A lifestyle choice: Real Estate vs. Life’s Other Luxuries
I was reading the real estate section of the NYTimes.com when I saw this article "At Home in Berlin". It is about the latest real estate investment of a couple; Mr. and Mrs. Brown, a 700 square foot apartment in Berlin, Germany. They have a primary home in San Francisco and also a 1,200 square foot apartment at the edge of Central Park in New York. Berlin is a familiar territory for them. Mrs. Brown grew up in Berlin. It is also the place where they met 40 years ago.
One thing that struck me while I was reading their story is their lifestyle. They don’t only buy properties for investment purposes, but also for their own enjoyment. At present, they can use their investment property for their own pleasures. Meanwhile, when the right times comes, they can sell it for a profit.
This is a good example why it is better to invest in a property compared to buying luxury items such as cars. Real estate will appreciate over time, while cars depreciate in value. If you have the money, it is better to save for a deposit for a property rather than buying a new car. Your real estate investment will enable you to buy a car later on, but your car won’t buy you a property.
Thus, I applaud my friend who visited me over the weekend for being smarter than her co-workers. She was telling me that in her profession, most of her colleagues are sporting brand new luxury cars. In her group, they tease her for buying second hand cars.
I told her not to mind them. Even though she buys second hand cars, she buys the newer models that are almost as good as new. The loss of the original car owners was her gain. To add, this allowed her to have more money allotted to buy a property at a good location.
How about you, would you spend money on a car and travel or save for a property deposit?
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