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Is buying a condominium in downtown Portland a good investment?

I have heard different stories on if it is a good investment to buy a condominium. I am single and think it would be a good place for me to live.
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August 03 2012 - Portland
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Best Answer
Can condos be a good investment? Sure they can, but timing is everything! If you bought a condo in '05 or '06... sure you would have been better off renting. I think it is important to look at this in two ways: 1) You are looking at a purchase as a place to live or 2) As an investment, possibly as an income property. If you are looking at a purchase as an income producing property, be careful! Taxes and HOA fees on top of your monthly mortgage may not produce the cash flow you were hoping for. Currently, with rentals in high demand and rents going at a premium, you may be able to get a positive cash flow. That could disappear though if and when rental rates drop in the future.
To say that you would have been better off purchasing a home is not entirely accurate. I know many people who have lost alot of money making a purchase of a home. Again, it comes down to timing and buying the property at the right price.

If you are buying a condo as your place of residence here are a few things to think about. Try to get away from the mindset that it is all about the investment! It should be more about living an enjoyable lifestyle and coming home to a place that offers you peace of mind. Sure, you want to make a great investment when you buy, and most feel we are closing in on a market bottom so now is a great time to buy. Combine that with amazing interest rates, and a longer term investment outlook (5 years +) and you should do just fine. There are no new condo buildings in the works and there may not be for sometime as developers will have difficulty in getting construction loans. All positive for those making a condo purchase in the near future. Not sure if you have an agent or not but I would suggest working with someone, like myself,  who specializes in working with condos and lofts. Again, from an investment standpoint, you want to buy at the right price.
The final thing to look at are other investments. Do I think the purchase of a condo in this market will yield you a better return than CD's and Money Market accounts? Absolutely. How are you other investments...stocks etc? Much like the stock market, people were buying homes in '05 and '06 with much euphorie...(and little bit of greed) many are now tainted in looking at real estate as an investment. Your timing may or may not be perfect, but I think it is very close!

Best of luck!
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August 04 2012
I believe so. There are some great answers here already, but I'd venture to say condos are often the last properties to recover and the first to decline depending on the market. Most of the condos in downtown PDX have resolved their HOA issues by now and are truly fantastic places to live. The market is picking up!
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August 14 2012
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Your question mentioned investment, but if lifestyle is more important to you, then as long as you can afford it you can focus on that. Good luck in your house hunt.
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August 07 2012
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I guess in the end, the lifestyle is what is important to me. Investment is always important, but being happy trumps all! Thank you William and Brad. Your comments helped me realize what is most important.
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August 07 2012
It may or may not be a good investment if you're an investor. If you're looking for a place to live, that's different. People live in downtown Portland for a variety of reasons, and they love living there, by and large.

If you plan on living there a long time--say, five years, you might get your money back. Some of the downtown neighborhoods are holding their values, and some are not. Zillow's rent-vs.buy data may be of use as a starting point.

Long story short: As an active investor/developer for more than 35 years and a licensed broker for six, I never, ever recommend buying a home as an investment and cringe when I hear other brokers do it. Real estate investment is for pros. Home ownership is for people who want to live in a place they love and lead the life they want.
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August 04 2012
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Portland was trendy during the bubble and condos were overbuilt. The price trend is still dropping slowing in many condo/mutlifamily areas. Do your research, compare the costs of buying vs renting and then be realistic about how long an urban professional lifestyle will fit you.

I had a sibling and several friends who lived in downtown PDX. They all enjoyed it, but none made money on their condo purchases there in the end and would have been better off renting or buying a house that was more flexible once they started their families.
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August 03 2012
 
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