With vacancy rates for Bend rental homes hovering around 3.5% and home prices at ten year lows and interest rates at historic lows, the time is right for investors to pick inexpensive properties. The low vacancy rates are not likely to change anytime soon, many people have given up the fight to keep their mortgaged homes and have been forced out into the rental market to fulfill their housing needs. Those who have lost the battle to keep their home now face having their credit severely damaged for at least two years possibly longer, making purchasing a home all but impossible for the next few years. This scenario should keep the rental market strong for many years to come.
For those folks with the means and capital reserves now may be the time to take advantage of today’s market conditions. Currently there are 25 homes listed in the Bend market under $140,000 that are not short sales, nine of these homes were built in the year 2000 or after. Many renters are looking for modern comfortable homes that are easy to live in and do not require a large commitment for upkeep.
A good example is a three bedroom home with one and a half bathrooms built in 2007 currently listed at $132,900. With a 25% down payment and an investor’s mortgage interest rate of around 5.5% rate, an investor would be paying approximately $770 a month for principal, interest, taxes and insurance. A quick survey of Craigslist would show that a home of this caliber should fetch a monthly rental of approximately $950-$1250. This would put you on the path to having a positive cash flow.
Positive cash flow is just one benefit of a rental property, not to be over looked are the tax benefits of owning a rental property. Check with your accountant for how a rental property could best work for easing your tax burden. Currently the near term outlook for appreciation on a rental property is unlikely the long term prospects for Bend are good. Those who took advantage of the real estate downturn in the eighties to buy rental properties are still chuckling today.
Those who are skeptical of the Bend market should remember that all of the qualities that made Bend popular a few years ago are still here, it just that a few of our warts are now more apparent. People will still want to move to Bend because of its proximity to outdoor recreation, dry climate, great beer and easy life style. Bend will never be an employment Mecca but for those who are determined there is always a way to make the lifestyle work. Maybe owning rental properties will be part of your portfolio for successful Bend living.
Brother Jon's - Breakfast - Bend Oregon
14 years ago
To a realtor, buying any property "makes sense." Now go back to where you came from. Oh, and tell Kitty hi.
ReplyDeleteGreetings to Anonymous,
ReplyDeleteActually it makes sense to more folks than just realtors. I presume that is why many of our clients this summer have been looking for just the same properties I described in this blog.
Many of our investors are from out of the Central Oregon area but most of them have watched our market for some time waiting for values and market conditions like those that we are now experiencing.
Purchasing property in Central Oregon now presents many of the same opportunities that the early to mid eighties presented to our area. I can name numerous people who benefited from purchasing when others doubted their wisdom.
If buying now does not make sense to you now let me know when it does and I would be glad to be of assistance in helping you pick a property you deem suitable.
BP
P.S. I would be glad to pass along your greetings to Kitty Warner but I doubt she would recognize you from your anonymous moniker.