All rental property investors want to earn as much rental income as possible from their properties.
On paper, this sounds simple. What could be hard about buying a rental property, finding a tenant, and collecting the rent?
In practice, though, things can be a little different. A rental property can be unoccupied for several months and even when it's occupied, you can have irresponsible tenants who damage the property or don't pay rent, causing you to lose money.
One way to solve the occupancy problem? Performing a rental analysis to establish tenant demand, rental prices, and other important factors before deciding to establish a rental in a certain location.
In this article, our focus in tenant demand in Portland, Oregon. Read on to learn more!
An Even Split Between Renters and Owners
When you're looking for an ideal location to set up a rental property, you must consider the demand for rentals. An area with a strong demand means you're more likely to find tenants and fill up your property relatively quickly. It also means you won't need to spend a lot of money on property marketing to attract tenants.
In Portland, there seems to be an even split between renters and owners. About 46% of households in this city are renting. What does this tell you?
A market where the number of renters is more or less equal to homeowners has decent tenant demand. There will always be people to rent your property, but a lot could depend on the supply of rental properties.
If there's a significant increase in rentals while tenant demand remains constant, it could become more difficult for tenants over time.
What's Driving Tenant Demand in Portland?
Rental property investors are flocking to Portland because the rental market is thriving. But what exactly is driving this tenant demand?
First, there's been a surge in population over the last few years. Between 2015 and 2020, for example, Portland's population grew 6%, adding 38,000 new residents. Keep the split between renters and homeowners even, we can conclude that about 50% of these new residents are renters.
Second, Portland's zoning laws play a role in tenant demand, but these laws favor investors who already have rental properties in the city. Zoning laws restrict the number of new construction properties. Consequently, it's hardly possible for the supply of rentals to exceed tenant demand.
If you're looking to buy a rental property in Portland for the first time, don't be discouraged. There are still plenty of rental properties for sale, but you might pay a steep premium. In 2023, the median price of a home in Portland was $549,000, a 3.8% increase from 2022.
Rental Analysis Is the Key to Unlocking Rental Demand
Every savvy investor conducts a rental analysis to among other things, establish a location's rental demand. Nobody wants to invest in a location where the property will have a low occupancy rate because there are no tenants.
Rental analysis requires expertise that most landlords don't have, but don't fret. This is why PMI Bridgetown exists. We're a full-service property management company serving Portland, OR, and have been helping investors make successful rental investments for over 15 years.
Get a free rental analysis or contact us to get a taste of our experience!