You may have noticed that a lot more rules and regulations are coming down the pipeline in multiple cities and states. In the Portland metro area, there are some increased laws and regulations that we have seen investors and rental property owners stumble over.
Today, we’re focusing on the rental property laws you need to know in Portland. It’s easy to make an expensive mistake, so make sure you’re aware of the requirements and the upcoming changes that may have an impact on you.
Day-to-Day Laws are as Important as Rent Control Laws
Portland, Oregon is getting a lot of attention for some of the bigger legal items like rent control and no-cause evictions. These issues are often talked about, and there’s a lot of publicity about what it means for you and your investment property and your residents. What many investors don’t realize is that there’s also a lot of regulation for the day-to-day requirements of managing a Portland rental property.
For example, take something as simple as a rent increase.
Now, current laws require you to provide at least 90 days of notice. On the rent increase form, landlords are required to list the existing rent, the new rent, the difference, and also the percentage of the increase.
There also has to be certain language on there that educates people and provides certain websites to go to for resources. There’s also a three-page document that educates your residents on the new relocation law. You are looking at a simple rent increase that is so thick that you will actually have to put two stamps on the envelope just to mail it out.
There is just a lot of information that you’re now required to share with your residents.
The extra administrative work is time-consuming and requires a lot of attention to detail. But, the main thing to consider here is that you have to careful and complete. As an investor, if you miss a step and you forget to include the amount of the rental increase, that increase will be thrown out by the courts, and you can also be sued by your resident’s attorney for relocation costs, three months of rent, and attorney fees. You don’t even have to be negligent; a simple administrative error can lead you to a lawsuit for between $10,000 and $15,000. There is no winning. The laws and regulations are clear and either you follow them or you don’t.
Use an Attorney or a Portland Property Management Company
Plenty of organizations and advocacy groups out there help residents, but are there companies out there to help the landlord?
These are pretty detailed processes, and it’s hard for rental property owners to know what they’re required to do on their own.
Steve managed his own rental properties for a long time after he began investing 20 years ago, but self-management is nearly impossible now. It’s become too risky. You really need some outside expertise, whether it’s a real estate attorney or a very good Portland property management firm. That is what property managers do. We have established systems and business practices, and we maintain the day-to-day knowledge that’s required to keep your property in compliance.
With all the changes and new laws arriving every year, real estate investors are in danger of setting themselves up for failure if they try to rent out a property on their own. You have to treat your investment properties like businesses, and that means surrounding yourself with qualified professionals.
As we have discussed, there are so many loopholes that invite mistakes, even if you’re an experienced investor. You might have the perception that you’re saving money by not hiring a property management company or an attorney, but think about what you would lose if you did make a mistake. At this point, it’s almost inevitable because things are so complicated. You’d lose a lot more in court than you will lose paying for professional property management.
This is not an exaggeration.
The laws have been tilted so heavily in favor of the residents you’re renting to that there’s a large stick on the property owners in Portland. Politicians may have good intentions and think they’re leveling the playing field. But, they’ve actually made things very risky for rental property owners. With things becoming more regulated, you have to adapt.
Investing in Portland Real Estate Still Makes Sense
Ultimately, it makes good financial sense to own real estate, but you have to deal with these kinds of situations when you’re renting out that real estate. There are enough landlords who aren’t doing what they’re supposed to be doing that some of these laws are over-correcting some situations. The challenge falls on good landlords and investors to keep up.
Think about who is running your business. If you’d like to talk about how we can help you, please contact us at Mynd Property Management. We work with Portland rental property owners to ensure they’re compliant with all these laws and one step ahead of any new laws that may be coming around the corner. We have a lot of resources, we have a lot of legal expertise, and we’re managing properties in Portland for a long time, so we understand the market trends and the demands and needs of residents. These new laws and regulations are difficult, but we know how to navigate around them.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.