Are you curious about the local Southern Oregon real estate market and want to learn how to make smart investment decisions here, rather than in far-off places like New York, Los Angeles, or Texas? This comprehensive guide is designed to give you current, local insights that will empower you whether you're buying, selling, or considering relocating to Southern Oregon. Real estate investing is one of the most powerful ways to build wealth, and in this article, you’ll discover why so many millionaires and billionaires make real estate a cornerstone of their portfolios.

My name is Brian Simmons, a licensed real estate agent with eXp Realty here in Southern Oregon, and I’m excited to share with you the secrets and strategies that can help you succeed in this thriving market. Let’s dive into The Ultimate Guide to Investing in Southern Oregon Real Estate and uncover the reasons why real estate is such a favored investment for the rich, and why Southern Oregon is an exceptional place to invest.

Table of Contents

• Why the Rich Invest in Real Estate
• Is Southern Oregon Real Estate a Good Investment?
• Current Market Overview: Southern Oregon Real Estate Data
• Getting Started with Southern Oregon Real Estate Investing
• Conclusion
• FAQs About The Ultimate Guide to Investing in Southern Oregon Real Estate

Why the Rich Invest in Real Estate

Did you know that approximately 90% of millionaires attribute part of their wealth to real estate holdings? This is a widely accepted statistic that traces back to a famous quote by Andrew Carnegie in the late 1800s. Carnegie, who made his fortune in the steel industry, stated:

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in any and all industrial investments combined, and the wise young man or wage earner of today earns his money in real estate or invests his money in real estate.”

While some parts of this quote might feel a bit dated, especially considering today’s diverse investment options, the core truth remains: real estate is a reliable and powerful wealth-building vehicle. Think about it—how many wealthy people do you know who don’t own some form of real estate? The answer is very few.

1. Real Estate Appreciation

One of the biggest advantages of investing in real estate is appreciation. Historically, real estate appreciates at an average rate of 6-8% annually in the United States. This steady growth provides a reliable, long-term increase in the value of your investment.

Moreover, real estate’s relative stability helps balance out the volatility of other investment types, such as stocks, cryptocurrencies, collectibles like art or trading cards, and classic cars. The U.S. real estate market is considered one of the most consistent and steady markets worldwide, attracting investors globally for that very reason.

2. Leverage: Amplifying Your Investment

Leverage is a game-changer in real estate investing. When you use a mortgage, you can control a much larger asset with a relatively small down payment. For example, you could buy a $500,000 home with as little as 3-5% down, or even zero down if you qualify for a USDA loan.

Here’s why leverage matters: your return is based on the total value of the property, not just your down payment. If a $500,000 property appreciates by 7% in one year, that’s a $35,000 increase. If you only put 5% down ($25,000), you’ve made $35,000 on a $25,000 investment. Compare that to investing the same $25,000 in the stock market with a 7% return, which would yield only $1,750.

This leverage effect is a key reason why wealthy investors focus heavily on real estate.

3. Cash Flow: Passive Income from Rentals

Another compelling reason to invest in real estate is cash flow. Rental properties can generate steady monthly income regardless of whether the market is appreciating, stable, or declining.

For example, if you collect $2,000 per month in rent and your mortgage plus taxes and insurance total $1,700, you’re left with $300 in positive cash flow each month. Over a year, that’s $3,600 in passive income on top of any appreciation gains.

Increasing your down payment reduces your mortgage and increases your cash flow, creating a sustainable income stream that can supplement or even replace your regular earnings.

4. Diversification: Protecting Your Portfolio

Diversification is an essential investment principle: don’t put all your eggs in one basket. Real estate generally has a low correlation with the stock market. That means if the stock market crashes, real estate doesn’t necessarily follow suit.

Having real estate as part of your investment portfolio helps reduce overall risk and smooth out returns, making it a smart choice for both wealthy investors and beginners alike.

5. House Hacking: Live for Free or Low Cost

House hacking is a creative strategy popularized by Robert Kiyosaki in his book Rich Dad Poor Dad. It involves buying a multi-family home, such as a duplex, living in one unit, and renting out the others. This way, rental income covers most or all of your housing expenses.

You can also house hack by buying a single-family home and renting out spare bedrooms to roommates or friends. This helps you pay down your mortgage while building equity in your home.

6. Long-Term Benefits: Building Wealth Over Time

Buying a home in your 20s or 30s and making steady mortgage payments can lead to owning a mortgage-free property by retirement. Once paid off, renting out that property creates a significant source of passive income.

For example, renting out a property for $2,500 per month provides income equivalent to having $1 million in the bank earning 3% annually. This long-term wealth-building strategy offers financial security and freedom in retirement.

7. Tax Benefits: Saving Money with Deductions

Real estate investors enjoy various tax benefits, such as deductions for property taxes, mortgage interest, operating expenses, and depreciation. These deductions reduce your overall tax liability and increase your net returns.

While I’m not a CPA and this isn’t tax advice, many investors hire knowledgeable accountants who help them maximize these tax advantages, often saving more money than the accountant’s fee.

8. Hedge Against Inflation

Inflation erodes the purchasing power of cash and fixed-income investments like bonds. Real estate, however, tends to keep pace with or exceed inflation because rents and home prices usually increase as the cost of living rises.

For example, during the high inflation periods in 2021 and 2022, home prices and rents adjusted upward, preserving and growing the real value of real estate investments.

Is Southern Oregon Real Estate a Good Investment?

Now that you understand why real estate is a favored investment for the wealthy, let’s focus on Southern Oregon specifically. Is this market worth your investment dollars?

The answer lies in the basic principle of supply and demand:

• Low Supply: Southern Oregon has experienced decades of limited new development, resulting in a constrained housing supply.
• High Demand: Attracted by the region’s beautiful climate, lower cost of living, and abundance of recreational activities, people from out of state have been moving here steadily for years.

This combination of low supply and high demand drives strong appreciation in home values, often outpacing the national average.

For example, from 2020 through the end of Q3 2023, the national average home appreciation was about 31%. Meanwhile, Jackson and Josephine counties in Southern Oregon saw an impressive 38% increase in home values during the same period.

With population growth expected to continue and development remaining insufficient, Southern Oregon’s real estate market looks favorable for investors seeking long-term gains.

Investment Opportunities Beyond Single-Family Homes

While single-family homes are a popular entry point, Southern Oregon also offers abundant opportunities in:

• Multi-family properties
• Apartments
• Commercial real estate
• Warehouse and industrial spaces

These sectors provide diverse avenues for investors to build wealth and generate cash flow in the region’s growing economy.

Current Market Overview: Southern Oregon Real Estate Data

Let’s take a quick look at the most recent data for single-family residential homes in Jackson and Josephine counties as of January 24th:

• Active listings: 897 homes
• New listings last week: 76
• Price changes: 79
• Homes back on the market: 29
• Pending sales: 72
• Closed sales: 50
• Expired, withdrawn, or canceled listings: 28

There is typically a 30-45 day escrow period between a home going pending and closing. Because of this lag, the inventory number is expected to drop in the coming weeks as pending sales close and are removed from active inventory.

Staying informed about these trends can help you time your investments and make better decisions in this dynamic market.

Getting Started with Southern Oregon Real Estate Investing

If you’re ready to explore investing in Southern Oregon real estate, whether it’s your first home or your next rental property, it’s never too early to start planning. Even if your goal is a year or two down the road, beginning the conversation early can set you on the right path.

Working with a knowledgeable local agent who understands the nuances of the Southern Oregon market can make all the difference. From identifying the best neighborhoods to navigating financing options like USDA loans, expert guidance will help you maximize your investment potential.

Conclusion

Real estate investing continues to be a proven strategy for building wealth, offering benefits such as steady appreciation, leverage, cash flow, diversification, long-term security, tax advantages, and protection against inflation. Southern Oregon, with its unique combination of low supply and high demand, presents an excellent opportunity for investors looking to capitalize on these benefits in a growing and vibrant market.

Remember, the key to success is informed decision-making and strategic planning. Whether you’re interested in single-family homes, multi-family units, or commercial properties, Southern Oregon has something to offer. Take the first step today and explore how real estate investing can work for you.

Feel free to reach out for personalized advice and market insights to help you make the best moves in Southern Oregon real estate. You can call or text me at 541-954-7758 and also you can also visit www.buyingsouthernoregon.com  for more info!

VIEW HOMES FOR SALE IN SOUTHERN OREGON

FAQs About The Ultimate Guide to Investing in Southern Oregon Real Estate

Why do most millionaires invest in real estate?

About 90% of millionaires attribute part of their wealth to real estate because it offers steady appreciation, leverage opportunities, cash flow through rentals, tax benefits, and serves as a hedge against inflation.

What is leverage in real estate investing?

Leverage means using borrowed money, like a mortgage, to control a larger asset with a smaller initial investment. This amplifies your returns because gains are based on the total property value, not just your down payment.

What makes Southern Oregon a good market for real estate investing?

Southern Oregon has low housing supply due to limited development and high demand from people moving in for its climate, lifestyle, and affordability. This drives strong home appreciation and rental demand.

What is house hacking?

House hacking is a strategy where you live in one part of a property (like a duplex or a multi-bedroom home) and rent out the other parts to cover your housing costs, effectively living rent-free or at a reduced cost.

How can I benefit from tax deductions as a real estate investor?

Real estate investors may deduct expenses such as property taxes, mortgage interest, insurance, and maintenance costs, which reduce taxable income and increase net returns. Consulting with a CPA can help maximize these benefits.

 How do I get started investing in Southern Oregon real estate?

Start by researching the local market, identifying your investment goals, and connecting with a knowledgeable local real estate agent who can guide you through financing options, property selection, and the buying process.