There are three main types of building structures for real estate investment.Wooden, steel, and reinforced concrete (RC) structures.
This time, I would like to introduce the characteristics of each property and the good points and points of concern from the perspective of real estate investment.
table of contents
Difference in building structure
wooden
Wood is used for structures that maintain strength, such as foundations, walls, and pillars.The statutory useful life is about 22 years, which is short compared to other building structures.Since it is vulnerable to moisture and impact, diligent maintenance such as measures against moisture is required.
Advantages/good points
- Cheap to build and easy to buy
- Low cost for repairs and large-scale repairs that will inevitably occur someday
- Effective for tax saving due to large depreciation expenses
Disadvantages/concerns
- High depreciation cost = short useful life
- Not suitable for long-term loans due to its short service life of 22 years
- Vulnerable to disasters such as earthquakes.Poor sound insulation
Steel frame
There are two types of structures: heavy steel structures using steel materials with a thickness of over 4 mm, and light steel structures using steel materials with a thickness of less than 4 mm.
It has better earthquake resistance than wooden construction and is more expensive than wooden construction, but it is cheaper than RC construction, so it is an intermediate image between wooden construction and RC construction.
Steel frames are resistant to earthquakes but vulnerable to heat, so they require fire-resistant coating (according to the Building Standards Act, steel-frame structures are considered fire-resistant if they are covered with a certain standard of fire-resistant coating).Heavy steel frames are more stable than light steel frames, and have excellent durability and earthquake resistance, but construction costs are high.
Advantages/good points
- Prefabricated construction method and unit construction method can be constructed at a lower cost than RC construction, and the service life is 34 years, which is longer than wooden construction.
- Can be written as "mansion" when recruiting for rent
Disadvantages/concerns
Although better than wooden structures, lightweight steel frames are vulnerable to fire (steel begins to bend at temperatures above 700 degrees and may collapse).
Reinforced concrete construction (RC construction)
It is a concrete structure covered with steel bars.It is characterized by high durability, fire resistance, earthquake resistance, and soundproofing compared to wooden structures by combining reinforcing bars that are strong against pulling force and concrete that is strong against compressing force.In addition, reinforced concrete construction (SRC construction) has a steel frame at the center of RC, and is built more firmly than RC.
Advantages/good points
- Robust structure makes it resistant to disasters such as earthquakes
- With a long service life of 47 years, it is easy to make a long-term loan
- Highly soundproof and popular with tenants
- cheap fire insurance
Disadvantages/concerns
- Condensation is likely to occur and mold is likely to occur (due to high airtightness)
- The land on which it can be erected is limited due to its weight
- Construction cost is higher than wooden construction, so it is expensive.
I understand that there are types of real estate investment properties, but which one is the most efficient investment target?
Each structure has good points and points of concern, but what about investment efficiency?No matter how much rental income you have, if the expenses are high, it cannot be said to be a very efficient investment.Therefore, if you can get a long-term loan, we recommend a wooden apartment.Wooden properties, which are cheaper in fixed asset tax and repair costs, can use depreciation to record an accounting deficit and save tax, and tend to have a higher monthly income than RC.Therefore, we believe that the investment efficiency is high.
Summary
- There are three main types of building structures: wooden, steel, and reinforced concrete (RC).
- Wooden structures are cheap to build and easy to buy, low cost for repairs and large-scale repairs, effective for tax saving but unsuitable for long-term loans, vulnerable to disasters such as earthquakes.Poor sound insulation
- Steel frames are cheaper than RC structures and have a longer service life than wooden structures, but lightweight steel frames are vulnerable to fire.
- Reinforced concrete construction (RC construction) has a strong structure and is strong against disasters such as earthquakes, but it is expensive because construction costs are higher than wooden construction.
- Wooden buildings are recommended as an efficient investment target because fixed asset taxes and repair costs are low, and depreciation expenses can be used to record an accounting deficit and tax savings.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
