The True Cost of Location: What Most Buyers Miss
Beyond the Sale Price
When shopping for your dream property, the listing price is just the beginning of your financial story. The hidden costs of buying land can dramatically impact your budget—both immediately and for decades to come. As a real estate professional who has helped hundreds of clients navigate these waters, I’ve seen too many buyers focus solely on the purchase price while overlooking crucial location-based expenses that can add hundreds of thousands to their long-term costs.
Today, I’m pulling back the curtain on these hidden expenses with a real-world comparison between two neighboring Oregon counties—Jefferson and Deschutes—to show you exactly how location affects your bottom line.
The $300,000 Location Decision: Jefferson vs. Deschutes County
Let’s look at a practical example: building the same 2,000 square foot, 3-bedroom, 2-bathroom home on a 5-acre property in two different Oregon counties. The upfront purchase price might lead you to one decision, but the long-term math tells a completely different story.
Permit and Development Fees: The First Surprise
Jefferson County Building Costs:
- Building permit fees: $8,500-10,000
- System Development Charges (SDCs): $2,800-3,500
- Total upfront fees: $11,300-13,500
Deschutes County Building Costs:
- Building permit fees: $12,000-15,000
- System Development Charges: $19,000-26,000
- Total upfront fees: $31,000-41,000
That’s a difference of up to $30,000 before your foundation is even poured—enough to completely upgrade your kitchen or add significant landscaping.
Property Taxes: The 30-Year Burden
The real eye-opener comes when we look at ongoing property taxes:
Jefferson County:
- Average tax rate: 0.9% of assessed value
- Initial annual property tax: $5,400
- After 30 years: approximately $19,600 annually
- 30-year total: approximately $307,000
Deschutes County:
- Average tax rate: 1.2% of assessed value
- Initial annual property tax: $10,500
- After 30 years: approximately $38,100 annually
- 30-year total: approximately $596,000
The difference? A staggering $289,000 over 30 years—nearly enough to buy an entirely separate property in many parts of the country.
Why These Hidden Costs of Buying Land Matter
Monthly Budget Impact
That $5,100 annual tax difference means approximately $425 more in monthly expenses for the Deschutes County property. This impacts:
- Your monthly mortgage payment
- What home price you qualify for
- Your long-term financial flexibility
Long-Term Wealth Implications
The combined difference of $320,000 (including permit fees and 30-year tax difference) represents:
- College education for multiple children
- A substantial retirement nest egg
- Investment capital for additional properties
- Earlier payoff of your mortgage
What Drives These Location-Based Cost Differences?
1. School District Funding
Different school districts have varying tax levies, which can significantly impact your property tax bill. Higher-rated school districts often come with higher tax rates.
2. Infrastructure Development
Rapidly growing counties like Deschutes often charge higher System Development Charges to fund roads, utilities, and public services for expanding communities.
3. County Services and Amenities
Counties with more extensive services (parks, libraries, emergency services) typically have higher tax rates to fund these amenities.
4. Growth Management Policies
Some regions use fee structures to control growth or fund specific community priorities, creating substantial differences between neighboring counties.
Smart Buyer Tips: Evaluating the True Cost of Location
1. Research County Fee Schedules
Before making an offer, obtain the county’s fee schedule for:
- Building permits
- System Development Charges
- Impact fees
- Connection fees for utilities
2. Calculate Annual Property Tax Impact
Don’t just ask what the current owner pays—estimate what YOUR taxes will be by:
- Consulting the county assessor’s office
- Using the county’s tax rate applied to your expected property value
- Accounting for any exemptions you might qualify for
3. Consider School District Boundaries
Even within counties, school district boundaries can create significant tax differences. A property just across a district line might save you thousands annually.
4. Investigate Special Assessment Districts
Some properties fall within special districts for water, fire protection, or other services that add additional tax burdens. These aren’t always obvious during your initial property search.
5. Project Long-Term Costs
Work with a knowledgeable real estate professional (like us at SiteFacts) to project these costs over your expected ownership period, accounting for typical increases.
Due Diligence Checklist: Your Action Plan
✓ Contact the county planning department for fee schedules
✓ Speak with the county assessor about potential property taxes
✓ Identify all special assessment districts affecting the property
✓ Compare multiple locations using 5, 10, and 30-year cost projections
✓ Factor these costs into your total budget before making an offer
Total 30-Year Cost Comparison
Building and owning the same home in Deschutes County costs approximately $312,600 more over 30 years compared to Jefferson County.
Conclusion: The Informed Buyer Advantage
The true cost of property ownership extends far beyond the purchase price. By understanding how location impacts your upfront and ongoing expenses, you gain a significant advantage in the real estate market. What looks like a great deal initially might cost you hundreds of thousands more over your ownership period—or vice versa.
