We thought so too. Before we went into property management. But our experience has taught us so much.
One of the most valuable lessons is to go back to basics - it’s where the good questions live and where good answers await to be discovered.
So... what is a house?
It is a building (duh - obvious)
Think about it, though. A building is already SO many elements put together.
For starters, there isbuilding infrastructure: beams & concrete; roofs; brick walls.
Then there’s internal habitation features. One layer includes floors & ceilings; another includes tiles, fixtures and other materials such as wood and/or marble.
Utilities infrastructure - cables, plug sockets, switches & panels to distribute and regulate electricity supply and phoneline access; pipesfor water, sewage and heating.
These connect appliancesfor core functions, such as heating, hot water, refrigeration and cooking.
Next up,insulation; dry wall, aluminum, wood & glass (casings for windows and doors) for sound & heat-proofing; foam & rubber (mostly in roofs, but also supplemental fixtures on window & door casings).
Decoration & furniture to satisfy aesthetic criteria of a certain time and place...
It is a basic necessity - this is what generally guarantees an upward trend in price, especially in developing urban areas where the demand increases with the landscape’s expansion.
Investing in real estate either solves the basic issue of habitation for you or becomes the simplest form of passive income via sale or leasing. There can generally be better or worse times to make a move in this industry, but generally, short of a war, as we said, real estate investment is a good move.
Which makes it...
... an asset(NOW we’re talkin’)
It can be priced, which changes through time - mostly upwards - and this makes it an investment.
It can be owned, bought & sold
Clear and accurate title deeds are an important aspect of real estate transactions!
It can be taxed
As an owner, you will have to report your property ownership in your tax returns as well as any income earned by that ownership (i.e. rental income from leasing).
... and a joy (or not)Ok, it’s more difficult to quantify experience.
But here’s the thing. Empirically, whoever has lived in both a substandard home AND a suitable one has similar things to say about the difference between the two: ‘deep sense of satisfaction’, ‘major lifestyle change’, ‘feeling welcome’. Putting a price on this feeling is difficult, but it’s definitely what you end up paying for!
This article is inspired by common situations we have encountered in over 100 properties during the last 5+ years. We have frequently advised tenants and assisted owners on all the above points, ensuring that our properties make good homes for tenants, provide a healthy return for investors and appreciate in value for sellers.