North Bend, Oregon

Located along the southern coast of Oregon, North Bend is an area characterized by its rich natural beauty, proximity to the Pacific Ocean, and a hospitable climate. Known for its outdoor activities, including hiking and fishing, North Bend attracts both tourists and outdoor enthusiasts year-round. The real estate landscape in this region has shifted notably as interest in short-term rentals (STRs) has grown, a trend propelled by factors such as an increase in domestic travel and the popularity of platforms like Airbnb and VRBO.

The current average daily rate (ADR) for short-term rentals in North Bend is notably positioned at $226.83. This figure highlights the potential for revenue generation within this market but also underscores the importance of understanding the broader economic dynamics and consumer behaviors that may influence investment success.

When evaluating the potential of the short-term rental market in North Bend, several key performance indicators provide insight into its health and viability:

1. Average Daily Rate (ADR): At $226.83, North Bend's average daily rate is competitive compared to similar markets, suggesting that property owners can expect reasonable income from their investments.

2. Occupancy Rate: Historical data has shown occupancy rates around 68%. This is a strong indicator of demand, reflecting both seasonal fluctuations and consistent guest interest.

3. Revenue Per Available Room (RevPAR): With the ADR and occupancy rate factored in, the RevPAR comes out at approximately $154.64. This metric is critical for understanding overall profitability in the STR market.

4. Market Growth Rate: The STR market has seen approximately 10% growth in recent years, following broader national trends in travel and tourism.

5. Average Length of Stay: Guests tend to stay an average of 3.1 nights, which can influence pricing strategies and availability.

Over the last decade, North Bend has experienced significant changes in its tourism landscape, correlated with broader economic shifts. The advent of the digital economy and platforms facilitating short-term bookings has reshaped how travelers access accommodations. Historical data shows the following trends:

• Increase in Supply: The number of available STR properties has risen by approximately 75%, paving the way for a competitive marketplace. This surge in supply has been strong but still manageable, suggesting balanced demand.

• Rental Income Growth: The average rental income per property has steadily increased, reflecting a burgeoning interest in unique, localized experiences. From 2013 to 2023, rental income growth has averaged about 12% annually.

• Tourism Growth: Increased promotional efforts by local tourism boards and economic development initiatives have led to a notable uptick in tourists visiting the area. Total tourist visits have grown by roughly 30% over the last decade, further buoyed by adjacent attractions like the Oregon Dunes National Recreation Area.

While growth trends have been substantial, the market isn’t without its challenges. Fluctuations in market dynamics, including economic shifts and changing traveler preferences, may affect future performance.

The investment potential in North Bend’s short-term rental market remains promising for various reasons:

• Cap Rate: The capitalization rates in this area generally range from 5% to 8%, dependent on the property's location, type, and quality. A healthy cap rate indicates that returns on investment are competitive, and investors can feel confident about the income potential.

• Expense Management: Property management costs average around 18% of gross revenue, which is relatively standard for short-term rental markets. Keeping operational costs in check can greatly influence ROI.

• Market Demand: Given the established tourism patterns and continued attractions to North Bend's natural scenery, the overarching demand for accommodations is likely to remain supported.

• Long-term Appreciation: While STRs primarily cater to short-term stays, property owners can benefit from long-term appreciation, especially in a market that has demonstrated resilience amid economic fluctuations.

Understanding seasonal variations is key for any short-term rental investor in North Bend. The area's tourism is heavily influenced by the weather and local events:

• Peak Season (May to September): The summer months attract the highest number of tourists, particularly families and outdoor enthusiasts. During this period, occupancy rates can reach upwards of 80% to 90%, with ADR also peaking.

• Shoulder Season (March to April, October to November): The early spring and fall months see moderate visitor numbers, driven by mild weather conditions and a range of cultural events. Occupancy tends to hold steady between 60% and 70%.

• Off-Peak Season (December to February): Winter months typically see lower tourism rates, with occupancy falling to about 50%. However, holiday periods during December can offset some of these renewals as families seek winter retreats.

To maximize revenue, property owners should consider adjusting pricing strategies seasonally, emphasizing marketing efforts during peak and shoulder seasons.

Variations in performance among different types of properties can significantly influence investment strategies. Here’s a breakdown of property types currently available in North Bend:

• Single-Family Homes: These properties often cater to families and larger groups, and they generally have higher occupancy rates due to their capacity to accommodate multiple guests. The average ADR for single-family homes is approximately $240.

• Condos and Townhouses: These properties typically attract couples or small groups looking for a lower price point but still seeking amenities. The ADR for condos generally sits around $200, making them a popular choice among budget-conscious travelers.

• Luxury Rentals: High-end properties provide unique offerings and can command premium pricing, with ADPs reaching upwards of $300. These properties often attract affluent tourists seeking exclusive experiences.

Analyzing property types in the North Bend market suggests that diversification within a rental portfolio could cater to broader consumer preferences and maximize potential income.

Recent guest reviews and surveys reveal critical insights into traveler preferences when choosing rental properties, with several common attributes:

• Proximity to Attractions: Guests favor locations that are conveniently situated close to natural attractions, shops, and dining options.

• Outdoor Spaces: Many short-term rental seekers are looking for outdoor amenities, such as decks, patios, and gardens, which enhance their connection to the coastal landscape.

• Family-Friendly Features: Families often seek properties with multiple bedrooms, kid-friendly amenities, and access to recreational activities.

• Pet Policies: North Bend is a pet-friendly area, and properties that accommodate pets tend to attract higher demand.

In response to these preferences, property owners should consider investing in amenities that will enhance guest experiences and draw bookings.

The regulatory landscape surrounding short-term rentals can significantly impact market dynamics. As of October 2023, North Bend has implemented specific regulations focused on maintaining community integrity. Here are key points:

• Licensing: Property owners are required to obtain a short-term rental license, ensuring compliance with city regulations, including safety and zoning laws.

• Taxation: STRs are subject to a Transient Lodging Tax (TLT), which can range around 10% of rental income. Awareness of this tax and including it in pricing strategies is crucial for profitability.

• Limits on Rentals: There may be restrictions on the number of days a property can be rented out short-term if it's a primary residence. This regulation can limit the potential for income generation for non-owner-occupied properties.

Investors should remain vigilant regarding ongoing regulatory changes that could impact their operations and financial returns.

North Bend is a community composed of several neighborhoods, each presenting unique opportunities and challenges for short-term rentals:

• Downtown North Bend: This area offers a blend of urban amenities and proximity to local attractions. Properties here tend to achieve higher occupancy rates due to their accessibility to shopping, dining, and entertainment venues.

• Harbor Area: Known for its waterfront views and recreational outlet, properties in the harbor area often appeal to tourists seeking outdoor activities. This neighborhood typically commands higher ADR due to views and greater demand.

• Old Town: Characterized by historic charm, Old Town attracts visitors interested in cultural experiences. While this area may experience slightly lower occupancy rates, the unique charm can justify higher pricing.

Understanding neighborhood dynamics will assist investors in selecting properties that align with market demand, maximizing both occupancy and rates.

Looking ahead, several trends will likely shape the STR market in North Bend:

• Sustainability: Increasingly, travelers are becoming environmentally conscious. Properties that adopt sustainable practices could see rising demand. Investors may wish to explore eco-friendly building options and amenities.

• Technology Integration: Smart home technology can enhance guest experiences while allowing for remote property management. Investing in tech-savvy solutions could improve operational efficiency and attract tech-savvy guests.

• Remote Work: The rise in remote work opportunities has led to longer stays, with guests seeking leisure combined with work. This trend can open new markets for models catering to extended stays.

In summary, North Bend’s short-term rental market presents significant opportunities for investors who approach the market with an understanding of its inherent patterns and trends. By leveraging data, adapting to consumer demands, and maintaining compliance with regulatory structures, investors can achieve favorable returns while contributing positively to the local economy.

What is the average daily rate (ADR) in North Bend for short-term rentals?
Current data indicates the ADR in North Bend is $226.83.

What is the average occupancy rate for STRs in North Bend?
The occupancy rate is approximately 68%, reflecting consistent demand throughout the year.

Are there regulations for short-term rentals in North Bend?
Yes, property owners must obtain a short-term rental license, comply with safety regulations, and adhere to local taxes.

What types of properties perform best in the STR market?
Single-family homes and luxury rentals typically perform well, but condos and townhouses have their appeal, especially among smaller groups and budget-conscious travelers.

How can I increase the revenue from my short-term rental in North Bend?
Consider adjusting pricing seasonally, enhancing guest amenities, and ensuring high visibility through effective marketing.

This comprehensive market analysis should equip prospective short-term rental investors in North Bend with the knowledge necessary to navigate the landscape effectively and leverage its growing potential.