RC (Reinforced Concrete) vs. Wood
Merit of RC
Keeps high asset value. Banks like it.
Takes longer loan period thanks to long legal life span.
Durable. Strong to disaster.
Popular among tenants.
Tend to be a big bldg, big asset.
Easier to manage than wood.
Demerit of RC
Expensive to manage
Expensive property tax
Expensive repair costs
Merit of Wood
Huge depreciation costs
Easy to repair
Cheap repair costs
Demerit of Wood
Hard to get a bank loan
Ages fast. Needs regular maintenance.
RC buildings tend to be a big scale in terms of its size and price. Having one RC bldg could equal to having multiple wood bldgs in terms of how much cash flow it makes. Plus there is a huge possibility to get a long loan period which makes it easier to create your financial assets bigger in such a short span.
However its downside is since repair costs are expensive, if there are some damages or flaws, it’s going to be a big payment.
Wood buildings tend to yield higher returns than RC bldgs in the RE market.
Besides its running costs are not so expensive so cash flow tends to high.
Its downsides would be it is hard to get a bank loan and requires regular maintenance again aging.
Both types of building structures have pros and cons.
There isn’t “the best” structure.
Having a mix of RC and Wood in your portfolio would be a nice way to save on tax and increase your assets.