Downtown Seattle Undressed

Lease Options (As it relates to the Seattle market)

Part I - Risk

According to www.websters.com, Risk is “the hazard or chance of loss.” Of course everyone wants to create sound investments that yield high returns while mitigating exposure and losses. To be perfectly blunt, EVERY investment has some sort of risk involved with it. If there were no risk or chance of loss, it would not be called “investing.”
Still, there are methods of investing that can create safe, steady, and greater than average returns when done properly.
It’s no secret that real estate tends to appreciate over time, no matter where you are. It would be extremely difficult, for example, to locate a property anywhere in the country that is worth less now than it was….say 50 years ago. Not to say this possibility doesn’t exist somewhere, but it would be an extremely rare case. The logical explanation for the appreciation that occurs in real estate is simple- They’re not building any more land these days, and the world population continues to rise. Property is a commodity, and everyone MUST have a roof over her head. Shelter is one of the basic human needs. According to data collected from the US Census Bureau, the number of people in the US is projected to increase from its current level of 285 million people to a level of 315 million by 2010. It may not seem like it, but 30 million is an awful lot of people to add to the books in the next 2 ½ years! This is just a case in point. Considering the big picture, if you own property, history shows that it will be worth considerably more tomorrow than it is today. It’s that simple. Furthermore, it is a well known statistic that here in the Puget Sound Metro area, property tends to double in value every 10 years. And typically, the highest rates of appreciation are experienced during the second half of every decade. This can be tracked over about an 80 year period. Without a doubt, this makes Seattle an extremely attractive venue in which to invest. When you think about it, the risk isn’t bad! It’s actually quite minimal. Our cycle is predictable and our returns are high. Of course, the flip side to our fantastic Seattle market is that traditional investing with the “cashflow” model does not work very well  Rather, our market springs forth an “appreciation” model, therefore requiring more out of the box thinking and a competitive edge.
So, “How do Lease Options relate to all of this?” you ask? Oh, don’t you worry your curls. We will discuss this later in our series.
Until then, just bare in mind that all investments present an inherent level of risk. It is up to you to invest wisely in a market that appreciates year after year, while minimizing exposure and risk to your hard-earned nest egg. If you want to play the game “risk free”, then I suggest you stick to Monopoly or Quiz Night at your local pub. 
Until next time,

Ciao