If you’re an Eastsider, you are living in an interesting time… at least from a Real Estate perspective.
I’m talking, of course, about the announcement from Amazon to build their largest building in the entire company in Downtown Bellevue. After that information was released, it was also uncovered that there are plans for a Phase 2 companion building next door that puts something north of 10,000 Amazonians to the east of Lake Washington.
Couple that with the construction of the light rail corridor slicing its way from I-90 through Bellevue, and a perfect storm is brewing for Real Estate opportunities.
Now here’s the part where I need to insert a disclaimer. The ideas I’m about to present are not for everyone. I get that. It’s going to take a little imagination and an open mind. Ok, so what are we talking about?
Group 1: Empty Nesters.
There are thousands of bedrooms on the Eastside that currently go unused for their intended purpose. Where once a human being lived, there are now offices, yoga studios, art rooms, even gift wrapping stations. Oh, and don’t forget the good old junk room that stores that treadmill from 1993. Good times.
The next 24-48 months are a perfect time, in my opinion, to take a hard look at your real estate holdings. If you are rattling around the family home with a fraction of the previous people living in it, you might consider a few possibilities for income.
You could rent out a room or to create a more formal apartment with its own entrance. You are most likely sitting on a pile of equity in your home. You can unlock some of that equity with a HELOC (home equity line of credit) to finance this project. Each situation is a bit different, but it’s quite possible to create a positive cash flow situation and increase the value of your house at the same time while also providing much needed housing.
Another idea for Eastside empty nesters is to sell. For all the reasons I just mentioned, selling could unlock a new chapter in your life. Free up a lot of capitol, downsize into a smaller place, and release your house to its highest and best use. In other words, a four bedroom house has people in four bedrooms.
There are a lot of emotions tied up into that last paragraph. I get it, it’s a very big deal. If you want to see what your current place is worth and start thinking about the next phase, shoot me an email and we can start dreaming: firstname.lastname@example.org.
Group 2: Investors
If you’ve done well over the years and you have some capital, this could be the time for you to invest in Real Estate. Having a rental property sandwiched between two of the most valuable companies in the world is a once in lifetime opportunity. When was the last time you had two juggernauts of industry so close together?
Having a nice 401(k) is great. It’s fun to open up the website and look at all the charts and graphs. It’s a totally different thing to own a piece of real property. Being able to drive by your rental house is just more tangible. For many people, it makes investing “real.” You can see the mortgage balance going down (and being paid for by your renters) while the property value is going up. What’s not to like? (Disclaimer number 2: obviously not all properties go up and up forever. People can and do lose money in rental properties. It’s similar to the stock market.)
Owning rental property is not without challenges. Your diversified mutual fund doesn’t get a leaky roof. Investing in rental property isn’t for everyone, but I believe there will be some amazing returns for Bellevue and Kirkland investors that get into the right kind of properties in the near future.
Again, shoot me an email if you want to start exploring the possibilities- no pressure. We can start to lay the groundwork and figure out a game plan that works for you.
Group 3: Tech People
If you find yourself on the other side of this equation and will be needing housing on the Eastside, why not be an owner instead of a renter?
“But I don’t think I can swing that right now…” Maybe you can’t buy a house by yourself, but there are all kinds of ways to find a partner. You could partner with your parents who are in one of the above mentioned categories. You could partner with another tech worker or with a few friends. You spread out the risk, and if you have good partners, it can be a very rewarding experience.
The biggest mistake people make is not structuring the partnership the right way. If you set it up correctly out of the gate, there are ample ways to protect everyone’s interest and start building a portfolio of assets while you’re building your career.
Boston in the 1800’s, San Francisco during the gold rush, Detroit in the 1940’s, and now Seattle and Bellevue in the 2020’s. Something special is happening right now in our area. There are opportunities to be had. I hope you don’t find yourself saying, “Ahh man, I should have bought that rental when they were building the light rail. What was I afraid of?”
Ron Upshaw is a licensed real estate broker with Windermere Midtown and a member of the National Association of Realtors.
If you are buying or selling your home – or find yourself in need of an agent, you can reach him at email@example.com