Portland Triplex Case Study | 2014 Portland Real Estate Market Report

Portland Triplex Case Study 

To illustrate the value of investing in real estate I’m going to share a story of a triplex I own in North Portland. I’m also including the actual APOD [Annual Property Operating Data] Please note that the APOD is from 2012 and I have since increased rents and repairs and taxes are now lower. I bought this property from a bank at the bottom of the market for $235,000 with broken windows, graffiti and more! I expected it to cost $25,000 to repair but costs were closer to $60,000. Work was completed right before Thanksgiving and lease up took three months with rents being lower than expected due to the slowness of the season. Even though it cost more to repair, took longer to get ready, and rented for less than expected it still makes money. Currently after all expenses are paid it makes about $1,000 a month net. I have a $198,000 loan at 4.25% so I have an actual investment of roughly $90,000 in the property which is worth around $300,000 today.

I am projecting this property will yield 8.65% per year which is hard to beat when considering the tax advantages of real estate.

In 30 years if property keeps appreciating at 3% a year the triplex will be worth $728,000. The tenants will also have paid off the loan completely by that point.

$12,000 a year in net rents will be a total of $360,000 in 30 years assuming expenses go up at the same rate as rent but in reality rents will outpace expenses. In 30 years my $90,000 investment will yield $1,088,000 which is 8.65% compounding. This also assumes I don’t reinvest any of the $360,000 in rental income which will be enough to buy another property in 8 years, and again in 10 years after that.

To download and view the entire 2014 Portland Real Estate Market Report, click here.