This is an emotional essay by Jimmy Song, Bitcoin developer, educator and entrepreneur and designer with over 20 years of experience.
Real estate is fiat property.
Not only is it ridiculously expensive, but it is also difficult to maintain. Anyone who buys goods buys work for themselves. It is an example of a quote from Fight Club: “The things you have end up being yours.” What’s worse is that the rights to your property are limited.
Governments like to pump houses and buildings because they give people a sense of security and because it is easier to pay taxes – and to pump it they do. With mortgages and good taxes, housing has become a staple in the bread and circus business where governments are often busy. They use the sale of real estate as a means of growth and control. Real estate is therefore a complex, complex personality, based on the opinions of politicians.
Real estate is very expensive, so it is very easy to pay taxes. The simplification of taxation ultimately means that the government can lower the property owner’s property rights. As I will show in this whole article, landowners have been degraded and in many ways the last thing in fiat. The authorities decide how far your rights are, and in most cases, they are not too far away.
Nobody Really Owns Land
The government backs its taxpayer capacity through force threats. Threats in this case include expropriation. You may think the site is yours, but in reality, you are using it only with government permission. The government can remove it at any time – and in the long run, they will eventually get rid of it.
Land acquisition is like a company car. You can use it as long as you follow the rules, but the equipment is complex and depends on keeping the real owner happy. To see also : In China, science-based approaches to the virus are being sidelined. Our real owner in the case of all property ownership is the government.
In that sense, real estate is actually a long-term lease from the state. They are the real owners and we need permission from them to use the site. As long as we pay our taxes and use the land responsibly, we can use the property. But to use land in a way that they do not like means that they will take away that land. We have the illusion of owning a property but it is actually a lease.
Zoning Ordinances And Eminent Domain
Local laws are the way governments restrict what you can do with your property. If the land is designated for specific uses, you will not be able to use it for anything other than that use. So residential land may not be used for commercial purposes and vice versa. On the same subject : 5 new Netflix releases that everyone will be watching this weekend. This changes the quality of the soil as it provides benefits to some properties over others. The venue allows the authorities to select the winners and losers.
As with other government directives, segregation is supported by force. You could be deprived of your land as your company car if you annoy the real owners.
What’s worse than local laws are prominent laws that allow the government to take over land at a “reasonable price.” If the government wants to confiscate land, it can seize it for almost any reason.
It is usually designed for “public benefit” such as a highway or airport. What has been particularly interesting over the past 20 years has been the use of a popular site for “economic development.” This is the practice of confiscating property and giving it to others so that they can “improve” the property in the way that the authorities prefer. Eminent domain selects winners and losers and is frequently harassed.
The property rights of the landowner are greatly reduced by this power. Unfortunately, land rights in some countries are even worse, where property is controlled by the institution and is provided for political gain.
Scarcity Of Real Estate
Despite all these shortcomings, real estate prices continue to rise. This may interest you : health-department-celebrates-2022-pride. In the long run, it is often a very good investment, beyond the CPI.
The reason is that, it is because of the lack of facilities. When more money comes to the economy, it tends to find a way to supply less goods. As they say, they are no longer making the soil, so it tends to appreciate faster than other things.
In addition, the sale of real estate has the advantages of central bank-sponsored financial systems because there are special loans available for them. Mortgages are treated differently and have lower rates than other mortgage loans. Think about how low your credit card is compared to your credit card or credit card. Mortgage lending adds a lot to the economy and increases the supply chain. The facilities have been a major source of Cantillon and are in progress.
Confusion About Mortgages
Maybe this is a good time to clarify something about mortgages. Many people think that home loans are from someone else. They think that most people who get 1% in their audit reports are the source of their debt at 3%. They reasoned that this would provide 2% to the bank. Somehow, this supports ornate buildings, security systems, security guards, warehouses and ATMs. Of course not.
Mortgages are not money from personal savings. They are published by the bank for the benefit of the borrower. A $ 500k house usually requires a minimum payment of $ 100k. Another $ 400k does not come from personal savings, but comes from newly made money. $ 400k is for the benefit of the borrower at the time of the loan.
Thus, there are no chance costs for bank loans. The only risk for them is permanent, and it is also covered by credit insurance. In particular, Fannie Mae will guarantee any loan that complies with certain standards. The bank wins because it earns interest on the money it creates at a lower rate. The borrower will win because he gets a chance to earn money. Who loses? Everyone whose income is reduced. We eat our tails to prevent starvation.
Thus, banks make a risky profit for every eligible loan and make as much as they can. The result is that they print money as if there is no tomorrow because they are encouraged to. The new money that will be available does not matter to them.
Because mortgage lending provides access to recently published funds, this is one of the few ways consumers can get into the Cantillon effect. Real estate services benefit immensely because the creation of this money requires the purchase of real estate. Thus, real estate prices are about the same as in real estate. They are just ahead of the curve when it comes to Cantillon Effects.
Store Of Value
As a result of this unique Cantillon Effect, there is a common perception that real estate is a good long-term value store. When combined with its shortcomings, the impression is that homes will continue to rise in value.
The result is that housing, even when prepared for inflation, has become quite expensive. One way to measure this is to divide the cost of living into a living. In the 70’s it used to be 4. That is, the average person would buy a house equal to 4 times the annual rent. At the moment, it is about 8. This is a very large fee especially from its use as a quality store. People do not want to sell a house so that they can live in it or use it for production. They are looking for real estate so that they can maintain value.
This is especially evident when you look at a Chinese-like market. The land and property association is so strong there that more people are buying second homes than the first houses are. Even the third house is almost as common as the first houses. This is not necessarily the case because people want to have more leisure activities – it is because families are a good way to protect themselves against the decline in wealth from inflation.
As a result, we see not only unfinished buildings, but all empty city buildings. This is a bad investment that destroys capital, and is rampant throughout China. There is what is called a very large number of houses, especially in a country whose population has already declined.
Surprisingly, while all this money is going into real estate, it is more temporary than ever. Many homes are demolished and rebuilt every 25 years or so, especially in desirable areas. The materials used are not durable. Homes reflect high-time ethics of fiat currency options.
Buildings destroyed along with money. One reason is that landowners are often separated from those who end up living at home. Most developers produce homes and produce low-quality goods because there is a huge demand for artificial inputs from fiat money. Landlords get into debt and end up paying for unstable manual labor.
Compare this with low-cost buildings. There are all European cities where houses are built of stone and have lasted for centuries. Many homes now under construction are not easily damaged.
Bitcoin And Real Estate
A premium value store for real estate can only last as long as fiat money does. Mortgages are popular in politics and are likely to continue to receive fiat assistance as long as fiat money is available. The profits that real estate earns more than other assets are huge and are not likely to disappear under fiat conditions.
Under Bitcoin conditions, however, real estate may be cheaper and cheaper. Establishing mortgages for real estate has led to higher housing prices, so that will clearly end. Also, real estate buyers will not be able to buy at all, which is what brings real future use. That behavior will not exist because the loans will have to come from savings. Interest rates in such cases can be very high which makes few people buy at a higher price.
Homeowners will have to save and will have a lower choice when purchasing. Instead of being built by manufacturers, we may find more houses built, better built, and more durable. Ultimately, this means that the quality of housing will go up, even if the costs go down. We can reasonably expect more people to have affordable housing when people use bitcoin as their most valuable asset rather than commodity.
Ten Ideas Coming to Real Estate
This is a guest post by Jimmy Song. The views expressed are entirely their own and do not necessarily reflect BTC Inc or Bitcoin Magazine.