Real Estate 2018: What to ExpectAs we head into a new year, the most common question we receive is, “What’s the outlook for real estate in 2018?” It’s not just potential buyers and
Rent Or Buy In Portland How To Decide
Whoa. When did all these people get here?
Portland is booming. Home prices are rising and it’s no secret that rent is skyrocketing.
There’s actually a really simple reason why this is happening; Portland is a great city. The people are friendly, there are fantastic outdoor activities everywhere (Mt. Hood just beckons you), and there’s a vibe here that just can’t be duplicated.
The problem is that everyone is finding out how awesome Portland really is and demand for housing is straining the current supply. Naturally, this puts rents on the rise. In the last five years the average rent in Portland has risen 40% and the vacancy rate is only 3%!
It’s great to live in an area that is seeing so much growth. However, this transition period for Portland makes it difficult for residents to answer that big question; Should I rent or should I buy?
If you’re battling this question, here’s some advice on when to rent versus when to buy in Portland:
You should rent if...
You need the flexibility. Buying a house is good if you plan to stay for a while. Renting (however expensive) gives you the flexibility to plan year to year. However, a recent study by Zillow shows that the break even point between buying a house and renting in Portland is just 2.2 years. That means that it is more cost-effective to buy a house than to stay in a similar rental if you’re going to be there longer than 2.2 years.
You’re not ready for the responsibility. Home ownership comes with new responsibilities. Repairs, maintenance, and property taxes top the list and are the usual concerns for renters who are not ready to buy. However, renters should note they they are already paying for those services in their current rental contract. You can be sure that your landlord bundles up those costs into your monthly rent. You might be ready to buy a home if you can budget for these costs on your own.
You should buy if...
Mortgage rates continue to stay low. Yes, in December the Fed increased the interest rate but this was the first increase in 10 years. If 30-year and 15-year mortgage rates remain low, renters should seriously consider BUYING in order to lock into these rates before they start to climb.
You find a great deal. Sometimes you’ll find a house that fits your needs, is in a great location for you, and at a really reasonable price. If you find one that fits that bill, jump on it! With the Portland market being so hot right now, those kinds of deals are rare and don’t last long.
Other times you’ll have to go out look for a deal or make one happen. There are still affordable neighborhoods in the Portland area and you can always try to negotiate a closing price (good luck trying to negotiate rent!).
If you would like some help finding a great (and still affordable) neighborhood in or around Portland or just need some help at the negotiating table, please feel free to give me a call and I would be more than happy to work for YOU!
Your Portland Metro Broker with over 15 years experience Shawn remains continuously updated on market trends, financing and legal reforms, so he can help you make informed decisions. The real estat....