While 2020 and 2021 brought us many challenges, it also brought us unique opportunities, especially in the world of real estate. Here in the PNW and all across the country, we experienced record-low interest rates and an increase in demand (coupled with a decreased supply), which made the market that much more competitive for buyers.
Not to mention, the pandemic dramatically altered the way in which we view home — and even the way in which we live our lives. The sudden shift to remote work made the location of our homes much less tethered to our places of work. And as a result, many moved to places they truly wanted to live — the beach, the mountains, or even across the country — without having to change jobs.
And to some level, this new way of life is here to stay! You may be dreaming about owning your own vacation home in your favorite getaway destination — one you can visit from time to time (or even for an entire season) and rent out when you’re not there, either on a short-term or long-term basis. The income you generate from this setup may well be worth the investment, whether you plan on eventually living in the home or selling it down the road.
There are several cities and communities in Oregon and Washington with thriving rental markets, due to their popularity for tourists, relative affordability, and other factors. Here are a few you might consider if you’re looking to invest in a rental property in the near future!
As the unofficial “Windsurfing Capital of the World,” Hood River attracts thousands of kiteboard enthusiasts each summer. Not to mention, the town is perfectly positioned in the shadow of Mount Hood, making it an ideal homebase for skiers and snowboarders during the winter and early spring. Plus, Hood River is a must-see during harvest season in the fall, when surrounding orchards are ripe with a variety of fruit and vegetables, especially along the renowned Hood River Fruit Loop.
All in all, Hood River is a year-round destination for travelers of all kinds, making it an ideal place to purchase a rental property. But as such, housing prices can be a bit intimidating in Hood River. Consider looking around at some of the other charming communities along the Gorge, which may offer lower price tags — while maintaining proximity to the many attractions in Hood River.
Need help finding a home in the Hood River area? The Jen Dillard Team can help!
We all know Seaside, Cannon Beach and other coastal towns are common vacation spots for Oregonians — and others living throughout the Pacific Northwest (and the rest of the country!). So naturally, these towns (Seaside, in particular) make for an excellent choice for a vacation home — one you can take advantage of yourself.
But don’t take our word for it! Seaside was listed as one of The 10 Best Places To Buy a Vacation Home in 2021 by Vacasa, an international vacation rental management company based in Portland. According to data gathered by Vacasa at the time of the report, Seaside had a median home price of $466,086 and an annual gross rental revenue of $45,249. And the vacation rental market cap rate (or the rate of return on a real estate investment) was 5.2%, which is considered good.
It’s no secret that Central Oregon is a popular destination for outdoor enthusiasts of all kinds, with Bend as the anchor. While many are searching “Bend” on Airbnb and other vacation rental sites, the local market is a bit trickier to get into, as the city has grown significantly over the last several years, in both population and popularity — and therefore, price.
If you’re looking to get involved in the Central Oregon rental property market, you might want to look a little further out of town. But you don’t have to go too far! Situated less than 20 miles northeast of Bend, Redmond makes for an ideal home base for outdoor adventure, especially as Smith Rock State Park is just up the road in Terrebonne. But there’s plenty to do right in town too, from sipping beer at a local brewery to shopping in the historic downtown area.
Redmond has seen significant growth over the past decade, and there are many new construction developments to prove it. It is both an attractive opportunity for traditional homebuyers as well as investors. After all, Mt. Bachelor Property Management included Redmond as one of the 4 Best Places in Central Oregon to Invest in Rental Property!
Need help? We have an office in Bend — contact our Central Oregon team to get started on your home search in Redmond.
Let’s throw a wild card in the mix with a town you may not have heard of — or at least, heard very little about. But it’s not exactly off everyone’s radar, as it was recently included on Vacasa’s list of Top Vacation Home Locales. This tiny town is nestled between Government Camp and Zigzag (yes, that is a real place) along the Mount Hood Scenic Byway. These communities surrounding Mount Hood shine during the winter, when Portlanders flock to the slopes, seeking refuge in a quaint, cozy cabin tucked away in the forest. And of course, it’s a popular getaway destination during the summer, when just about every single outdoor activity is in season.
At the time Rhododendron was included in the ranking, it had a median home sale price of $315,744 and a cap rate of 4.7%.
Positioned at the confluence of the North and South Forks of the Yamhill River in the Willamette Valley, McMinnville is a popular destination for wine lovers. Plus, McMinnville is an oasis for foodies, and has even garnered national attention for its thriving culinary scene. Several years back, McMinnville was named the “foodiest town” in the United States by Bon Appétit magazine, and the title still holds up. But there’s more to do than just eat in McMinnville! The town is home to Wings and Waves Water Park, Joe Dancer Park, and the Evergreen Aviation & Space Museum, which is where Howard Hughes’ famed Spruce Goose resides.
But all these attractions aren’t why McMinnville made this list; it’s the town’s rental market that is especially promising. TurboTenant included McMinnville on their short list of The Best Places to Buy Rental Investment Property in Oregon, highlighting its steady population growth, increasing home values, and the short time listings spend on the rental market.
Nestled along the Pacific Coast, Pacific Beach is a tiny community home to eight state parks and a National Wildlife Reserve. Many use this area as a home base for exploring the forests and beaches on the Olympic Peninsula, including the renowned Olympic National Park. This stunning, forested region feels untouched and remote, yet isn’t far from Olympia or even Seattle, for additional exploration of the urban kind.
And for investors, Pacific Beach rental properties are relatively affordable, with a median home value (2021) of $153,000 and an impressive rental yield of 8.01%. GOBankingRates even ranked the town as the best place in the entire state to buy a rental property!
All Washingtonians are familiar with Lake Chelan, the long and narrow lake in north-central Washington many families flock to in order to escape the heat each summer. With a maximum depth of 1,486 feet, Lake Chelan is the third deepest lake in the country! But perhaps more importantly, the water is extremely cold, providing a refreshing escape from the high summer temperatures of Chelan County. And there is plenty of heat — and sun, as the region boasts 300 days of sunshine each year. Not to mention, the lake is surrounded by lush vineyards and apple orchards, making it a desirable destination during the fall as well.
Take advantage of the high demand for vacation rentals by owning your own piece of property in this resort town. Even in the off season of winter, the average vacation rental in Chelan has a 70% booking rate; and it maintains a steady cap rate of 4.3%. These statistics helped land this charming lakeside town on Vacasa’s list of The Best Places to Buy a Lake House 2021!
Often overshadowed by some of its southern neighbors like Cannon Beach and Seaside, the Washington coastline contains a number of charming towns worthy of attention. Namely, Ocean Shores is a quiet, coastal city known for its long beach and network of lakes and waterways. It is a popular vacation destination for Washington and Oregon residents, providing a unique beach experience with moody water views and wildlife aplenty.
Ocean Shores isn’t just a household name for Washingtonians; it has garnered national attention, landing the #2 spot on Vacasa’s list of The 10 Best Places to Buy a Beach House in 2021, Ranked. This ranking was based on a number of factors, including the low barrier to entry for many buyers, with homes averaging around $250,000. Plus, it has an impressive cap rate of 7.8%. Buyers also love Ocean Shores for its proximity to several major urban hubs, including Seattle, Vancouver, Olympia and Portland.
Photo Courtesy of Dicklyon, CC BY-SA 4.0, via Wikimedia Commons
Seattleites are well-acquainted with the many islands and peninsulas accessible via ferry across the Puget Sound. One of the best and most popular ferry destinations is Bainbridge Island, which has plenty of parks to explore, plus a charming downtown area lined with shops, restaurants, coffee shops, museums and other small businesses. The best part? Once you’re on the island, you can take a bridge located at the northern tip to reach other nearby towns surrounded by water, including Poulsbo, Kingston, Bremerton, and more.
Bainbridge Island is also a popular place to own a vacation home, for those living in the Seattle area, elsewhere in the state, or even across the country. In fact, it topped Mashable’s list of the Top 10 Cities to Invest in for 2019 for Washington State Airbnbs. And on the national scale, it was named the #3 Best Vacation Rental Markets in 2019 by FortuneBuilders.
Have Any Questions?
If you’re looking for more information about purchasing a home in the Pacific Northwest — whether it’s your primary residence or a rental property — we’d love to help. Our brokers are knowledgeable about the ins and outs of real estate in both Oregon and Washington, and can help guide you through the process every step of the way. Contact us to get started!