Myths About Rental Property Pricing in Portland, OR

Good news, renters in Portland, Oregon. Locals in this great northwestern state who run short-term rentals make more than the median. That's approximately $23,000 a year, compared to $14,000 nationally.

Leasing out a home in this rental market is an excellent strategy for side income. That said, a lot of people get stuck deciding how much to charge for their rental. Rental valuation is a tricky process, so they fall victim to many of the myths surrounding how it works.

Today, let's take a look at rental valuation myths that you should avoid in Portland, OR.

Rental Valuation Is Whatever You Want

People who come to Oregon expect high prices, especially in Portland. This is, after all, one of the places with some of the highest rent in the nation. This can make short-term rentals more limited, so you might be the only option in your neighborhood.

It's a common fallacy for landlords to charge whatever they want just because they can. That's how supply and demand works, right? If there's limited supply, demand soars, and so you have every reason to price your property value high as a rent by owner.

Not so fast. You're going to really struggle to find tenants, severely reducing your ROI. In the long run, you will wish you'd priced it lower.

You Can Raise Rent at Will

Another common fallacy. Even if you start out at the same price as everyone else, there's nothing stopping you from raising it.

First, there are potential legal issues. Sudden increases in short-term rentals-whether vacationers or not-can lead to legal penalties. Especially if you have a tenant that decides to rent for longer 30-day periods.

Likewise, it's going to put a dent in your tenant demand. Raising the rent price should always be a methodical and careful decision.

Rent Increases in Tune With Inflation

This seems like a pretty straightforward idea. Inflation increases at a steady 2 to 3%, sometimes much more. Your rent should increase in tandem, so you do so before it happens.

However, rental pricing is a lot more complex than this. It depends on changes in the local rental market, shifts in supply, and the housing market as a whole. Being too quick on the trigger could lead to the same tenant demand issue as before.

So instead, use the same good judgment you would otherwise use in raising the rent. Inflation will be a factor; that much is true, but not the only one.

You Know Your Property Best

This sort of arrogance can get you in a lot of trouble, especially as a first-time landlord.

Remember, the real estate market is and always will be a sophisticated machine. Take your cues from industry experts and listen to RBO veterans. They've seen this all before, so their advice will be invaluable.

Manage With PMI Bridgetown

Rental valuation is tricky, especially with the housing market perennially in flux. Still, there are several persistent myths you should disabuse yourself of. Things like setting rental prices as you please, changing them when you please, or doing so in anticipation of inflation.

PMI Bridgetown in Portland, OR, has a combined 25+ years of experience in property management. We handle it all so you don't have to. Start things off with our free rental valuation.