Following up on a post last week about investors buying more homes. Freddie Mac issued a press release October 17th that lends some numerical evidence as to why investors are buying more homes. In that release they refer to Census Bureau numbers reporting a net increase of 1.4 million households that moved into rental housing over the 12 month period ending June 2011. That is a 4 percent increase in the number of tenants. As you might imagine, many of those people are former home owners themselves who prefer to rent homes instead of apartments. That preference for homes stems from the mental hurdle that many people don’t want to or can’t make to move from a house to an apartment.
This large increase in the number of tenants is pushing vacancy rates down and rents up. I can’t give you any current numbers for vacancy rates in Central Oregon as the Central Oregon Rental Owners Association only releases numbers once a year. I can however, give you last years numbers and an example of how rental rates are increasing today. We have some clients who currently rent from a large apartment complex on the east side of Bend. They have been paying $800/month for a three bedroom apartment. A month ago the apartment manager notified them that when their lease ends their rent will be increasing to $925. That is a 12.5 percent increase. Our clients are currently waiting to hear from the bank on a short sale offer they have made. If their offer is accepted, their total monthly payment (principal, interest, taxes and insurance) will be less than $700 for a three bedroom, two bath house on almost a quarter acre lot.
Whether you are an investor or owner occupant, now is a great time for you to consider buying. For investors, there are a growing number of people who are reluctant to buy or can’t get financing so their only options are to move in with family or rent. For owner occupants, if you can get financing and aren’t planning on moving in the next three years, why not explore the possibility of paying less to own a home than you do to rent? We are uniquely qualified to help investors and owner occupants make an informed decision. Call us.
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