at a very good price and don’t need to do much rehab work. Be conservative in your property income projections because rents – although protected by higher home prices – won’t rise as fast as they do.

With home prices already above income levels, in another few years we’ll see an over-priced market, which will mean riskier mortgages. If you’re buying or holding property to sell, that will be the prudent time to cash out – or you could hold for a couple of years after that and ride the boom tiger.

The metro area is growing at an uneven pace, with the fastest growth now in Clark County, across the river. I expect 10,000 new homes built in Clark County over the next three years, and  8,000 new apartments. In much larger Multnomah County I expect 10,000 new homes and 13,000 apartments.

The original article can be found HERE on Forbes website.