Why Purchase Real Estate

Real estate is defined simply as “property consisting of land and the buildings on it”[1]. This means that grassy spot off the highway is considered to be real estate and conversely the sky-scraper in mid-town Manhattan is also considered to be real estate. However, human beings did not always look at real estate the way we do today.

For most of humanity, humans did not believe that one person had the right to own what was provided by nature and for a great period of time society was based on the hunter-gatherer model. Consequently, humans followed the paths of the animals that they hunted and fled the areas that did not promote their survival, so they were always on the move. The moment conditions changed in their environment, they moved on. The concept of staying in one spot for an extended period of time may have seemed stupid to say the least. Consequently, the idea of a permanent abode was not even a consideration at that time.

Around 15,000 BC human society shifted for the most part to an agrarian society[2], one in which land was cultivated for agriculture. In other words, man developed weapons and tools, and remained in one place; they also cultivated the land and used weapons to fight the predators that stalked them. This is where the concept of landownership, which ultimately turned into home ownership, became popular. Initially, the strongest staked claims to the best lands, then kings and kingdoms were developed. Kings (in their opinions) were given dominion over the land and its people by the authority of God. As a result, the king or queen could bestow ownership of any piece of land to whomever they chose. Some gave land to loyal soldiers, to mistresses, to secret lovers, and a host of other people for one reason or another. The salient point here is that the concept of landownership became fixed. Land now became valuable and the more land you owned, the more wealth you could accumulate. You could do many things with the land you owned such as rent it to poor farmers and charge them rent in the form of a percentage of the crops they grew, money, or in many cases both. You could also farm the land yourself and sell your produce. From that time until now, some of the wealthiest people on this planet have been landowners.

This brings us to today’s society. Here in the USA, a part of the lure called the American dream, is the ability to come here with nothing and use your wits, skills and street smarts to achieve anything your mind can think of. To many individuals one major goal was to own a home because the same concept that held true thousands of years ago, holds true today. Some of the wealthiest individuals on the planet possess significant amounts of real estate. The nuance is that today a regular guy or gal, can get a loan from a bank and use that money to purchase a home. In ancient days, only certain people could own real estate.

Today, anyone can take the steps to become wealthy through real estate. The value of real property continues to appreciate and has proven to be a steady asset regardless of external market pressures. There have been downturns in the real estate market, but the value almost always returns and then continues to appreciate. During the downturns, you can simply rent out your property until the market bounces back. Therefore, owning real estate is a win-win strategy. As a result of these characteristics, owning real estate can assist with the following:

• Generational wealth creation
• Store value
• Retirement planning
• Portfolio diversification
• Supplemental income

Ultimately real estate can be used as a tool to achieve the American Dream!

[1] Google Dictionary

[2] No longer Nomads: The History of Real Estate by Andrew Beattie