New apartments in Bend are much needed

NWX Apartments 2

A rendering of NWX Apartments from www.northwestcrossing.com.

By Jason Boone

The tight rental market in Bend has hardly been a secret. With vacancy rates that have hovered around 1 percent, it would be impossible for anyone searching for a home to rent to ignore.

Thankfully, the market in Bend appears to be reacting with a slew of new apartment projects, including two in NorthWest Crossing. And better yet, it appears the projects cater to vast swath of income levels.

Take the proposed NorthWest Crossing developments, which are aimed at two significantly different markets. The first, NWX Apartments, is a 132-unit high-end complex set for the area around Discovery Park Lodge. The complex will include six three-story buildings, but will attract renters with high incomes. It is set to break ground this summer.

The second, which has yet to be named, includes between 48 and 54 units. Proposed by Pacific Crest Affordable Housing, the development would be built farther east in Northwest Crossing. If approved, it is aimed at providing affordable housing with rents that could be as low as $575 per month, according to the developers.

Both should be interesting additions to a neighborhood that is already among the most prized areas in all of Bend.

What else is on the horizon in Bend? Here is a look at some of the major apartment developments that are on the way, all of which are on the city’s east side:

  • A 208-unit development called Linnea Apartments is going up in the shadow of Pilot Butte. The Seattle developer building the $21 million project promises it will be the “nicest product in Bend.” Tenants are slated to move in by as early as May.
  • A 153-unit development named Bellevue Crossing is nearing completion on the east side of Bend, near Worthy Brewing off U.S. Highway 20. Delayed by winter weather, the complex is hoping to accept new tenants by this summer.
  • Ninety-six apartments are going up with the Boulder Pointe Apartments in northeast Bend.

In all, there are some 1,500 apartment units proposed for Bend. This is good news, which in many ways has exemplified the record growth in rental demand seen throughout the U.S.

Why care about the rental market if you plan on buying a home?

Well, an expensive rental market means that residents have less buying power, and generally speaking, a tight market drives up the cost of living throughout the area.

While not enough to solve the relative shortage of rental housing in Bend, relieving some of the pressure with new apartments should be welcomed.

The movement in rental housing is just one of the exciting developments happening in this thriving city.

To learn more about the Bend market, get started with listing your Bend home, or to view area homes contact me call (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Vacation rentals can be a good investment, but new rules in Bend require caution

Home Buyer CreditsBy Jason Boone

Buying a rental property can be a wise investment for many, providing extra income for years to come. And the temptation to become a landlord right now is clear.

The Bend rental market dramatically favors landlords at the moment, with a historically tight rental market and vacancy rates that are hovering around 1 percent.

But it is not something that should be entered into lightly, particularly for those who want to buy property and use it as a vacation rental. The reason is that Bend City Council approved a measure earlier this year to limit the density of short-term rentals.

The measure disallows more than two rentals to be within 250 feet of each other (the move was not retroactive). In addition, the city forced rental owners to purchase operating licenses from the City. The City Council’s move was met with controversy, to be certain.

Since its implementation, it does appear that the measure has been successful in reducing the number of rentals. According to the City Council and a recent Bulletin report, the total number of short-term rentals in Bend has dropped from 700 to about 600.

Those shopping for a potential income-generating property should take note, though. Since the measure’s implementation about 120 homeowners were rejected after applying for a rental permit because their home was too close to an existing vacation rental.

No one would want to be caught in that situation. To avoid such an issue, one should be careful to understand some truths about the new rules in Bend.

  • Potential vacation rentals in some neighborhoods are hindered by the new rules more than others. Westside Bend neighborhoods such as Old Bend and River West, charming areas where the already high concentration of short-term rentals helped to initially spark the controversy, are more difficult than say much of Bend’s eastside.
  • Under the new rules, landlords must notify neighbors of their intention to make a home a short-term rental.
  • Even if a rental is approved for a license it can be revoked if there is a violation of rules regarding noise or parking.

Still, an investment in a short-term rental can pay significant dividends over the long term. The Bend tourism market is booming right now, and the hotel room inventory is playing catch up. And though operating expenses for vacation rentals are often more than a conventional long-term rental, most short-term rentals can command a higher price.

There is a lot to weigh.

In Bend, the debate between advocates of private property rights and those who want to limit the explosion of short-term rentals will likely rage on for years. But for someone who is searching for a potential rental that can generate income, knowing the details of the licensing process and the pros and cons of vacation rentals is crucial.

To learn more about the Bend market, get started with listing your Bend home, or to view area homes contact me call (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Buying a home rather than renting still the prudent choice for many

Key to Financial SuccessBy Jason Boone

To rent or buy a home is an age-old question. It also happens to be among the most important financial decisions anyone can make.

The real estate market in Bend, Oregon, has continued to show strength since the Great Recession has relented. Meanwhile, renting in Central Oregon has proved difficult, with rising rents and low vacancy rates dominating the market.

Still, many might still be hesitating to jump into the real estate market. Considering the shape of the real estate market just a few years ago, that is certainly understandable. But it just might be time to move from renter to buyer.

Either way, a prudent decision is in order. How does one make the best decision for themselves?

First, let’s look at the benefits of buying a home:

  • Homes historically gain in value. That has certainly been the case in recent years in Deschutes County, where the median price in September sat at $300,000, up from $260,000 in September 2014, according to Central Oregon Association of Realtors data.
  • Equity builds each month simply by the act of paying a mortgage.
  • Mortgage interest is tax deductible for almost all homeowners, which means every year the IRS sends a lower tax bill.
  • Buying acts as a hedge against inflation. Unlike rent, the cost of a 30-year fixed mortgage remains stable until the home is paid off.
  • An unquantifiable pride that comes from home ownership.

Next let’s look at the the advantages of renting:

  • Renters generally avoid the cost of maintenance and do not have to pay property tax.
  • Greater flexibility to move.
  • Not subject to any fluctuations in the real estate market.

Of course, for renting to truly be of value beyond the flexibility of not owning property, it must be overall be cheaper to rent than to buy. In Bend, that may not be the case.

The rental market is historically tight with vacancy rates hovering around 1 percent. That has put upward pressure on rental prices. In the annual survey by the Central Oregon Rental Owners Association last conducted in 2014, the average rental price for a three-bedroom home in Bend was $1,221. That has moved even higher since the survey was completed.

For the sake of comparison, let’s look at the cost of housing. Interest rates are sitting at about 3.79 percent for a 30-year fixed mortgage, according to Freddie Mac’s latest weekly survey. A $245,000 mortgage with a 20 percent down payment would cost about $954 a month, according to one mortgage calculator. Of course, that does not include the cost of property taxes and insurance. But it also does not factor in the tax deduction homeowner receive from paying interest.

With current rental prices high, it may be in the best interest for those searching for a home in Bend, Oregon, to consider buying.

To get started with listing your Bend home, or to view area homes contact me by calling (541) 383-1426 or visit Bend Property Search to connect with me through my website.

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Jason Boone | Principal Broker, CRIS | Duke Warner Realty | Skjersaa Group
Oregon Real Estate Licensee | 1033 NW Newport Ave Bend, Oregon