If you are small time landlord in Portland, OR with long term tenants you are losing your shirt. With interest rates at an all time high everything is getting more expensive the rental income you had is worth less with each passing month. Consider this, the current mortgage rate for a $500,000 home is nearly $3500 per month. Woof!
Take a look at your house. How much can you get for it if you sell today? I bet it is pretty close to $500,000. $3500 per month is the new normal. Are you getting that much? If you are charging $2500 or less in Portland, Oregon with a long term tenant you have a long road ahead of you to bring your rate in line with current monthly rates.
That’s bad news for anyone counting on their rental income in retirement. If you are not earning market rate for monthly mortgage payments you are falling behind on interest rates and your retirement is taking a hit. In Portland, OR you are limited to how much you can increase your rent year over year. Currently that number is 10%. That means if you charge $2500 per month this year you can only increase rent to $2750 per month next year. It will take two years at the current legal rate increase to get to $3000 per month and it will take four years to match the current monthly mortgage rate of a $500,000 home.
Are you willing to wait four years? Can you afford to wait? If you have owned a rental in Portland for two years or more you are four years behind.
You need to fight your way through this one. You are in the best position if you can afford some form of down payment for a new property. If you can arrange a contingency sale and buy outside of Portland, OR you can bite through the rate lock-in and clamp down on inflation.
