Two years ago I was with a colleague, a lawyer who is also a real estate practitioner and this topic came up for discussion, It has been an age-long debate, the debate “Is buying a home an asset or a liability”

Today, I would like to share my thoughts on this matter Let’s start by defining the terms simply;

A home is any physical structure where you live, it may be rented or owned

An Asset is anything that increases our CASH balance

A liability is anything that decreases our CASH balance

In essence, an asset is something that puts money into your pocket while a liability is anything that takes money out of your pocket

Hence from a cash flow perspective, a home is a Liability because from purchase or construction to maintenance takes money from you.

Or is that so? Is there an alternate view on this?  Read on.

One of my mentors, Robert Kiyosaki in his book RICH DAD, POOR DAD popularized this concept and I have ever since strongly held on to this until I was directly exposed to the real estate industry

Now before I enumerate my recent realizations let me state that, Robert Kiyosaki and anyone who holds that, ‘A home is a liability’ are not wrong. Objectively they are right.

But, buying a home is not entirely objective, there are strong subjective undertones and that is the

basis of my thoughts;

  • Analyzing “buying a home” from a “Cashflow” only perspective is limiting and serves only accounting purposes
  • Buying a home captures and holds value, the money you put in is there.
  • The satisfaction, comfort, happiness, peace of mind that buying a home brings cannot be quantified, put into a balanced sheet or valued hence its impact on the homeowner is not appreciated
  • Your home increases constantly in value (in compounding interest) as far as it is maintained

So in my opinion subjectively, a home is an Asset.

But if you are not still convinced, here is a hack;

Buy a home with a unit that can be rented out, so objectively and subjectively your home can remain an asset.

You can do this by buying a property with Boing Luxury Estates, we have prototypes that allow for homes with rent-able units.

Check here for our estates and make a choice.

Till next week

Have a blast!

1 Comment

  • Mr. Joshua Edams
    Posted November 22, 2019 3:07 am 0Likes

    Awesome! I’m so much impressed with the architectural masterpiece your company has produced so far especially here in Abuja.

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RYUICHI KUSHIBIKI is the President of TOYO KAIHATSU Co Ltd, the 48th President of JCI SAKATA in 2014, and the Director of Blue Border Co Ltd. RYUICHI is supporting real estate investment in Japan and in the world as a real estate consultant. He is a member of the development support committee of the Japan Junior Chamber International Senior Club. RYUICHI is also the Chairman of Community Service SAKATA CHUOU Rotary Club, the 2800th district.

Olusola Akingbasote is the Principal Partner and CEO of Asokay Real Estate Limited.

He had practical experience with Ken-Fem Nigeria Limited; a firm of building Engineers. He was the Chief Project Manager for Peter Okolo & Company Abuja, where he supervised the successful development and marketing of the Fatima Gold Estate at Karu Abuja.

He is an Associate Member of the Nigerian Institute of Management (AMNIM), a member of Nigerian Institution Of Estate Surveyors and Valuers (NIESV)and a member of Real Estate Developers Association of Nigeria (REDAN).

He is an asset acquisition consultant with Total PLC.

Mr Akingbasote Olusola has over 23 years experience in Real Estate, his area of strength is Estate Surveying, Estate Valuation, Pre-investment appraisal, Property management and project Management.

TAKEO SEGAMA is the CEO of Seek Edge Limited, the Chairman of Emirate Japan Marketing Council, Japan. He graduated from the University of Japan with degrees in Public Finance and Economics. SEGAMA manages investment and consultant companies in multiple countries. SEGAWA has a great network with top Japanese scientists with his broad knowledge of science and technology. He has extensive knowledge about the world economy, international market, financial analysis, and international tax system. he was the Head of Mizuho bank's funding and risk management team during the 2009 economic crisis and won the two CEO awards.

ORY-MARTINS A. is An MBA holder with over 15 years of management and property consulting experience. GMD Boing Group. Principal consultant, Inicreat PMA Ltd and the CEO / President of Nigerian Real Estate Partners – NREP.
He is faculty member of Nigerian Institute of Management Fellow, Institute of Management Consultants of Nigeria And the Initiator of The Real Estate on Radio with Orymartins.

Ory Martins is a Certified National Trainer (CNT) and a Graduate of the Head Trainer Course of JCI Training, USA. He is a JCI Senator.
Due to his numerous Real Estate Achievements, he was recently inducted into Japanese Property Management Association, in far away Tokyo.