HashKings Land Plots - Rent vs. Buy

The Rent vs Buy decision is one that we face as we move through life and we hope that we always make the best choice no matter what we may be renting or buying.

There are lots of reasons someone would pick one over the other when considering the Rent vs Buy decision and I will only list a few of them:

• Available Funds
• Investment Return on Available Funds
• Length of Time
• Projected Inflation
• Price Fluctuations/Wealth Creation
• Other Requirements to Use

Available Funds

One of the first things you need to consider is the amount of available funds you have at your disposal to even Buy the asset. If you do not have the available funds or access to get a loan to fund the purchase, none of the other reasons make any difference in your decision.

Not enough available funds means you must rent or not participate in that project.

Investment Return on Available Funds

If you do have the available funds, you need to take into consideration are there other options where you can invest the funds for a higher return but then you also need to take into consideration how risky the other investment is compared to the project you are considering.

If for instance, you could get a 20% return on your funds and it costs you less than half that to rent, I would probably invest my available funds for 20% and rent for 10%. After the first year, you would be 10% ahead plus any funds the renting of that item produced.

Length of Time

Another item to consider is the length of time that you plan on using the item that you may rent or buy. The longer you plan on using the item, the more you should lean toward purchasing it. However if you only plan on using it for a short or limited length of time before upgrading or moving on to something else, then you might want to consider renting instead.

Projected Inflation

Most people do not consider this when thinking about the Buy vs Rent decision. If you are in a high inflation time period, you would want to buy the asset since it's underlying value should increase as inflation increases. The faster inflation is rising, the higher the value of the asset will become if you decide to resale.

On the other hand, if inflation is low or stagnate, the value of the item may not increase in value at all and there is a good likely hood that the value may actually decrease providing you a negative return if you decide to resale.

Price Fluctuations/Wealth Creation

Also, you will need to consider the price fluctuations when making your decision. If there are large price swings in the value of the asset you are thinking of buying/renting, figuring out the best time to buy will be very difficult. This also applies to renting. If the price fluctuates in a wider range, the rent prices will probably be higher because the owner will want to get as much as possible from the renting of the item.

If you are trying to create wealth for yourself, you need to consider buying the asset because in the long term the price should be higher than you originally bought it for. However this is only after you take into consideration all of the other items that I have mentioned prior.

Buying an asset just to buy it is not a very smart decision to make.

Other Thing to Consider

You will also need to consider if there are any other requirements or investments you need to make before you can actually use the item that you will be renting or buying. The larger number of other requirements or higher the other investment before you can actually use the asset for it's intended purpose should also come into play into your decision.

However in the end, this decision is very personal and under the same circumstances there is not truly right answer to this question.

HashKings Land Plot

All of my HashKings land Plots that I rented last month have expired and now I need to either rent some new plots or buy.

I can choose to buy a plot from the market for 4 Hive or I can rent on a monthly basis for a price that will change each month. Currently the rental is 0.2 Hive per month.

Oh my, I did not pull the prices for the same type of Land Plot, I just pulled the lowest priced items on the market. When you are making your decision, you need to compare as similar of items as possible otherwise you might be led to make a decision based off of incorrect facts.

I had pulled the purchase price for the South America land plot and the rental prices for Mexico land plots.

Here are the buy and rent for both of those that will also need to be used.

Type of Land Purchase Cost Rental Monthly Cost
South America 4 Swap.Hive 0.24 Hive
Mexico 5.5 Swap.Hive 0.2 Hive

* Since there is a fee for moving funds between Swap.Hive and Hive, I am showing the currency 
of the transaction.  If you do not have funds available in that currency, you will incur a fee 
when moving the funds around.

If you rented:

• South America Land Plot for a year, it would cost you 2.88 Hive compared to buying the plot for 4 Swap.Hive
• Mexico Land Plot for a year, it would cost you 2.4 Hive compared to buying the plot for 5.5 Swap.Hive

Also, thinking of other items that I would need to use the land. I currently own 4 Mexico Seed and 20 South America seed that I can plant of the associated land plots. I would need to buy more Mexico seed sooner than I would need to buy South America seed but I own enough of either for one month of planting.

HkWater is another item that would be required to purchase. It takes more water to grow the Mexico seed than it does to grow the South America seed.

What Did I Decide?

Well after looking at my notes from last month, I noticed that a South America Land Plot costs 5 Swap.Hive and renting it was 0.067 Hive. With the dropping of the purchase price by 1 Hive and the jumping of rental prices to 0.24 Hive (over 300%).

My final decision was to purchase a South America Land Plot. If I don't want to use it, I can always put it on the rental market.