5 Common (wrong) assumptions about living in the country

[Colts4me]

neighbors are like that and you have more neighbors in the city than on the farm.

 

[The Heretic]

True, but it results in a trend where it becomes too expensive for working people to iive in the rural areas within commuting distance of cities. Notice that most houses built in these rural areas are pretty expensive.

The same trend appears within the cities, where "gentrification" is driving the working people out of close-in neighborhoods.

It even gets harder to leave your land to your kids, since estate taxes are not indexed to inflation.

I paid about the same for my 20 acres plus house plus shop that my kids did for their house in town. No granted, my house is not as nice as theirs; not even close, but I've got a shop and acreage my house is quite livable and their plot is a fraction of an acre. Everybody who works on my road, works in town. It is an hour commute for me each way, and sometimes that gets old, but it is the price I pay to live somewhere that lets me keep my sanity.

As for estate taxes, Oregon state exemption is $1M, federal is $5.5M - you have to have a good sized farm for those to kick in, especially if the estate is divided up between multiple people. A lot of farms around here are multiple tax plots. Not sure, but I would not be surprised if you could spread out the estate over multiple years with the multiple plots.

 

[FortRock]

My best buddy has lived in the Bend area off/on for 40yrs. His house used to be on the outskirts north of town, where the KOA was and hardly anybody else. Then more and more houses over the years. He had two outbuildings/shop and kept a backhoe, a front end loader, some forklifts, etc and did a lot of work there. His neighbors complained so much that he developed his property into houses (9 lots... lost his butt thanx to the city changing demands), and moved out north of the Bend Airport on 10 acres. When he went to build his house, the city came out and gigged him for all his unpermitted outbuildings and electrical. Oh my

Just sold my place in Bend. It was getting crazy. I had 1.25 acres just south of town for 24 years. We were set up for shtf, but hoards of Cali urban dwellers started buying the places up. I had a guy come up my drive way and ask me for some of my firewood. Told me that surely I had more than enough and more than I would ever use. He didn't understand (well... a lot of things) that we used 3-4 cords per winter to heat the large house. Last time I burned my pine needle burn pile a new guy in the next house over ( wearing his cute Cap'n America cowboy boots) (as he lit a cigarette) started yelling at me that smoke was coming over toward his house and smelled bad. Shortly after that the fire marshal showed up. He looked around and determined that I was burning within regulations. The "neighbor" started yelling I should have waited for a day when the smoke would have gone straight up. The guy probably would have had a stroke if he knew how "prepared" we are. The neighborhood was changing fast. My house was on the market 2.5 days before we had a full price sale. I am stuck in a "sub" urban setting now temporarily due to other factors (work and health). My youngest is maintaining our rural property in a state east of here. When we can run, will probably sell this and that one and buy a chunk of ground. When social disruption occurs, it happens suddenly and can have severe outcome. Like Andy said, gotta be adaptable. Get your basics down regardless of where you inhabit. God speed all....

 

[rupey7]

TR said "Speak softly and carry a big stick", I tend to agree!

 

[mrp59]

Everything the cities need to survive has to be brought to them.

 

[CoastRange57]

Just a point of view, what drove property values up so high?

Inbound migration of people from other states. Oregon is # 2 on the destination list when United Van Lines polled 110,000 clients last year.

The PDX area has 30,000 people a year moving there. The Central Oregon market has about 4,000 moving there. I am sure the Willamette Valley and Southern Oregon areas are seeing similar growth. Washington County had a 9% increase in real estate prices this last year. Hopefully the same this year, since we are selling next year.

Those increases means my new shop in Central Oregon will be what I want and the retirement accounts get a good shot too.

 

[The Heretic]

Inbound migration of people from other states. Oregon is # 2 on the destination list when United Van Lines polled 110,000 clients last year.

The PDX area has 30,000 people a year moving there. The Central Oregon market has about 4,000 moving there. I am sure the Willamette Valley and Southern Oregon areas are seeing similar growth. Washington County had a 9% increase in real estate prices this last year. Hopefully the same this year, since we are selling next year.

Those increases means my new shop in Central Oregon will be what I want and the retirement accounts get a good shot too.

Ditto.

I am selling a few acres to my neighbor and readjusting the property lines to account for his easement (WA county used to not allow this area to adjust property lines, so he paid for an easement before I bought the property). This might take the value down a little making it a bit more affordable, but not as much as I will get from selling him the acreage. As long as you have a minimum acreage, the total value of the property may be about the same - i.e., someone buying a property for a residence may pay $450K whether it is 10 acres or 15 acres.

I am thinking that if the value increases too much then it is harder to sell, especially if the buyer has to get a 'jumbo' loan. Between the timber sale and the decreased acreage the value should stay under $500K and then there will be more buyers.

The other factor is that I want to sell while the market is up naturally; 2.5 years from now I plan to retire so I am hoping there is no dip or downturn until after that. I bought this property during a low and then it immediately started appreciating, so I got a decent price on it, but that can happen again. As long as the local economy continues to do well and interest rates don't go up too much...

The plan is that this property will be the first and only mortgage I will ever have - I will take the cash from this (hopefully the full value of the property if the timber sale is as good as the logger said) and buy/build my next property and maybe even have something left over and never have a mortgage again.

 

[CoastRange57]

I
The other factor is that I want to sell while the market is up naturally; 2.5 years from now I plan to retire so I am hoping there is no dip or downturn until after that. I bought this property during a low and then it immediately started appreciating, so I got a decent price on it, but that can happen again. As long as the local economy continues to do well and interest rates don't go up too much...

I think you will be fine. I do not see any kind of downturn or major correction in the market in that time. As long as the inbound migration stays up there, the demand will be there. The mortgage paper market is pretty safe, and inventory's of property are low and there is a fixed capacity to add new starts, and that will not increase much.

Yours and mine property's will have different buyers than suburban cookie cutters, but they are out there. If the market goes up another 9% then that is another 60K in my pocket. My Central Oregon property is paid for, the 1,700 sf house will cost about 168K and the shop 40K site improvements 80K. All in 260-280 no mortgage and 100K in the bank. Well, I will probably buy a couple more lots with
some of it.

 

[The Heretic]

Agreed, but then stuff happens and plans don't pan out. Just crossing my fingers and not jinxing it by counting on it happening just the way I plan. I did not plan on a timber sale, much less one that would pay off my mortgage, so maybe it will be even better than I planned (original plan was to take out a short term mortgage if necessary, and/or build only a shop with living quarters). We'll see.

Buyers coming up from Calif. are often flush with cash and that tends to drive up the prices near job markets and popular areas (vacation home areas like Bend). Jobs help too. I moved back down here from Seattle just as the PDX job market started really growing and now real estate is booming, even where I am.

Yes, most people will buy closer to their job, but some people will be attracted to a nice place in the country. I may be an hour out from downtown PDX, but only 25 minutes from Beaverton or Hillsboro and that is tolerable for many people.

 

[NW Backpacker]

Agreed, but then stuff happens and plans don't pan out. Just crossing my fingers and not jinxing it by counting on it happening just the way I plan. I did not plan on a timber sale, much less one that would pay off my mortgage, so maybe it will be even better than I planned (original plan was to take out a short term mortgage if necessary, and/or build only a shop with living quarters). We'll see.

Buyers coming up from Calif. are often flush with cash and that tends to drive up the prices near job markets and popular areas (vacation home areas like Bend). Jobs help too. I moved back down here from Seattle just as the PDX job market started really growing and now real estate is booming, even where I am.

Yes, most people will buy closer to their job, but some people will be attracted to a nice place in the country. I may be an hour out from downtown PDX, but only 25 minutes from Beaverton or Hillsboro and that is tolerable for many people.

If I were retiring in 2.5 years I might put a for sale sign on it with a HUGE price, just to see if you get lucky and can relieve one of the Californians of some of their cash. Bank the proceeds, and rent. Then you don't have to worry about it. If you don't get any takers, that's OK, you are in no hurry. Of course if hyperinflation takes off and prices rise 20% per year, then you may lose out on some profit.

I'm the worst investor I know so do your own thinking.

I have noticed a lot of nice higher-end property with land for sale in the hills around Helvetia (north of Beaverton/Hillsboro). I'm wondering if the smart money knows something that's prompting all these sales:
Helvetia Real Estate - Helvetia Homes For Sale | Zillow

 

[The Heretic]

I have a timber sale in progress - that will take at least a year to finish and cleanup, maybe longer as the replanting will not start until the coming winter at the earliest. So I have a lot of work to do on that - including burning the slash piles and spraying to make sure the planted trees survive. I am still cleaning up from the last timber sale which was 4 years ago (albeit, that included some landscaping because it was around the house).

I have a number of other improvement projects going on to maximize the appeal of the house and property, so I have to finish those while holding down a full-time job. So I will be lucky to get it all done by the time I retire, if then.

 

[Mistman]

How many acres are you having logged Heretic? Mostly fir? I logged about 7 acres 10 year ago, mostly fir but a bunch of maple and alder also. I had some older Doug's that were starting to get too big for the local mills. Unfortunately prices weren't great and we really didn't do all that well on the sale + replanting. Are you under a deferment? We weren't/aren't (don't like people telling me what to do). I've heard prices aren't bad right now, I'm about 10 years out from another cut.

As an FYI my property was featured on the 1st season of Ax Men. Mike Phil logged it, they called it the Nail Patch. The fellers kept trying to get me to sign a waiver to allow filming on the property. I didn't get it, couldn't figure out why guys w/cameras were following the cutters around. I finally signed so they would get to work.

 

[The Heretic]

I am doing ~7.5 acres on the backside of my property (away from the house). There is a gully between that acreage and my house, and there will still be about 10 acres of trees on the house side - but during the winter the cut will be noticeable, also more light will come thru there but there will still be a good wind break and shade during the summer.

It is mostly fir/etc., but there are 30+ cedars that are 80+ years old that are going for twice what fir/etc. goes for. Apparently right now prices are high due to all the wildfires/etc. last year.

I am hoping for enough to pay off my mortgage, but if I get at least enough to buy land for my retirement home (which I think I will get at least that much, probably more) then I will be happy. Even better if I can have a shop built on the land with living quarters - then I could move there immediately after selling my property.

I just have to see what happens and be flexible. I am also selling ~2 acres to my neighbor. Between the timber cut and the smaller acreage, the value will go down, but not a lot - it will make it easier to sell IMO as more people would be able to buy it. I am living in a nice custom triple wide, but I could easily see someone wanting to build a custom home on the property - there are multiple home sites where a large house could be built while the new owners live in the manufactured home.

I am not under a deferment - the trade off would have been lower property taxes but then I would have had to pay those taxes when the timber was cut. A deferment is good if you have quite a few years until cutting, but all of my timber is 60+ years old so more than ready to cut.