Bend Real Estate Investment Archives - Page 5 of 5

Strong Tourism in Bend Helps Vacation Rentals

Despite the bad economy, Doug LaPlace the president and CEO of Visit Bend says in an interview with KBNW News that tourism is alive and well in Bend and Central Oregon. LaPlace says that transient room tax collections have increased for 20 consecutive months when compared with the previous year. He also says that some months this year have broken historical records for tourism in Bend. No specifics were given in the interview as to what may be driving these gains but LaPlace does say that he expects annual sporting events and the booming beer brewing industry in Bend to keep Central Oregon a hot destination in 2012.

With so many people coming to Central Oregon don’t you think it makes sense to subsidize your vacations in Bend by owning a vacation rental? Visit Bend (formerly Bend Visitor and Convention Bureau) estimates that between 1.8 and 2.2 million people come to Bend each year. This doesn’t even include all the resorts like Sunriver, Black Butte, Brasada, Pronghorn and CrossWater.

Now is a great time to think about buying a vacation rental for many of the same reasons I have mentioned previously in favor of buying a residential rental. Prices are low, interest rates are low and rental demand is high. Right now, in Sunriver alone, there are 237 homes, townhouses and condos for sale ranging in price from $110,000 to $1,599,000. There is something for everyone. Stay tuned to this blog because I hope to be able to write about particular house for sale in Sunriver later this week. I am just waiting for owner approval. In the mean time, if you just can’t wait and need to know what is available you can search Central Oregon MLS or give us a call at (541)231-4656. We would be happy to send you a list or take you on a tour of any of the Central Oregon destination resorts.

Home Ownership Declining

I mentioned in a previous post that now is a great time to own a rental. The demand for rental homes has been rising because so many people have lost their homes to foreclosure, lost their jobs, and/or are having a tough time qualifying for a mortgage because of the more strict underwriting standards. On July 29th the U.S. Department of Commerce’s Census Bureau released a report showing that the number of Americans who own their own homes has declined to a level not seen since 1998. Currently 65.9% of Americans live in a home they own. Interestingly, Morgan Stanley analysts say that there are 7.5 million home owners who are delinquent on their mortgages. If those people were to be removed from the equation the home ownership rate in the United States would only be 59.7%. The lowest recorded rate of home ownership (62.9%) was in 1965 when the Census Department began keeping records. Analysts say that the level of home ownership could decline another 1% – 2% depending on what happens with our current economic situation.

These numbers are great news for people who own rental properties and for people who are looking to buy either a primary residence or an investment property. Add to that the fact that late last week mortgage interest rates hit an all time low and now is a great time to buy a home. Give us a call for a complete list of Central Oregon homes that are for sale in your price range.

What will $100,000 buy? Bend vs. Redmond

A number of my posts lately have focused on how now is a good time to buy a rental home in Central Oregon. Two big reasons to think about owning a rental right now are that prices are low and the demand for rentals is high. But where should you buy? In Bend or Redmond? Is one city better than the other? How much house can you buy? For the sake of comparison I found two houses that just came on the market today and are priced at about $100,000.

The photo above is of the house in Bend on Heavenly Drive. It has 3 bedrooms, 2 baths, is 1108 square feet and sits on .20 acres. This single level home was built in 1994 and is in a pretty good location. It’s very close to the hospital, grocery store, Costco and schools. The list price for this house is $99,900. I don’t know why so many houses in Bend were built without forced air heating but this is one of them. It is heated by cadet heaters in each room. Taxes are $1748. This house is already rented but I’m not sure what the tenants are paying. Becky and I agree that it could easily rent for $925 a month. Someone buying this house as a rental would expect to have to put 20% down ($19,980). Assuming an interest rate of 5.5% on a 30 year loan of $79,920 the principle and interest payment would be $451.70. Adding taxes ($145.67/month) and insurance (approx. $50/month) the total monthly payment would be $647.37. Cash flow of $277.63 a month with little or no work required. That’s pretty good. Update: This house sold in October 2011 for $106,550.

The house above is in Redmond and also has 3 bedrooms and 2 baths but sits on a slightly smaller lot (.15 acres). At 1797 square feet it is almost 700 square feet larger than the house in Bend plus it is six years newer. This bank owned home is listed at $102,900 and property taxes are $2054. Unlike the house in Bend, this one has forced air heating. It sits in a nice residential neighborhood but isn’t quite as close to shopping, schools and the hospital. However, there is a nice little park a couple blocks away. I would expect this house to rent for $950 without a problem after the yard was cleaned up and some of the bolder colors were painted over inside the house. Assuming the same variables as I used for the Bend home, down payment would be $20,580, principle and interest $465.27, taxes $171.17 and insurance $50 a month. The total monthly payment would be $686.44 which would produce a net cash flow of $263.56. Update: This house sold in December 2011 for $97,900.

So which house is the better investment? You can buy more house for your money in Redmond. In our experience it isn’t any more difficult in one city or the other to find a good tenant and get a home rented quickly. Especially if the rent is priced right. When it’s time to sell it might be a little easier to sell in Bend just because there are so many more people who want to live there. Ultimately, the decision is up to you. There are so many variables for each situation that it is important to have a good Realtor® who can present you with all the facts and can answer any questions you may have.

Update: Here we are two years after I wrote this post and home prices aren’t what they used to be. Take a look at the homes for sale in Bend and Redmond for under $150,000 and you will see what I mean. However, that doesn’t mean that there aren’t deals to be had in either city. Preferred Residential can help you find them.

A Good Time to Invest in Real Estate?

I found an interesting article today that suggested that renters are the next victims of this housing market. Although the article is focused on larger markets we are seeing similar activity here in Central Oregon. The rental market in Bend is tight. When we have a new house for rent we usually have more than one family wanting to apply for the house within a week.

It is pretty clear that the large increase in numbers of people renting is primarily a result of so many houses being foreclosed. I don’t have hard numbers but I would say 70% of prospective tenants that I talk to need to rent because they have recently given their house back to the bank. In Central Oregon there are a couple other factors that are putting pressure on the rental market. One is that people just like to live here. This area has so much to offer that people move here from up and down the west coast. Often for no other reason than they have heard such great things about Bend that they decided to move here. These people frequently choose to rent when they move here because they haven’t figured out exactly where they want to live, they aren’t sure how long they will be here or they too are waiting for their credit to recover after having their house foreclosed.

A second pressure on the rental market has been PV Powered (now owned by Advanced Energy). They have been expanding rapidly over the last few years, going from 55 employees to over 140. Just in the last two months we have placed people working for PV Powered who moved here from Portland, Southern California and Columbus, Ohio.

Which brings me to my title question. Is now a good time to own an investment (rental) property in Central Oregon? The short answer is yes. We have sold a number of investment houses in the last few months that have had positve cash flow right out of the gate. Prices are low enough and rents are high enough that with the minimum required down payment an owner can net $100 or more a month on a rental. Does that sound interesting? We would be happy to help you determine if owning an investment property is the right fit for you. You can find out more about us along with our contact information at http://www.buybendoregonhomes.com/

Strong Tourism in Bend Helps Vacation Rentals

Home Ownership Declining

What will $100,000 buy? Bend vs. Redmond

A Good Time to Invest in Real Estate?

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