Want to get in on the Portland ADU boom? Here’s what you need to know!
More and more people are discovering that Portland is a great vacation destination and an even better place to call home! However, the City’s urban growth boundary and the desire of more residents to live in the “closer-in” neighborhoods have created the need for more housing in condensed areas. Homeowners and builders have turned to in-filling to accommodate these housing solutions. An ADU (Accessory Dwelling Unit) is one way to reduce Portland’s housing shortage, and homes that have been remodeled to include an ADU are selling like hotcakes!
ADU’s can be rented out to provide additional income for the homeowner and this is the primary attraction for most conversions or new additions. There are many ways of adding an ADU to your property. Some homeowners convert a detached garage, finish a basement or loft area or add in a mini-home onto their lot. Many ADU’s blend in with the existing home and may not be noticeable as rentals at all.
Another popular trend in Portland right now is to rent out an ADU or a portion of a home on a more temporary basis. Airbnb.com is a web service that connects vacationers with homeowners who have extra room to rent on a nightly or weekly basis at pre-set fees. Airbnb’s compete with the hotel industry but are more similar to bed & breakfasts. People who stay in Airbnb’s tend to get a better feel for everyday neighborhood living in the area in which they’re staying. And this could be a valuable experience for someone who is considering purchasing a home in a particular neighborhood.
Airbnb.com is a form of social media for travelers. Reviews of the homes and miniature profiles of the hosts are included on the site to give travelers an opportunity to get to know the hosts better before meeting them in person. The website is extremely user friendly and has proven to be a very lucrative business for many of the hosts who list their properties for rent here. There are currently around 1100 homeowners in Portland advertising their homes on the Airbnb.com website. Most Airbnb’s in Portland rent for $65-$95 per night. So if a space is rented out for even half of each month, this can really help to defray the host’s mortgage payments!
The operational headquarters of Airbnb are now located in Portland, (originally a San Francisco start-up), and this has caused a lot of ill-will with the hoteliers who have lost business as a result of this growing industry. The City is also troubled by the issue of Airbnb’s because very few of the hosts have actually gone through the lengthy land-use process to legitimize their accommodations, or paid the thousands of dollars in permitting fees that would have been required of a traditional business. In addition, the City loses money from the lodging taxes that hotels have to pony up.
Sharing sites such as Airbnb.com have risen to popularity quickly nationwide and the trend doesn’t appear to be losing steam. Thus, the City of Portland is looking for ways to ease restrictions on these short term rentals and thus help hosts to “come out of the shadows” with their income properties. Homeowners are currently allowed to rent one to two bedrooms in their homes for less than 30 days at a time if their space has undergone a safety inspection with the City and the host has paid a $180 fee, due every 2 years. This fee allows the city to collect a registry of hosts offering lodging. The City’s Bureau of Development Services performs simple inspections to make sure the dwellings have inter-connected smoke detectors, and that bedrooms meet building codes existing at the time a house was constructed.
In addition, hosts are required to live in a portion of the premises at least 6 months out of every year to qualify as a legitimate Airbnb site with the City. These rules extend to those who rent or own houses, as well as owners or renters of duplexes and self-contained manufactured homes. Those living in apartments, condos and most manufactured home parks are not covered by the new regulations. Hosts renting out three or more bedrooms still must meet the stiffer bed and breakfast rules, which include a $4,130 fee and jumping through many more regulatory hoops. The City has also proposed rules that will require an Airbnb host to notify neighbors on all sides of their property that they plan to become hosts. However, those hosts do have a right to rent out one to two bedrooms, and complaints from neighbors could not prevent them from doing so if they operate under City guidelines.
On March 24, 2015, the Portland Tribune published some interesting findings from an Airbnb commissioned study of its Portland operations over the last year, and found:
• There were 1,120 local hosts
• There were 48,040 local guests
• 33,000 Portlanders used Airbnb to stay elsewhere while traveling
• 45 percent of local hosts are self-employed, freelancers or part-time workers
• 84 percent of local hosts rent out their primary residence
• 40 percent of local hosts have total incomes below $50,900/year (Portland’s median household income)
• Hosts earn an average $6,860 a year through Airbnb
• Hosts rent out their places an average of 86 nights a year
• 43 percent of renters were first-time Portland visitors
• Visitors spent an average of $815 while here, and stayed an average of 3.9 nights
So does converting a part of your home to an ADU or an Airbnb space make sense for you? And are you interested in purchasing a property that already contains a suitable area for this purpose? If you’ve answered Yes to either of these questions, then I can help you with your purchase! Email me today and ask for a list of available homes with this feature. I look forward to assisting with your purchase!