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.