Author Topic: eevBLAB #66 - Renting vs Buying a Commercial Office Lab  (Read 6790 times)

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Offline nctnico

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #50 on: October 28, 2019, 09:24:10 am »
for the same thing to happen to your home as well, do you think that's immune to the same possibility?
Homes can go fubar as well. At some point building new is cheaper (and a better investment) than fixing. With a commercial building as an investment you have to see if it is worthwhile to upgrade the building or only do necessary repairs. It is all numbers. It is no use to invest in a building if there is no ROI no matter how much you'd like to keep the building in good shape.
« Last Edit: October 28, 2019, 09:29:58 am by nctnico »
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Offline nctnico

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #51 on: October 28, 2019, 09:28:19 am »
But think about it: are you a real investor with just one investment?
:palm: Seriously?
I only have one business, guess I'm not a businessman...
Having only one investment is similar to having a business with only one customer. Like a freelancer who works for years at the same customer. On paper the freelancer has a company but he/she is effectively an expensive employee which can be fired at any time without anything to fall back on.
« Last Edit: October 28, 2019, 09:31:34 am by nctnico »
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline EEVblog

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #52 on: October 28, 2019, 01:50:01 pm »
But think about it: are you a real investor with just one investment?
:palm: Seriously?
I only have one business, guess I'm not a businessman...
Having only one investment is similar to having a business with only one customer. Like a freelancer who works for years at the same customer. On paper the freelancer has a company but he/she is effectively an expensive employee which can be fired at any time without anything to fall back on.

Saying that only having one investment is not an investment because you only have the one is the dumbest thing I've heard in a long time.
You aren't invested in the share market because you only have shares in one company.
You aren't invested in the commodities market because you only own one commodity.
You aren't invested in the classic car market because you only have one Ferrari 250 GT California.
Keep trying to argue, I'm out.
« Last Edit: October 28, 2019, 01:55:54 pm by EEVblog »
 

Offline EEVblog

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #53 on: October 28, 2019, 01:54:26 pm »
Then you have leases with fixed price increases every year, and not uncommon for commercial businesses to have 5 or 10 year leases for the bigger companies, 2-3 years for small businesses.

Speaking of which, my old lab lease to the lawyers is very unusual at only 6 months with a 6 month option.
I wandered by a couple of times in the last few days and no one is there. I might check it out every day this week and see if they even use it at all...
 

Offline nctnico

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #54 on: October 29, 2019, 01:43:02 pm »
But think about it: are you a real investor with just one investment?
:palm: Seriously?
I only have one business, guess I'm not a businessman...
Having only one investment is similar to having a business with only one customer. Like a freelancer who works for years at the same customer. On paper the freelancer has a company but he/she is effectively an expensive employee which can be fired at any time without anything to fall back on.
Saying that only having one investment is not an investment because you only have the one is the dumbest thing I've heard in a long time.
If you think that then you shouldn't buy the commercial property! Every investment expert will tell you the same when investing: diversify and use money you can do without. Neither seems to be the case in your situation. You even need to take out a loan to do the investment. The latter means a double risk: the investment can lose value and/or the interest rate can rise. Worst case you'll take a double hit. And then there is also the chance your home loses it's value so the amount you borrowed is larger than what your home is worth. Banks don't like such a situation. During the global financial crash 10 years ago my home lost about 20% of it's value. Commercial properties where hit even worse. If you don't have enough meat on your bones it will end badly.

But don't take my word for it; ask an expert and he/she will tell you exactly the same.

Here are some interesting articles:
https://www.moneyunder30.com/why-your-house-is-not-an-investment
https://www.moneyunder30.com/real-estate-investing-in-your-twenties
« Last Edit: October 29, 2019, 01:49:16 pm by nctnico »
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline sokoloff

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #55 on: October 29, 2019, 01:57:52 pm »
There are definitely investing experts who do not diversify. Possibly the greatest investor of our time:

https://www.forbes.com/sites/karlkaufman/2018/07/24/heres-why-warren-buffett-and-other-great-investors-dont-diversify/
 

Offline nctnico

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #56 on: October 29, 2019, 02:04:02 pm »
There are definitely investing experts who do not diversify. Possibly the greatest investor of our time:

https://www.forbes.com/sites/karlkaufman/2018/07/24/heres-why-warren-buffett-and-other-great-investors-dont-diversify/
Well, Mr Buffet isn't investing in one company but has limited his investment to certain sectors. That still counts as diversifying (spreading risks).

An interesting quote from the articly:
this strategy is only useful if you intend to put the work into acquiring as much knowledge as you can about a few select investments.
In other words: if you want to invest right then turn investing into your daytime job.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline sokoloff

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #57 on: October 29, 2019, 02:08:04 pm »
You certainly seem to know everything about investing.
 

Offline nctnico

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #58 on: October 29, 2019, 02:40:24 pm »
You certainly seem to know everything about investing.
I know enough to know my own limits. A couple of decades ago I have worked at a stock broker / investment firm for a while so I have some insight in what effort & talent it takes to be really succesful.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline all_repair

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #59 on: October 29, 2019, 04:02:21 pm »
I didn't crank the number as Dave did.  I didn't want to buy at first, industrial space used to rent out at a relative low fee by a government body as an industrial policy here.  If your country still have that, you should seriously consider it.  But situation changes, these industrial space was transfered to a commercial body (REIT), and the REIT policy is to have rent increase every few year.  It was a no-brainer to discard renting, because setting up a lab shall cost me a lot of time and money.  There is no protection for my effort and money for rented space. I would price my time and attention as
the  most expensive component.  Renovation also cost me dearly.  I have seperate breaker for my workshop, and every bench also has its circuit breaker.  If it is rented place, the workshop or lab shall not be invested and so they cannot be continuous improved upon.  That mean my productivity shall not as high as it can be.  I have seen one of my friend rented office that stays the same for last 20 years with absolutely no improvement.   My workshop has been transformed so many cycles in a few years.
« Last Edit: October 29, 2019, 04:05:01 pm by all_repair »
 

Offline EEVblog

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #60 on: October 31, 2019, 05:49:50 am »
If you think that then you shouldn't buy the commercial property! Every investment expert will tell you the same when investing: diversify and use money you can do without. Neither seems to be the case in your situation.

You know absolutely nothing about my situation, and I don't need your advice.
Your comment is still as dumb as it was before.
 

Offline EEVblog

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Re: eevBLAB #66 - Renting vs Buying a Commercial Office Lab
« Reply #61 on: May 18, 2020, 03:42:48 am »
I would say that it is worthy to invest money in building your own office if you have a successful business and you are planning to settle there for a long period, otherwise there is no need to spend money...

Depends entirely on what your other investment goals are.
Commercial realestate is a common investment even for those without a business. IIRC correctly around half the offices in my business park are not owner-occupied.
 
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