What you should know about country homes
One of the investments I am yet to come to terms with is the rationale behind the decision by some people to build magnificent and very expensive country homes in certain locations. I have been privileged to see a few of such homes and some friends have shared their own experiences with me as well. In my quest to understand the reasoning behind the decision to make such an investment, many more questions were thrown up rather than answers. As real estate investors, we seek to learn and understand because there lays wisdom. Our search could lead us to opportunities we never knew existed and could also help us to make better decisions.
There are a few reasons that I have found quite logical that some have presented for making such an investment. First, some people consider country homes as their retirement home.
Once a person adopts this idea he or she will find it easier to justify the extensive investment that has to go into such a project. No one would like to build something small as a retirement home.
Secondly, there are those who desire to make a statement. Their reason is based more on ego than on investment analysis. Individuals who have a problem with self-worth usually need the prop of what they believe they have that others do not have to gain respect and admiration. They want to buy the biggest car and build the biggest homes not because they need it but because their self-worth is derived from such things. There are individuals who are living in rented apartments in the city where they made their money but have decided to build mansions that they rarely occupy for a whole year in the village in order to make a statement that they have made it.
Thirdly, there are others who have argued that they need the convenience of their own property whenever they visit the country side or their village which for many, is once in a while. However, if you can afford it why not give yourself the extra convenience and comfort that such possessions give. Moreover, should you have a personal function such as the burial of an aged mother or father you may need the house to accommodate some of your guests.
Fourthly, there is a more altruistic reason that considers such a project as one of the means of bringing development to those areas. The country home is seen by those who reason along this line as contributing to the aesthetic value of such communities. This is not an acceptable reasoning to others but whatever the case we need to consider the investment value of such a decision.
The challenges of making the significant investment in country homes especially when you are just starting out in real estate investment are numerous. In fact, if you are considering making the country home your first property investment, think again. Most villages or countryside properties may not appreciate in any significant way for years to come except something drastic happens in those communities.
If you are investing there because the land is cheap don’t forget that the location also is not going to grow your money. The cost of building in a good location and in a bad location are the same but the difference in returns could as distinct as light from darkness.
In addition, there is a huge maintenance cost that comes with having a big house in the village. Imagine the state a property that is inhabited once in six months would be and the work required making it habitable every time you need to use the property. The long vacancy time also exposes the property to undetected crime. For some, the challenge of managing a property far from their primary base is an unwelcome distraction.
It also appears to be contradictory that most of those investing in such properties do not consider the fact that unless their children are integrated into such communities and have a functional social life in that community, they are not likely to make use of those properties in future.
The properties are likely going to be abandoned if not taken over by those closest to the location with or without the approval of the absent or distant beneficiaries. Many of these properties have become a problem to the estate of the deceased owners.
In most cases, it is better to scale down the building of country homes to compact and functional designs. There is nothing to prove to anyone if you have good personal self-esteem. Do what you feel is right and reasonable based on your present resources and your future vision. Utilise your present resources wisely and invest in places that have the potential to give you the best returns on your investment.
PUNCH.
