skforce wrote:I pay 80,000 ksh rent. I used to own a house, but never made sense why I should live in house worth 20million and its not really doing anything for me. Sold the house and went into business, buying and selling land. I have a plot in a prime residential area, everyone tells me I should build a house there, but when I do the maths, it does not add up. It will cost me about 15million to put up a house fit for the area.
Why waste capital building a house while I can invest the same and make much more money. To me, it makes sense to pay rent.
Is my thinking warped??
Yes!
Instead of selling the house: assuming capital for business was the motivation, why not mortgage it or use it as collateral to finance your business.
Since you are in real estate you already know that the land the house stands on does not depreciate and even in some cases, a well built and maintained house depreciates at 3% annually either.
Also to consider is life upon retirement when income is reduced or flat-lined and you work less and probably spend more on medical, traveling, vacationing, etc....
Besides that alot of the things we do it is NOT because of money, but rather it is for the things that money can buy. What are the things you want in life that money can buy ?
If a house is one of them, by all means go for it!