Happy New Year 2020!

We hope 2019 was a good and memorable year for you.  As we enter 2020, we wish you the full optimism, energy, and momentum that comes with the arrival of a brand-new year!  We have been updating and sharing with you this list each year as a matter of tradition and, as we do so, we continue to hope that real estate can be the foundation of your financial security.  Does real estate figure into your 2020 New Year’s resolution?  Here are some suggestions for consideration in your real estate related resolutions:

1) Buying Your First Home

Homeownership is still the quintessential American dream and is also the top goal of most Millennials. Homeownership represents the foundation of personal freedom and also serves as a major asset for families and individuals.  Since we all need a place to live, we can either rent or we can own.  Owning is the first step to building equity.  Many of us have built our wealth through it.  However, owning a home does come with a lot of responsibilities and isn’t for everyone.  Are you ready to take this step in 2020 for your financial future?  We can help you get started.

2) Selling:  

Do ever-changing priorities and plans have you thinking about selling your home?  Is it time to re-evaluate your investment properties?  In this matured housing market, it’s important to have a professional consultation when thinking about selling.  During seller consultations, one very important question we answer is when to act.  In a rising market, time is on the Seller’s side.  In a declining market, sooner is better than later.  We watch and analyze the market closely and are happy to share with you our insights so that you can make the most informed decision.

3) Change of Lifestyle

Our needs and wants can change over time, and where we live can dictate the quality of these many aspects. Do you dream of a different type of property or location?  The ideal home is different for everyone.  We’ve helped a family move out of a rigid HOA community and into a custom home on acreage. We’ve helped a family build their dream home on a lakefront lot where they watch sunsets over water and ski to their hearts’ content.  We’ve had clients that moved to Downtown Orlando, scenic Mount Dora, beautiful Winter Park, and oak-shaded Winter Springs where they experienced a renewed exuberance and excitement over everyday living.  We have so many of these stories and continue to be passionate about homes and what our homes can do for us.  We are partners in many of our past clients’ lives because we know how to help them make these transitions.  Have you been thinking about something different?  Let’s explore together.

4) Upsizing:  

Is your current home getting too tight? Do you have a growing family? The average move-uppers purchase a home 1.5 times larger than their current home.  For example, they move from a 2,000 to a 3,000 Sq Ft home.  When the 3-car garage of our previous home was filled with storage back in 2008, we knew it was time to upsize.  Having a larger home now has increased our quality of life in every way.  We are happy to have made the move and will be happy to help you too.

5) Downsizing:

Some of us are, or will soon be, empty nesters.  Do you have empty rooms or a pool that is never used?  Is the maintenance of a large home getting tiresome? Most homeowners downsize to simplify or lower the cost of living.  A common theme is to purchase a smaller home outright with the equity from the selling of the current, larger home.  Many may also downsize not necessarily to reduce cost, but to increase the quality of life, purchasing smaller homes in more desirable areas or into a newer, more upgraded home.  We can introduce new, special communities to you.

6) Vacation/Second Home:

If you’ve grown weary of spending your vacations in hotels and rentals, consider joining the nearly one million buyers across the country that purchased a second home last year.  This is a dream for many people.  After the hustle and bustle of a busy week, imagine a relaxing weekend at the beach or the “lake house” to recharge yourself.  Some clients have also shared success stories of renting out their properties part-time.

7) Real Estate Investing:

It has been said that the majority of the wealth in the United States has been made in real estate.  There are many facets to real estate investing.  We have worked with different investors over the last 18 years, from young couples fixing up one small home at a time, to sophisticated investment groups that purchase dozens of properties. Among our past clients, their various goals have included portfolio diversification, capital preservation, cash flow, and equity building.  Two things that can make real estate a truly unique investment vehicle is the amount you can leverage (borrow) and the fact it can generate income.  If a home is purchased with a 20% down payment and the rent pays the mortgage, that is an 80% leverage! Also, the fact that real estate can generate rental income sets it apart from most other investments. For most other investments to be profitable, they have to increase in value.  Real estate can be a win even if the value doesn’t go up.  Tell us about your personal goals.  We will see what we can do for you.  We have been real estate investors ourselves for many years and we are happy to share with you our experience.

8) Retirement Plan:

Some of our clients apply the principle above as their retirement plan.  They purchase properties whenever possible with the goal that upon the mortgage payoff, the rental income can support or supplement a comfortable retirement.  This is exactly what my parents have successfully done.  It’s never too early to start!  We are already teaching our children the importance of long-term planning.

9) College Savings Plan

I’ve given this example in the past.  Is there a newborn or a young child in your own or extended family?  Consider buying a rental home for the benefit of the child.  Let’s say you can do it with 20% down and a 15-year mortgage. When the child is 15 years old, the property will be paid off.  It can be sold for college tuition or other financial needs.  Or, the future monthly rental income can help cover the child’s expenses.  Even with a 30-year mortgage or other configuration, it is a significant head-start for your loved ones.  Or, what if your kid is already heading off to college?  Many parents have purchased rental properties around UCF for their kids and rent out extra rooms to roommates, which pays the mortgage.

10) Creative Use of Real Estate:  

Here is a creative way to look at real estate.  In 2014, I was in the market for a new car to replace the 10-year old family minivan.  However, a car is a depreciating asset, meaning it’s worth less each day you own it.  Whereas, for the most part, real estate is an appreciating asset.  So, in 2014 I bought a rental property with a down payment similar to what it would have cost me to buy the new car with cash.  This property generated the monthly positive cash flow needed to cover the monthly car payment.  So, in the end, I owned the property AND the car!

We sincerely wish you a happy, healthy, and prosperous new year.  As always, if you have any real estate related questions, give us a call! We are happy to discuss real estate topics even when it’s not business.

Until next month, take care!

                  – Yien and The Yao Team
Copyright © 2020 Yien Yao, LLC

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