With 2021 behind us, 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. We are convinced that real estate should be the foundation of your financial security. Does real estate figure into your 2022 New Year’s resolution? Here are some suggestions for consideration in your real estate related resolutions:
1) Buying Your First Home: Homeownership is the quintessential American dream and is also the top goal of most Millennials. Homeownership represents the foundation of personal freedom and the major source of savings for most Americans. Since we all need a place to live, we can either rent or we can own. Owning is the first step to building equity and financial security. Many have built their wealth through it. However, owning a home does come with a lot of responsibilities and isn’t for everyone. The price escalation of the last 2 years has also made that starter-home dream elusive for many. Are you ready to take this step in 2022 for your financial future? We can help you get started.
2) Selling: Do ever-changing priorities and plans make you think about selling your home? Is it time to re-evaluate your investment properties? The significant price appreciation over the last 2 years has many homeowners considering making a change. Increasing property taxes, insurance premiums, maintenance costs, and potential capital gains tax changes, have some investors considering cashing out. In this fast-changing 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 change over time, and where we live can affect the quality of our lives. The stay-at-home months of 2020 highlighted the importance of our homes. They have become the sanctuary where we live, work, and school! 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 bustling Downtown Orlando, trendy Milk District, scenic Winter Garden, 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? Do you need an office? 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 became filled with storage, we knew it was time to upsize. Moving to a larger home now has increased my family’s quality of life in every way. It also made our quarantine much easier in 2020. 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 through services such as Airbnb and Vrbo.
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 20 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 goals have included portfolio diversification, capital preservation, cash flow, and equity appreciation. 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. With the current investor interest rates still so low, it is still a great time to buy. We have been real estate investors ourselves for many years and we are happy to share with you our personal 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. We have been on this course personally for over 10 years now. It’s never too early, or too late, to start!
9) College Savings Plan: 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. Our daughter will be going to law school in 2 years. We already know which property we will use to fund her education!
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. Also, we love referrals!
Until next month,