Build vs Buy

In the world of real estate investments there is a decision making point that many investors go through. Should I build or should I buy. There is that other topic also of leasing vs buying but I will be focusing on the former one in this write-up.

So what is the thought process behind this. Building would require finding some land, which has potential value. 3 points... Location, Location, Location. The eye for seeing the future. In this piece of land, that I would buy, what would be around it. Infrastructure development. Tourism. Amenities availability. How far away or how much in the city? You find the spot and then you build on it. Put the values in the equation, re-value your money invested today and the cost of money going into the future when the "build" would complete. Keep this number with you.

Now move to the buy option. This is where you have a pre-built thing which you choose. How is it priced? Is it worth what they are asking for? How much renovation or modification would I need to do? Are there are any loans on it? Is the building used as leverage for some loan? Try to value all of that and match this number with the earlier "build" number.

Decision time. Now choose.

While it may be seem quick straight-forward, I can assure you its not. This particular equation is what many people today make their big buck or simply earn their livelihood around.

But my debate today is what if the values are exactly the same. Build vs buy is equal. What to do now?

This is where I present to you my quote of the day.

"Some things are better built than bought"

Example - Relationships.

After boring you with the theory above, I would like to apply the concept to life or to be more precise, relationships. No matter how much you spend on a relationship, you can't make it work. You can't buy love, you can't buy sincerity, dependence, care. Somethings just can't be bought.

One important element that I didn't mention in the theory above was how building is so much more fulfilling than buying. You go through the process of putting the pieces together. Brick by Brick, see a plan come together. You learn about people. You learn about yourself. You cherish the whole experience much much more. Its definitely more fulfilling to build something than just going and picking it off the shelf.

So building a relationship is something like that as well. Take a husband-wife relationship as a really good example. Two individuals relatively unknown to each other come together to form a team. Learn about each other's strengths. Learn about each other's weaknesses. Where would they contribute to make each other stronger. It's this bond that keeps building as they keep supporting each other and building this bridge between 2 families. Then come the kids. Test of patience. Test of sharing the love. That's when they realize, the more they share, the more it multiplies.

The bond keeps going stronger. They live their lives together for each other and then become inseparable. Nothing can change this until death do them apart. How is that possible? How can a bond be so strong that only when they can't breathe do they become separate from each other? These things can only be built.

Try that by buying a relationship. You know what I mean. Marrying for money over love. Doesn't last long, at least there wouldn't be any happily ever after phrases in that relationship. Its fun for a while, but then its either no relationship or just a compromise.

No matter what the build vs buy equation tilts towards, some things are better built than being bought. Make a note. Apply. Prosper.