Real Estate Archives - Preferred Residential

919 NW Bond Street #302

The Pinnacle of Living Downtown Bend, Oregon

top shelf living in downtown Bend The pinnacle of top shelf living, located in the heart of downtown Bend, Oregon.

Inside this stunning 2500+ square foot condo, you will be greeted by natural light and a high degree of craftsmanship. The open floorplan and floor to ceiling windows give an added sense of space while still maintaining your privacy.

This spacious condo has three en-suites. The main suite includes a gas fireplace, soaking tub, a tiled walk in shower with glass surround, dual vanity, walk in closet and exquisite wood cabinetry. The other two en-suites include brand new hardwood flooring, tiled walk in showers with glass surrounds plus walk in closets. All three en-suites include a sliding door to the outdoor living space.

The hardwood floors in the living space have been refinished since the unit was last occupied. The living room features a gas fireplace, reading nook and a wet bar. The kitchen boasts top of the line appliances such as a 20 cubic foot Viking refrigerator, a built-in Viking oven and a six burner Viking gas range. The real showcase of the kitchen however is the 17 foot long, leathered granite counter top.

Outside, on the spacious, tiled deck is a built in gas grill and plenty of room for entertaining. For even more outdoor living and entertaining space this building has a huge roof top deck with 360 degree views which include the Cascade Mountain Range. (keep scrolling to see photos)

This 919 Bond condo is within three blocks of any of the fabulous restaurants and activities that downtown Bend has to offer. Give Becky Seim a call at (541) 797-9575 for a showing. All showings are by appointment only and must be accompanied by Becky. This condo really is at the pinnacle of downtown Bend, Oregon living.

Downtown Bend

Bend's Finest Downtown Living

919 NW Bond Street

Third floor living

Dining and kitchen

Dining

Kitchen

Open floor plan

Living room

Reading nook

Wet bar

Suite 1

Suite 1 bath

Suite 2

Suite 2 bath

Suite 3

Suite 3 bath

Half bath

Laundry room

Panoramic views

Spacious outdoor living

Tiled deck

Wrap around deck

Built in BBQ

Downtown Bend views

Secure elevator

Secure covered parking

Secure storage rooms

Roof Top Entertaining

This roof top space is available to residents of the 919 Bond St. building. Bar-b-que, play cards or just watch the sun set. You even have a great view of Pilot Butte and the Fourth of July fireworks.

Bos Taurus Zydeco 900 Wall J-Dub

How to Limit the Risk of Investing in Real Estate

“No risk, no reward.” That phrase has been applied to everything from play calling in sports to starting a business to investing in real estate. It suggests that if risk is not taken then there will be no reward. That may be true but it does not mean that we have to sit back and accept the risk. When it comes to investing in real estate there are things that can be done to limit exposure to risk and thereby improve chances for an even better reward.

Limit the risk from tenants. Where the property is located and what condition it is in will affect what kind of tenants will be interested in living there. Buy a house that is in a thriving neighborhood, in a good school district and doesn’t look like it has had a hard life for the last 20 years. Before renting to tenants run a credit and background check on them, remembering of course, what the law says about what can and can’t be considered when accepting or denying a tenant. Collect deposits and rent in cash or verifiable funds before allowing them to move in. Letting a tenant move in without the necessary funds can be worse than leaving the house vacant.

Limit the risk that it will require too much of your time. The more time you spend dealing with tenants or making repairs the less time you will have to make money whether it is finding the next real estate deal or keeping your boss happy at work. Hiring a good property manager means someone else will be there to answer tenant phone calls, collect rent, schedule repairs and check on your property.

Limit the risk of costly repairs. Find out as much about the property as possible so that you don’t end up buying something that will drain all of your resources. Buy a home that is less than 50 years old as they are less likely to have structural problems that could cost tens of thousands of dollars to fix. Get a professional inspection of the property before the purchase is final and if there are any questions about any of the systems, such as the furnace, hire a specialist to inspect that. If the problems are more than you are willing to deal with then move on to the next property.

Limit the risk that the property won’t support itself . Research other rentals similar to the rental being purchased to know what the property will realistically rent for. Run the numbers then run them again. If the property won’t at least break even then you should probably keep looking for one that will.

Limit the risk of long vacancies. Buy investment properties in parts of town where people want to live, keep the property in good condition and start advertising as soon as you know the tenants will be moving out.

Limit the risk of losing value. Keep an eye on your investment. Despite all the things they told you about how well they are going to care for your home, your tenants don’t have as much at stake as you do. Drive by the property frequently and inspect the interior of the home at least annually. Protect yourself from real estate market down turn by buying a property for less than market value.

Limit the risk of not being able to sell the property. Real estate is not a liquid investment which means you shouldn’t expect to be able to sell your rental property at the drop of a hat. However, there are some things that can be done to help it sell as quickly as possible. Buying a house in a good neighborhood, close to employment opportunities, in a good school district. The real goal is to buy a house that when it comes time to sell will appeal to the most potential buyers. Not just investors.

Limit the risk of hiring a bad property manager. This also applies to you, the investor/owner as property manager. For those investors wanting to manage their own properties here are some great questions to ask yourself. Should I hire a property manager? If actively managing your rental isn’t for you then here are 8 tips for hiring the best property manager.

Should I Sell Or Rent My Home?

Your current home is the first home you ever purchased but you are ready to move up to something a little more “comfortable” and now you wonder, “Should I sell my home or rent it?” Here are some things to consider when searching for an answer to this question.

Would the listing description for your house be accurate if it said, “Good bones with shag carpet and olive green appliances?” A house that is still stuck in the ’70’s isn’t going to command top dollar in any real estate market. Buyers will likely see the decor and wonder, “If the decor hasn’t been touched in decades what else in the house has been neglected?” Tenants on the other hand can be willing to overlook questionable decor for a good house at a good price. If you don’t have money or desire to invest in new fixtures that are outdated but work perfectly fine then converting your home to a rental might be the way to go.

What are they doing to my home? Tenants won’t feel the same way about your house as you do. Flooring will get stained or scratched, walls will get nicked and dirty, and landscaping will show signs of neglect. If seeing your former home in less than pristine condition is going to cause angst and restless nights then you might be better off selling your home.

They say money isn’t everything. That may be so but when it comes to buying a new home and converting the old one to a rental, money is very important. You will need cash for a down payment on your new home, income (rental and wages) to make two mortgage payments and reserves to cover repairs and improvements for both homes.

The first step in the money equation is to talk to a Realtor® and figure out how much the house you want to buy is going to cost and how much equity you have in the house you already own. This will help you determine how much cash you will need to buy a new home and if some of that cash could come from your current home.

Once the value of your current home has been determined it is time to figure out how much it might rent for. If your Realtor® also happens to own a property management company (Becky Seim, Preferred Residential) then putting a dollar amount on rent will be no problem. Without that resource your best bet is to browse the local property management company websites, classifieds or Craig’s List for similar properties near yours.

Armed with all these numbers you are now ready to talk to your mortgage lender. If the numbers the lender gives back to you suggest that keeping your current home as a rental is going to prevent you from qualifying for a loan for a new home then selling your current home is probably a wise move.

Taxes are money too. You have enough money to afford two mortgage payments and a down payment on a new house but do you know how owning a rental affects your tax bill? Talk to your tax preparer. Know the benefits and drawbacks of converting a home to a rental. will you be able to reduce your taxes or will the positive cash flow from your rental push you into a new tax bracket? What will happen when it comes time to sell the rental? If the tax implications of owning a rental meet with your approval then it is likely a good idea to convert your home to a rental.

Have a plan for property management. You made it this far. Now is NOT the time to think the rental will take care of itself. It won’t. If you plan on managing the property yourself, take the time to honestly answer these questions: Do you have enough time? Do you understand or are you willing to learn local landlord/tenant laws? Are you tough enough to evict a tenant who isn’t paying rent? Even if the tenant really, honest to God, pinky swear, promises to pay next month? Did you Google “what you need to know about becoming a landlord“ and read stories about both the good and bad of being a landlord?

Tight Rental Market in Bend, Oregon Leads to Rising Rents and Few Vacancies

Over the last three years the Bend rental market has shifted dramatically from one with an ample supply of rentals and moderate demand to one with a shrinking supply of rental units and a growing demand for those units. Over that time the vacancy rate in Bend went from a reasonable 5.17% to an unbelievable .66% (yes, two thirds of one percent). *

Things really got rolling in 2012 when the economy in Bend started showing signs of life again. So much of the economy here depends on tourism that when people began travelling more and visiting Central Oregon we saw the unemployment rate start to drop noticeably. That up-tick in jobs and an incredibly low mortgage interest rate gave builders some confidence to start finishing developments that had laid dormant since the real estate bubble burst in 2008. Those builders, of course, needed framers, roofers, masons and carpenters who provided even more spark to the local economy.

That spark led even more people to consider moving to Bend. We haven’t seen any official numbers but it seems as if the number of people moving here is the highest it has been since 2005. Preferred Residential just advertised a home for rent and half of the phone calls and emails we received were from people who are moving here or have already moved here but haven’t been able to find a rental. What is interesting about the people moving here is that they aren’t just from the Northwest. We had prospective tenants call from as far away as Tennessee and Georgia. The large number of people moving to Bend is placing a lot of stress on the shrinking inventory of rental homes.

The number of rental units in Bend is shrinking because many owners are selling their homes to take advantage of rising home prices. Last year we suggested that profit taking could be a factor in 2014 and based on our interactions with prospective tenants it sounds like that is happening in spades. We haven’t kept formal records but if I had to bet, I would say probably two thirds of the people we have talked to about rentals this year are looking for a place because their current rental sold. Another indicator of profit taking by investors can be found in showing instructions for homes for sale. Especially for homes under $300,000.

When prospective tenants call us it is easy to differentiate between people who have just started looking and those who have been looking for a long time. Those who have just started looking have no sense of urgency, don’t have any idea of what is on their credit report and ask for showings that fit their schedules. The conversation with those who have been looking for a long time usually goes something like this: “Is the house still available? Good, where do I apply? Just so you know, I have X and Y on my credit report and my income is 2.3 times the monthly rent. Will that be a problem? No, I don’t need to see the house. I can tell that I like it from the pictures.”

Many renters are getting desperate and who can blame them? It is not unusual to meet people who have been searching for a home for months. Many tell us they feel that finding a rental almost has to become their full time job and they keep missing out on houses because they actually do have a full time job. It has even gotten to the point where there is now a group on Facebook called Bend Housing and Rental Relief Support Group.

*Vacancy rates and rent prices are based on the annual surveys of members of the Central Oregon Rental Owners Association.

Home Buyers: Don't Sabotage Your Deal

Buyer beware! We have all heard that phrase so many times that it has become second nature to be wary of someone selling something. It is good advice for sure but home buyers should also beware of ways they can sabotage their purchase of a house. It is easier than one might think as some overzealous home buyers recently reminded us.

Problem: The home being purchased is a rental with tenants in place. That means 24 hour notice is required to gain access to the home. Within a week of the deal being in contract the buyers were making life difficult for the tenants, dropping by unannounced and expecting to be given access to the home without a 24 hour notice on more than one occasion. These unannounced visits quickly turned the tenants and to a lesser extent, the seller, against the buyers.

Buyer beware: When tenants are renting a home 24 hour notice of intent to enter the home is required. There is no getting around it unless the tenants say otherwise. In our experience, tenants are seldom willing to waive the 24 hour notice when the house they are renting is being sold and will require that they move. A wise move for buyers in this situation is to make every effort to work with the tenants. Angry tenants can make a transaction much more difficult than it needs to be.

Problem: There are nice, new flower beds in the back yard that the buyers really liked. The buyers told the tenants that they had to leave those planter boxes in the back yard when they moved out. The contract clearly states that tenants’ personal property is not included in the transaction.

Buyer beware: Before writing an offer, buyers should be sure they understand what belongs to the tenants and what is being sold with the house. The first place to look is on the MLS listing. However, just because it says the refrigerator is included, buyers should not assume the sellers won’t change their minds. Buyers should clearly state in their offer what personal property they do or do not want included in the purchase.

Problem: The buyers began advertising the home for rent before the deal had closed. This created more tension between all parties and the tenants because suddenly people interested in renting the house were stopping by and asking to see the inside.

Buyer beware: If you don’t own the house, meaning you and the seller have not signed the closing documents at the title company, don’t advertise it for rent. The rental market in Bend is on fire right now and there is no reason to press your luck with the seller and the legal system by advertising a house you don’t own. The sellers and their tenants are not obligated to allow you to show the home to prospective tenants before closing and in most cases they will not allow it. Prospective tenants will likely think you are trying to con them and will move on to other rentals.

Problem: The buyers appear to have misrepresented their borrowing qualifications to the seller. The lender pre-qualification letter submitted with the buyers’ offer clearly stated that they intend to occupy the home as their primary residence and put 5% of the purchase price as a down payment. The ad mentioned above suggests an intent to actually rent the house out.

This could create two additional problems for the buyer. First of all, the seller, having seen the ad on CraigsList, can terminate the contract to sell AND keep the buyers’ earnest money. On top of that, if the lender sees the ad before closing they can cancel the mortgage and tell the buyers to take a hike. If the lender sees the ad after closing they can call the mortgage due and leave the buyers struggling to find financing. Especially if they don’t have additional cash to make the Loan-to-Value (LTV) at least 75%. We are aware of lenders calling loans due in Bend at least twice recently and it is not a situation anyone wants to find themselves in.

Buyer beware: Be up front with your lender. Don’t try to hide your intentions. The housing problems of 2007 and 2008 forced many lenders to re-evaluate their processes and one change many of them made was to be more vigilant in watching for borrowers who were trying to “game” the system.

Home buyers, it is good to do your homework and be involved in the transaction but if you get too excited about the purchase you could find yourself back at square one. Let the mistakes made by the buyers above be a reminder to beware of sabotaging your own real estate transaction.

HOA's and Rental Properties, What Investors Should Know

Often real estate investors get caught up in whether or not a house being purchased as a rental will make money. How much will it rent for? What are the expenses associated with this property? Necessary repairs will cost how much? While Home Owners Association (HOA) dues may be factored into the expense side of the equation it can be easy to overlook the fine print of the Covenants, Conditions and Restrictions (CC&R’s) recorded by the HOA.

Failure to review and understand the CC&R’s of a home owners association could prove costly for a rental owner. The first thing to look for is whether or not the HOA allows rentals. Many do not while some, like the neighborhood in the photo only allow a certain percentage of homes to be rentals.

When the housing bubble burst a number of HOA’s here in Bend, Oregon softened their stance against rentals and turned a blind eye to owners who rented out their houses or condos. Now that the housing market is getting back on solid ground, those once lenient HOA’s are beginning to crack down. Even if there are rentals in a neighborhood with restrictions against rentals, investors would be wise not to purchase a home there. All it takes is for one owner to put up a fight and turn a cash flowing rental into an unoccupied money pit.

Whether or not a house can be rented is not the only thing real estate investors should be concerned about from HOA’s. Home owners associations can restrict most anything that residents can see, hear or smell. Such rules can limit exterior paint colors, dictate when garbage cans can be at the curb, prevent owners from parking their commercial vehicles in plain sight, and even not allow clothes to be hung outside to dry.

Rules like these can be tough enough for a resident owner to follow but a tenant will likely consider them a burden. Especially if they weren’t made aware of the rules when the lease was signed. If tenants decide they don’t want to follow the rules of the HOA, the owner will be responsible for correcting any violations and paying any fines because home owners associations do not have direct authority over tenants.

Investors should be mindful that the more restrictive the rules of a HOA are, the more time will likely be spent answering letters and phone calls from the HOA. Then there is the time spent reminding tenants to follow the rules and/or trying to collect any fines.

When it comes to HOA’s and rental properties, real estate investors should:

Know what the HOA Covenants, Conditions and Restrictions say before making an offer to purchase.
Consider how restrictive those rules are and how likely a tenant will be to accept and follow them.
Make sure tenants get a copy of all of the HOA polices and rules and that they understand they are responsible for following them.

Cash on Cash Return and Why it is Important to Real Estate Investors

One popular metric for measuring the performance (present or future) of a real estate investment is Cash on Cash return. Cash on Cash Return gives an investor a rate of return on the amount of cash invested in a given property. While this is not a perfect measure of return on investment it is a good way to compare the potential return between two given investments or properties.

Cash flow is another popular measure of performance and it is the factor most investors start with when considering a property for purchase. It is also a factor in the Cash on Cash Return equation. Cash flow does not just refer to rents received* but the amount remaining after expenses are paid. Those expenses may include: mortgage payments, utilities paid by the owner, repairs, insurance, property taxes, home owners association dues, landscaping and property management. It is important to remember that each property is unique and investors would be wise to do their homework to determine not only what the property is likely to rent for but also what expenses will be incurred.

The next factor in the equation is how much cash out of pocket is invested. Each investor has their own threshold for how much cash they can or are willing to invest in any given property. We have some investors who don’t feel comfortable with anything less than 100 percent of the purchase price coming from cash while others are perfectly happy with the minimum down payment required by their lender. Either way is fine but the amount of cash invested will affect the rate of return as illustrated below.

Now we are ready to find out what the cash on cash rate of return is. The equation used is: Cash on Cash return = annual cash flow (income-expenses) / total cash invested.

Let’s use an example of a three bedroom house with a purchase price of $175,000. We could reasonably expect that house to rent for $1295/month resulting in annual rent income of $15,540. In this case our investor will finance 75 percent of the purchase price and make a cash down payment of $43,750. If the mortgage payment (principal, interest, taxes and insurance) comes to $882.99** and other expenses come to $175.00/mo. then cash flow will be $237.00/month or $2844.00 annually. That may not seem like much but it works out to 6.5% Cash on Cash Return. Now lets assume all other factors are the same but with an all cash purchase. Under this scenario cash flow would be $1120.00/month ($1295-$175) and Cash on Cash Return would be 7.7%.

Cash on Cash Return is a great tool to use when evaluating a real estate investment but it is important to keep it in perspective and remember that it is a snap shot of one year. It does not take into account the time value of money or gain/loss when the property is sold.

* If you will be borrowing money to purchase an investment property, your lender will use 75% of expected income but 100% of expected expenses for qualifying purposes. In the Bend, Oregon rental market right now investors can essentially expect 99% of income for planning purposes. In most cases, the property management side of our company is able to minimize vacancies to about one week between tenants unless the unit requires extra cleaning or repairs.

** Assumes interest rate of 4.75% based on today’s rates, property taxes of $2200 annually and insurance of $35/month.

How To Influence Sellers in a Multiple Offer Situation

For most of the last year in Bend, Oregon the real estate market has favored sellers because the number of homes for sale has been so low. This is called a seller’s market and in a seller’s market good homes often receive multiple offers within a short time after being listed. Multiple offers are great for the seller but put buyers in a predicament of trying to figure out how to make their offer more attractive than all the others.

A survey by the California Association of Realtors (see infographic below) confirms what you might already expect. The offer that was the highest priced was more compelling to home sellers than any other factor in 2013. It is easy to see why price would be most attractive to sellers but the good news is there are other factors that can convince a buyer to take a slightly lower price than the highest offer.

One of those factors is how well qualified a buyer is to borrow the money needed to buy the house. Pre-qualification letters are a dime a dozen but submitting an offer with a pre-approval letter can make big difference to a seller and listing agent who know the difference. A pre-qualification is based on what a borrower tells the loan officer. Generally, there is no checking of facts or even a credit check. A buyer who is pre-approved has provided their lender with a complete loan application and usually some supporting documents, credit has been checked, and the lender has run the application through the desktop underwriting system.

Another way to sweeten an offer for a seller is limit or even waive any contingencies. Contingencies are most often used by buyers to protect themselves from things that might be wrong with their borrowing ability or the house. The most common contingencies buyers place in a purchase contract include the inspection, financing and appraisal. A cash buyer can waive the financing and appraisal contingencies but a borrower who needs a mortgage cannot.

Waiving the inspection contingency can be dangerous and is not recommended for buyers who are using all of their cash to purchase the home. If the buyer finds something wrong with the house after the offer has been accepted then it’s “tough luck.” The seller has no obligation to negotiate repairs or price and the buyer has little choice but to proceed with the purchase.

The ability to close the fastest is a factor that buyers will consider in determining who wins a multiple offer situation but it doesn’t carry a whole lot of weight according to the survey. It is likely that most sellers just expect the process to take a certain amount of time so they have already accepted that fact. It probably shows up on the survey because many of the sellers were presented offers from more than one cash buyer. Cash buyers have some flexibility when it comes to how fast they can close but buyers who are borrowing money to buy a home are at the mercy of their lender.

We find it at least a little intriguing that personal information from the buyer, like a letter and family photo didn’t show up in the survey results. Here at Preferred Residential we have seen a “buyer bio” positively influence the decision of some sellers. Many sellers want to see their home go to a buyer they can relate to and some times a letter can tip the scales when two offers are substantially similar.

The bottom line for home buyers in a multiple offer situation is to make your best offer your first one.

Vacation Rentals vs. Long-term Rentals in Bend Oregon

Real estate investors in Bend are fortunate to have a way to make money on their investment properties that isn’t available in many cities. Because Bend, Oregon is well known as a vacation destination, investors can turn the properties they plan on holding long term into vacation rentals. A good vacation rental in Central Oregon can make its owner a lot of money as nine resorts in Central Oregon and those who own vacation rentals here can attest.

However, vacation rentals in resorts like Sunriver, Black Butte, Caldera Springs and Tetherow aren’t the only properties making money. If the number of vacation rentals in the city of Bend is any indication, then one can infer that vacation rentals can do quite well outside of the resorts. According to Michele Halderman at Bend Vacation Rentals there are more than 600 properties used as vacation rentals in Bend and most of them are concentrated around downtown, Bend’s WestSide, and the Old Mill.

More than 600 vacation rentals in Bend?

There is no doubt that Bend is a great place to visit but can that many vacation rentals really compete with the resorts and all their amenities? Perhaps but real estate investors should be cautious about buying a vacation rental in town. Vacationers are a fickle bunch and according to Halderman, vacationers in Bend want a beautiful home with high-end finishes at a decent price and they want it close to the action. Add all those things up and the competition to be seen as THE house to rent in Bend could become all consuming.

On the other hand, many, especially renters, would say there is a shortage of long term rentals in Bend. They would be right. Preferred Residential had three vacancies in March. All three were rented as fast as we could process applications and the average rent increase was 6.5 percent. These homes were not new, had average finishes and two of them had floor plan issues like 3 beds and 1 bath or 3 beds, 2 baths but only 1000 sqft. working against them.

Show me the money!

It is tough to know how much money a vacation rental can make because no one really likes to talk about vacancy rates for vacation rentals unless they are trying to sell the home. If a house has no history as a vacation rental then it can really be a crap shoot. We recommend that investors be as conservative as possible in their estimates.

For comparison sake, here is a Bend vacation rental I found on VRBO.com. It is a 3 bedroom, 2 bath, 1246 square foot home in a very desirable location as a vacation rental or long term rental. As a long term rental this house should easily rent for $1500/month. As a vacation rental it fetches $185/night. Being conservative, lets say it rents three of the four weekends in an average month and for three nights each of those weekends. That is nine nights at $185 for a total of $1665 rent received. Not bad and the upside is that is only nine nights out of a possible 30 but here comes the fun part…

Who is going to manage this vacation rental? Who is going to run ads, create a website, process paperwork and payments, arrange for cleaning after each guest, file and pay monthly lodging taxes, and arrange for repairs when needed? Vacation rentals require a lot of attention and vacation rental property managers are at least two times more expensive than residential property managers.

If location is everything, where do I buy?

Vacationers are much more particular about where the home they rent is located than long term tenants. That is not to say that location isn’t important for residential rentals, just that vacationers want to be close to the action. They already came a long way and they don’t want to have to spend their whole vacation driving around.

In Bend, that means they want to be close to the Old Mill for shopping and the amphitheater, downtown for the incredible dining choices and festivals, or WestSide Bend for the vibe and easy access to Mt. Bachelor and downtown. All of those locations command a premium sales price which is great when it comes time to sell but can lead to sticker shock on the front end of the deal. Long term rentals can be in all of those places but they can be elsewhere too and that means thousands more homes to choose from.

The best long term play for investment property in Bend?

In real estate, investment success looks different for each investor. Yes, everyone wants to make money but some are happy with a place to vacation that just happens to make some money too. Others are more interested in setting up reliable cash flow for retirement. Both are reasonable goals that can be attained by investing in Bend, Oregon real estate.

Update 3/19/15: The rental market for both vacation homes and long term rentals is constantly changing. The Bend City Council is currently considering proposals that will place limits on where vacation homes can be located and how many can be located in each neighborhood. Demand for long term rentals is at or near an all time high resulting in rapidly rising rents and less than 1% vacancy rates. Be sure to work with a Realtor® who understands the Bend, OR residential investor market. That Realtor® is Preferred Residential’s Principal Broker, Becky Seim (541) 610-8003.

Looking to Buy a Home? Plan on Owning it

Buying a home sets the stage for owning it and as obvious as that might seem, many home buyers fail to recognize it. They get caught up in the excitement of buying a home and don’t consider their long term needs and goals as part of the home buying process. As a result, they often end up unhappy with the home long before they planned to sell it. The good news is it doesn’t have to be that way. Some extra thought and planning while shopping for your next home can leave you satisfied with your home purchase for as long as you live there.

Patience, Grasshopper

It is important that buyers take their time and do their homework when shopping for a home. Once you sign on the dotted line, that home is yours and it isn’t cheap or easy to sell. The last thing anyone wants to do is buy a house only to find out you hate it after less than a year because there is more traffic than expected, the drive to work is awful, the schools really aren’t as good as everyone said or you can’t afford to remodel the tiny galley kitchen after all.

What about tomorrow?

A recent study by the National Association of Home Builders says buyers will stay in their home an average of 13 years before moving out. You may not expect to live in your home for that long but what happens if life gets in the way of your plans? Would you be able to live in this house longer if you had to? To the best of your ability, choose a home you will be comfortable in for as long as you live there.

Wallet Rules

Emotions can sometimes blind us to common sense and in the case of buying a home they can drown us. Your wallet should have the final word on which house you buy. If you have the thought, “Wow, that mortgage payment is high but my income will go up soon so it shouldn’t be painful after a year or two” then the payment is too high and you probably shouldn’t make an offer on the house.

Just because you qualify for a given payment doesn’t mean it will be easy to make. Buy with a fixed rate mortgage and a payment you can afford. Then if your income does actually go up you will have even more cash flow for vacations, paying down principal, saving for retirement or to save for your next house.

No More Landlord

One of the great things about renting is if something like the furnace breaks it is the landlord’s responsibility to fix or replace it. Buying a home means YOU own it and if anything breaks it is coming out of your pocket. Be prepared for the unexpected by setting up a savings account with enough money to cover the most expensive repair you might be faced with like replacing a furnace or leaky roof.

Also, be prepared for monthly expenses that you might not have had to pay while renting. We have had a few buyers tell us they wouldn’t have budgeted for something like garbage, water, sewer or gas if we hadn’t reminded them about it. While a $40 monthly sewer payment by itself might not break the bank, $200/month in unexpected utility bills could be a lifestyle changer.