The Home as a Portfolio of Micro-businesses

In today’s world, a home isn’t an investment in the true sense.

It’s actually a consumption item just like all of the other stuff we buy.  We are merely using it for a time, and we pay an ongoing fee for doing so.  The hope is that other people will want to consume it in the future, which will allow us to cash out.

However, the world that made that excessive approach viable (growth in across the board demand for homes like this), doesn’t exist anymore.   This means we can’t afford to buy and sell homes as consumption items anymore (even then it was a bad idea).  We need to think of them as investments.

How so?  We are going to need to invest in homes that produce streams of income.  Right now, we approach these productive assets like home amenities.  That has to change.  They are actually micro business ventures that provide value to you as the owner.  Each of these business ventures consist of:

  1. A physical production system.
  2. Product or service as output (value to you, can it be sold?)
  3. Ongoing maintenance and care (the better/smarter the system, see 1, the lower the cost to care for it).

Using this approach, what’s the value of a water harvesting system to you?  In a suburban setting, it’s easily 60-70% of your water bill (the water you use outside the home), that’s worth nearly $500-1000 a year to most American families.  What if you sell discounted access to it to your neighbors (assuming you could meter it, etc.).

NOTE:  currently, domestic water bills are increase at a 5-6% annual rate.  I suspect we’ll also see prices spike in areas that reach water limits, like the spike we saw in New Mexico.  In those cases, water prices can double or treble every year. 

Using that approach, a home’s value is both its value as a consumption item and the value of its portfolio of micro-businesses.

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Discussion — 7 Responses

  • Andrew Dziengeleski October 21, 2013 on 8:27 pm

    Luckily, I am on a well system that is drilled into a very deep aquafier. I would like to get a back-up hand pump as we have had a number of moderately long power outages over the last three years which essentially leaves us without potable water.

    Good stuff, people need to recognize their homes are not investments to make money off of (although that may be desirable) but rather places to live and thrive successfully.

  • John Robb October 22, 2013 on 2:02 pm


    Another way to look at it: The current investment approach to homes is more like speculation on the first editions of comic books than real investment. It’s all part of the casino/lottery mentality that is so corrosive.

    Imagine what a home would look like after 30 years of living in it, if productive capacity was a continuously improved?


  • bonnittaroy October 25, 2013 on 12:25 pm

    We moved to a small home/farm in 2006 hoping to do just this. First we supported the home/farm by conventional jobs, then 2 years ago I lost my career (of 22 years) and now am transitioning to a new way forward. There is so much potential here, but it is taking me a while to design for value that can be exchanged.

  • Mylinda October 25, 2013 on 6:01 pm

    Interesting idea, I guess I don’t understand enough about it yet. I don’t understand what the micro ventures might be or how the micro ventures can happen.