2023 Recap and Market Look-Ahead to 2024

With 2023 in our rearview mirror, we thought it might be a good time to provide an assessment of the Bend rental market as it stands today and some thoughts on where it might go in the coming year. 

Despite higher home prices and rising interest rates, overall the Bend rental market has proven to be resilient and we continue to see investment buyers purchasing rental homes as well as steady interest from prospective renters for the majority of rental homes on the market. In the past year, we saw an average of nearly 40 inquiries per property for each listing we posted. 

The overall takeaway is that Bend continues to be a desirable place for people to live, despite the high cost of housing. 

If you are considering investing in Bend real estate, here is some information to consider about the market:

Bend is split almost perfectly in half east and west by Highway 97. Within that, there tends to be a noticeable price difference between properties depending on whether they are located on the east or west side of town. 

Generally speaking, a 3 BR/ 2 BA home on the west side of Bend rents between $2,900-$3,500, while a similar home on the east side might rent for somewhere between $2,200 - $2,800. Of course those are average ranges and can vary tremendously depending on certain factors, but those are typical rental rates. For properties under our management, average vacancy time tends to be around 10-15 days in the peak season (spring/summer/early fall) and about 20-25 days in the late fall and winter. 

Strong factors that contribute to a higher rent price are: 

• Having a fenced yard

• Allowing a dog(s) 

• Having air-conditioning 

• Homes with an office 

• Including professional landscaping 

• Updated interior 

• Homes without carpet or little carpet 

• Proximity to amenities 

If you are considering buying an investment property in Bend in the coming year, we would love to hear from you. We can help by providing a rental analysis for a specific property or a particular neighborhood or part of town you are considering. Contact us with any questions! 

Why does my property management company need to be added as an “Additional Insured” on my landlord policy?

If you are a rental property owner hiring a property management company to manage your property, you may notice that most reputable management companies require clients to list them as an “Additional Insured” on the landlord insurance policy. This is very different from an “Interested Party” and is a very important way to mitigate liability for both parties. 

Property managers assume a great deal of responsibility and inherent risk in the business of property management. And while a property management company should still always carry their own professional liability insurance and general liability insurance, that insurance will likely not always cover claims against matters concerning the home itself. This leaves the management company vulnerable to risks. And since most management companies also include a hold harmless clause in their agreement, this ultimately could leave the homeowner exposed and personally liable for a claim

Adding your property management company as an “Additional Insured” on your policy means that coverage is extended to the management company as well, so any claims or litigation that may arise become simplified, as both parties will present a unified defense, with one insurance company representing them both. 

• Not all insurance providers allow owners to add property managers as an “Additional Insured”, so make sure to find out as you may need to switch providers if this is not something they can support.  

• Being listed as an “Additional Insured” is NOT the same as being listed as an “Interested Party”

• Some insurance providers do charge to add a property manager as an “Additional Insured.” Not all do. 

Talk to your insurance agent to find out what options are available with your policy to extend coverage and keep your investments safer.

Renting During a Pandemic - Here’s What To Know

The year 2020 will certainly go down as one for the books and with a global pandemic in our midst, the housing market was not left untouched. Like all of us, we have had to adapt to a new way of living and doing business like never before. Here are some things to be aware of about how the pandemic has impacted renting a home in Central Oregon: 

The market is booming and we better get used to it. 

While some major cities and urban areas across the country experienced dips in their housing markets with residents fleeing and prices dropping along with them, Central Oregon started breaking different records: our market is booming. What was already considered a hot housing market and desirable place to live just became even hotter through this pandemic. 

In July, the median home price for a single-family home jumped up 13% from the year prior, according to a report from Beacon Appraisal, and the median sale price was $529,000. Skip ahead to October and that median home price is now $560,000. The rental market has kept pace with that demand and vacancies are at all-time lows and rent prices at all-time highs. 

What’s causing the boom? Bend is drawing the attraction of city-dwelling professionals who are no longer tied down by their jobs and have the ability to work remotely from anywhere. As more and more companies lean into satellite-based employment for the foreseeable future, their employees are taking this opportunity to pack up and head out to smaller, more idyllic destinations outside  the cities they came from.

Protip: If you’re considering a move and see something available that interests you--act quick before it gets gobbled up. The inventory shortage and high demand means most properties won’t stay available for long. 

Answer that FaceTime call - it’s your leasing agent ready for your showing!

Remember the good old days of shaking hands and meeting face-to-face? We miss them, too. But thankfully, technology has allowed us to continue to keep homes renting with virtual showings for prospective renters looking to move. Truth be told we’ve been doing this all along since we rent to many folks from outside the area, but now virtual showings through FaceTime or Google Duo are now some of our main methods of meeting with new renters. The leasing process is also all online and applicants can fill out applications from our website and sign a lease electronically through DocuSign.

Lights, Camera, Action! 

In some situations where the home we need to list for rent is currently occupied, we may ask to come by and take some recorded video footage of the home to offer to prospective renters instead of a virtual showing. This helps us reduce the number of times we need to enter the home. We always wear a mask and follow Covid-related precautions and ask that tenants do as well. And if a tenant is concerned about anyone coming to the home period, we may instead ask them to take some snippets of video footage for us. But ultimately, we rely heavily on our listing photos and familiarity with our homes to help both current tenants and prospective renters feel at ease with the situation. 

All in all, 2020 has forced us to be a little more creative with our methods and flexible with how we adapt. We will continue to take each day as it comes and learn along the way to better serve our community and industry as best we can. 

5 Ways to Get Your Home Ready for Spring

Spring is officially here and that means it’s time to spring-erize your property. Here are 5 ways to get the home ready for the new season:

1. Get the sprinklers turned on. If your home has a sprinkler system that was properly blown out and shut off before winter, it’s now time to start thinking about getting it back up and running. Replace any sprinkler head that need repair and get the system programmed for your preferred watering schedule.

2. Inspect any landscaping or yard needs. Once the snow has melted it’s a good time to check any lawn areas that may need reseeding or other areas of the yard that may need attention. Now is also a good time to open foundation vents. Make sure to keep any styrofoam blocks in a safe place to reuse next season.

3. Check air systems. If your home has an air conditioning unit, now’s a great time to check it. Make sure filters are cleaned or replaced and see that any other routine maintenance is scheduled.

4. Test smoke detectors. With the turn of the seasons, now is a great reminder to check smoke and carbon monoxide detectors in your home. Test all alarms and replace batteries if needed.

5. Spring cleaning! During the winter outside areas can become cluttered with things like snow shovels, rock salt or other things. Nothing feels more satisfying than a good clean home, so find a few things to tidy up, donate or put in storage to free up space and leave you with a clean home.

Whether you own your own home, rent or own a rental property, these are important tips for everyone to know and follow regularly each year. If we are lucky enough to manage your rental property, we will take care of these things for you and make sure the home is in tip-top shape for spring. Contact us today to see how we can help (541) 647-2251.

I own a rental property. What type of insurance do I need?

If you’ve ever owned a home, you should be familiar with a homeowners insurance policy. What you may not be familiar with is how that policy should change if your property is being used as a rental.

We will get into the nuts and bolts of what different policies mean below, but the biggest takeaway you should have from this is if you aren’t 100% positive you have a landlord insurance policy and your property is a rental, you need to call your insurance agent right away.

What’s the difference?

A quick way to think of the difference between an average homeowners insurance policy is that a general homeowners insurance policy will not cover the property if the homeowner is not living there. Having renters opens greater risk and liability from an insurance perspective, so it’s important to make sure your insurance policy reflects this.

What does it cover?

There are various types of policies which may be called anything from landlord insurance, rental dwelling policy, or tenant occupied dwelling insurance. Not all policies are created equal and your coverage will depend on your policy, but a good policy should include the following:  

Property damage insurance: Any physical damage to the home caused by things like fire, weather, vandalism, etc.

Liability insurance: Injury to someone living in or visiting the property.

Loss of rents: Reimbursement for any interruption to rental income due to damage or loss of property.

What does it NOT cover?

It’s also important to note something that is not covered in a landlord policy, which is a tenant’s belongings. In the event of fire, flood, theft, or any other damage-causing incident, any personal items belonging to the tenant are not part of this coverage. For this reason, it is important to make sure your renters carry their own renters insurance policy.

How much does it cost?

Like any insurance policy, it’s dependent on many factors specific to the home, location and policy holder. An industry standard is to expect to pay between 15% to 20% more for a landlord policy than a typical homeowners policy (source). 

If you are considering buying a rental property or already own one, make sure you talk to your insurance agent about the type of coverage best suited for your property. If you have any questions about these coverages or would like to be certain you are adequately covered, see your local insurance advisor.

We recommend Ryan Robertson with American Family Insurance. His team here in Bend is professional, responsive and always quick to help and answer questions. You may contact Ryan at 541-317-2835.

“We’ll have our neighbors look after the place...” — and other famous last words from rental owners who didn’t hire a property manager.

We often talk with first-time rental homeowners who start out skeptical of hiring a property management company to look after their rental.

“We have family in town to help if anything goes wrong”

“I already know a great handyman”

“We found solid renters”

“How hard can it be?”

We’ve heard it all and our answer is always the same: If you choose to privately manage your rental, there will most likely come a point when you wish you would have hired a professional.

Take a few situations where doing it yourself can be costly.

Placing Renters:

Maybe you posted an ad on Craigslist or you’ve got a friend of a friend who needs a place. In Bend, finding renters is fairly easy. Finding qualified renters can take time.

• Did you run a background check?

• Do they have good credit?

• Did you call their prior landlords and references?

• Did you check criminal records?

• Do they have a history of paying rent on time?

Don’t just take their word for it if they say they have employment, good credit and a clean record. We put in the time and resources to make sure they are who they say they are.
 

Knowing the Laws:

Unless you’ve spent a good deal of time reading and understanding them all, you may be breaking a law and not even realize it. From Federal Fair Housing laws, Oregon Residential Landlord Tenant Act, anti-discrimination laws, the American Disability Act, plus other state and county regulations, there’s a lot to know and a lot that can get you in trouble if you slip up, even if you have the best intentions.

Midnight Calls:

Suppose your renter gets locked out in the middle of the night. Or a pipe freezes and bursts. Or a circuit blew and they can’t find the breaker. Or the carbon monoxide alarm is going off. While those things may seem easy to resolve in midday, getting woken up at midnight may not be feasible for you, especially if you don’t live nearby or have to get up early for work. .

Inspections:

One of the most important parts of what a property management company should offer you is peace of mind that your investment is being protected. Inspecting the property regularly is no exception. Even the best of renters need checking-up on.

Tenants can often fail to realize where a minor repair could escalate into a major one if left untreated. Perhaps the lawn isn’t being watered or the landscaping is overgrown. Maybe you find out the renter is actually subletting and not even currently living there anymore, or they have an unauthorized pet in the home. Checking on the home regularly — both inside and out — is crucial to making sure your investment is being treated well.

Collecting Rent:

This one might seem obvious, maybe  even  easy. But especially for landlords who don’t live near their rental property, imagine a scenario where it’s 5th day of the month and you don’t have rent yet. You’ve called the tenants, emailed, sent a letter, and no response. What do you do? Those friends and family who live nearby and promised to help look after the place may not be so eager to run over to a house and confront a stranger about past-due rent. And don’t forget—there’s a lot of laws around late fees and evictions proceedings that you need to watch out for.

Believe it or not, managing a rental property can be a full-time job. Depending on how close you live, how much time you can afford and how involved you want to be, hiring a professional almost always pays for itself. We’ve worked with rental owners along every stage of the journey and if there’s one thing we’ve learned, you can’t put a price tag on peace of mind. Whether you plan to keep your investment property as a rental forever, sell it, or use it as a home one day for yourself, don’t shortchange your investment by skimping on something as important as managing it. Call us today and we can discuss your Central Oregon  rental property, your goals and your concerns (541) 647-2251. Learn more about property management here.

So, You’re Thinking of Buying a Rental Property

Real estate can be a great investment. With the value of land continuing to increase and more millennials choosing to rent instead of buy, owning a rental property can be a successful investment strategy. If you’re going about this for the first time, there’s a lot to consider before deciding if this is the right approach for you and here are some helpful tips on where to start.

Decide on your goals

Before you do anything else, do a little soul-searching and ask yourself why you’re considering owning a rental property in the first place. Do you plan to manage it full-time? Are you relying on the property for income? What are your long-term plans for the home? Do you want to live in the same area as the property?  Answering these questions will help you decide where and what type of property you want to invest in.

Decide how you will manage your rental  

This may be something you addressed when thinking about your goals, but it’s important to spend time deciding if owning a rental property is something you plan to manage yourself or if you want to hire a professional. Think about how much time you can devote to everything that goes into it and start researching some property management companies to find out what their costs are and whether that might be a better option for your lifestyle. (TIP: Find out the questions you should ask before hiring a property manager)

Determine your budget

You don’t have to afford a mansion to own a rental property, but you should have enough funds set aside so the purchase of a property won’t leave you scraping for quarters each month. Consider the big picture when calculating your budget, knowing that the sale price isn’t the only number to look out for. Take into account property taxes, insurance, repairs and improvements, and loss of rents for any months the property may sit empty between tenants.

Get educated on the market

Once you’ve decided to buy a rental property, you need to decide where to buy your rental property. Picking a place that has a high vacancy rate is probably not going to yield a high rental income. Spend some time talking with local brokers and property managers and looking through online rental listings to understand the average rent price, number of listings available, and how long the listings sit on the market. This will help give you a sense of whether the rental market is strong or not. According to Cheri Smith and Molly Brundage from BrundageSmith Real Estate Brokers, the Bend real estate market has seen home values increase steadily by roughly 11% each year over the past five years. They went on further to say:

“We predict that trend to continue as inventory remains tight but buyer demand increases. While we experience a seasonal / holiday slowdown in November and December, a greater percentage of homes on the market are sold in February - April more than any other time of year.”   

- Cheri Smith, Broker / Molly Brundage, Principal Broker

Tour properties, then more properties, then more properties

Next, the fun part-start touring some homes! Talk to your broker about what you’re looking for and have them help refine your search. Despite the excitement you may feel when you’ve found “the perfect one”, try and view as many homes as you can before you take anything further. If you can, visit the home multiple times and during different parts of the day and week to get a feel for the neighborhood.

Get a rental analysis

When you’ve found some properties that peak your interest, it’s time to get an idea of what they may make in rent. This is done by looking at other similar homes in that area and determining an average rent price. When comparing properties, you should place high importance on location (the closer the comparable homes the better), the similarities in size (number of bedrooms / bathrooms and square footage), and any other factors that may be relevant to rent demand, such as garage, backyard, home office or appliances. All of these factors can help you get an idea of how much the home is worth in rent. Always keep in mind these numbers are estimates and that seasonality plus  housing market trends can impact price. (TIP: You can ask us for a rental analysis anytime! We love talking to you about your potential property and helping you get an estimate of rent, and we do it for free!)

It’s all up to you!

You’ve thought it through and done your homework, now it’s time to decide if you want to bite the bullet and become a rental property owner. Hopefully you have found this helpful and you have a better idea of where to start if you’re considering real estate investing, but if you have questions about the rental process, rental market, or anything else, we would love to help you. No question is a bad one and we want to be a resource for you, so please feel free to contact us at any point in your journey.

Special thanks to the local brokers who contributed to our post, Cheri Smith and Molly Brundage with BrundageSmith. If you would like to get in touch with them to find out more about the real estate market, their contact information is below:

Cheri Smith
csmith@total-property.com
541-788-8997

Molly Brundage
mbrundage@total-property.com
541-280-9066

Short Term Rentals vs. Monthly Rentals: What to Know Before You Invest

If you’ve spent much time in Bend, you know there is a lot of discussion around Short Term Rentals (STR), and unless you are familiar with city ordinances, it can be confusing to understand what they are and whether or not you are allowed to turn your property into one.

According to the City of Bend, a STR is defined as a property or unit rented to a tenant for 29 or fewer days. That means if you decide to rent your property out for less than 29 days at one time (for example a vacation rental), you are operating a STR.

What does that mean for your property?

It means two things:

1. You need a STR Land Use Permit from the City of Bend

2. You need a STR Rental Operating License from the City of Bend

The City of Bend regulates the number of STR permits issued in a certain area, so it’s important to know that not all properties are eligible to be an STR. To help you identify whether a given property is eligible, reference this Short Term Rental Eligibility Map and locate your property. A red color overlay means the property is not eligible and a yellow color overlay means the property is eligible.

So, what about monthly rentals?

Should you decide to rent your property out for 30 days or more, you do not need to apply for the STR permits or licenses through the city--these are viewed as “long-term rentals.” However, Bend has a high demand for both month-to-month (MTM) and long-term rentals as well. Prospective buyers frequently need a furnished place to live after putting an offer on a home and before closing and move-in. Also, others such as temporary hospital employees, seasonal vacationers, or people waiting to find the right long-term rental need a furnished MTM rental as well. Monthly rentals are almost always a better option and more affordable than hotels or other short-term housing solutions, so sometimes this can be a great choice for your rental property. Another advantage of a MTM rental is that, as the owner, you can save the property for personal use at certain times throughout the year while still benefitting from income generation.

At Elevation Property Management, we are experts at managing monthly rentals. We can help you decide if it makes sense for your property to be a monthly rental and how much you could expect to get in rent should you go that route. And of course, we can help with everything else from the marketing the property to ongoing monthly management with your renters.

Contact us today if you would like to find out more about monthly rentals and options with your property!

For more information on STR’s, visit the City of Bend’s Short Term Rental Program site.

Now is the time!

With summer ending and cooler weather on the way, now is a great time to start thinking about tackling some easy, inexpensive ways to increase the energy efficiency of your home or rental and reduce your energy bills.

According to the Environmental Center, a Bend organization focused on sustainable energy, ‘small changes can make a big difference. For instance, for every degree you lower your thermostat, you can save 3% on your heating costs. And by setting your thermostat to 60 – 62 degrees at night, you can really start to dial in the savings!’

Here are a few low or no-cost ideas designed to make your home more energy efficient and lower your monthly bills.

Weather stripping: Doors and windows are likely the biggest culprit of heat loss in your home. At Home Depot, weather stripping for a door will cost between $6 - $25, depending on the type you choose. And a 17 ft. roll of foam tape for windows starts as low at $2.50. And installation is easy: cut to size, pull off the sticky backing and press into place. That’s it!

Water heater: Turning down the temperature 10 degrees on your hot water heater saves 3% - 5% on energy costs and a drop from 140 F to 120 F saves you 6% - 10% percent. In most homes, the default setting on the water heater is 140 degrees, so turning it down can save big money on energy.

Washing clothes: Switching to cold water for washing clothes helps in two ways: by reducing carbon dioxide emissions and lowering energy usage. The Sierra Club estimates that each household can save over 1,600 lbs of carbon dioxide emissions by switching to cold water washing. In addition, washing clothes in cold water can reduce energy use by 75%!  

LED light bulbs: According to the Environmental Center in Bend, LEDs use 80% less energy than your standard incandescent light bulbs, potentially saving $100+ on your energy bills.

You can sign up to receive your free LED light bulbs from the Bend Energy Challenge. This program includes Redmond, Tumalo and Bend and offers applicants up to 16 LED lights for their home - for free!

Power down/unplug devices: According to the US Dept. of Energy, most homes spend $1,900 a year on energy costs and 5% - 10% of your electricity is wasted by devices that are plugged in 24 hours a day. While many appliances only use low levels of electricity, others such as computers and TVs, consume a lot more power, even in standby mode. And the cumulative effect of so many devices plugged in around the clock can really add up.

Get an energy assessment: The most complete action you can take to reduce energy use in your home is an energy assessment. It is a series of diagnostics for your home by a qualified contractor on more than 100 points of data to identity what improvements will give you the biggest ROI. The primary goal of an energy assessment is to understand how your home is using and losing energy allowing you to make better decisions on home improvement that will save energy. Sign up for an energy assessment today.

Thermostat: As mentioned above, turning down the thermostat can make a big difference as well. But by taking it one step further and installing a smart thermostat, like a Nest, you can really save big time. According to the Flannel Guy ROI, even at a cost of $250, a smart thermostat will pay for itself halfway through year two and over 10 years will save you over $1,200!

How much is my rental worth? A guide for homeowners seeking to rent in Central Oregon

Whether you are just venturing into real estate investing or have owned multiple rental properties for years, pricing your rental correctly in a hot and constantly changing market can be a challenge. Charge too little and you’re leaving money on the table that could be used for maintenance, renovations and upgrades. Charge too much and your property could sit empty for months robbing you of income.

While there are many things to consider when pricing a house for rental, here are five main factors that can have the greatest effect on pricing: location, size, updates, amenities and comparables in the area. Let’s review each of these to see how they affect the price of your rental.

Location

This one is obvious and it’s especially applicable in Central Oregon and Bend in particular. For instance, the difference in price between similar properties on the east and west side of Bend can vary dramatically. If you’re new or unfamiliar with the area, Bend is roughly divided in half by Hwy 97. For various reasons (walkability, towering Ponderosa pines, less traffic), properties on the westside of Bend carry a premium and will typically rent for more than similar properties on the east side of town.

Rental properties on Bend’s east side will generally have more square footage and smaller yards than on the east side; however, you will be closer to Mt. Bachelor and other attractions on the west side.

Size

For the past few years there has been a surge in new home construction in Bend, especially on the east side of town. Many of these homes have similar floor plans and are generally 3/4BR, 2/3BA and about 1,600 sq ft to 2,200 sq ft. Most have two car garages and relatively small yards around 700 sq ft. Families with kids and pets will be often be attracted to homes in this size range.  

While there is some new construction on the west side, most renters will be expecting to rent slightly smaller, older homes or pay a premium for the newer, larger homes.

Updates

According the the National Association of Realtors, upgraded kitchens and bathrooms are among the more important upgrades renters look for in home. Not only do newer refrigerators and dishwashers attract more renters, they are more energy-efficient and less costly to operate.

Hardwood or engineered flooring is more attractive to those who suffer from allergies, it lasts longer and is easier to clean than carpet and can be refinished instead of being replaced.

Amenities

Some amenities that can affect rental rates are within a homeowner/landlords ability to change; others, not so much. For example, views and walkability factors are mostly beyond the landlords control. But things like stainless appliances, washer/dryer, allowing pets and even landscaping. Buildium, a property management software, says the benefits of having an outdoor landscaped space can provide a short ROI and fetch top rental rates by attracting more qualified rental applicants.

Comparables

We all know what comps are and they can be the single most important factor when determining your rental rates. With so many online tools at their fingertips, renters can quickly determine the rental rate ranges in a particular area. Renters will also often not consider the outliers; those properties much higher or lower than the average.

Elevation Property Management can help your property stand out from similar rentals to ensure it rents quickly, attracts the most qualified applicants and earns you the best rental rate possible. Contact us today to get a free rental analysis on your property.