When it comes to saving for retirement, investment advisors generally recommend that one contribute regularly to an Individual Retirement Account (IRA) or a company 401(k) plan. Steady growth can be achieved, they suggest, by diversifying one’s portfolio with a mix of stocks and bonds. Rarely, however, do they recommend adding real estate to the investment portfolio. By neglecting to invest in real estate, one could be missing out on the many benefits afforded by this asset class.

Advisors and investors may shy away from this investment for many reasons. Advisors might avoid it possibility because they are not licensed to sell it. Thus, they have no incentive to decrease the amount of money that they have under management. Also, investors often avoid real property because often they don’t understand it. Even if they do, they don’t feel that they have enough capital to make an initial investment. But if they became better educated in the benefits of real estate, they would find that it offers some advantages not seen in other investments.

Often, advisors recommend utilizing investments such as mutual funds to achieve risk-adjusted, long-term appreciation when saving for retirement. By utilizing qualified retirement vehicles such as an IRA or 401(k) accounts, investors can often receive a tax deduction to offset income, reducing their current tax bill. They may also use Roth accounts to forego the upfront tax deduction enabling them to receive retirement account distributions tax free. Real estate may also provide long-term appreciation, as seen in stock and bond mutual funds. In addition to receiving up-front tax advantages just as qualified plans do, real estate investments may add other tax advantages when the property is liquidated.

Many might be surprised to learn that over the past ten years, despite the “real estate meltdown,” real estate prices have outperformed the Standard and Poor’s 500 stock market index by a wide margin. As of May 2011, data provided in the Standard and Poor’s Case Shiller index (CS) showed that real estate prices, based on a 10-region composite, advanced 30.1% over the latest ten year period. During that same time the Standard and Poor’s 500 (S&P500) stock market index advanced just 7.1%. This is despite the fact that over the past two years, stock prices nearly doubled off of their March 2009 lows. During this same period, bond and commodity prices have also moved dramatically higher, causing many to worry about future market corrections. Only real estate prices have not performed and remain 32% below than their peak. The S&P 500 was just 13% from its all-time high based on May data. This is a value that an investor might look upon as a good opportunity based on current prices.

Both qualified retirement plan contributions and real estate investments offer tax incentives. When one contributes to a qualified retirement plan, the investor can usually deduct the contribution from gross income, reducing the income tax liability. Real estate, even when purchased outside of a qualified plan, offers tax deductions, sometimes as great as a qualified plan contribution. Individuals who own their own home can deduct mortgage interest and property taxes paid if they itemize their tax deductions. If they don’t itemize, they can still deduct their property taxes to receive some tax relief. Investors who purchase real estate investment property do even better. In addition to the mortgage and property tax deduction that home owners receive, real estate investors also receive deductions for property maintenance and depreciation. If this investor is not generating positive cash flow on the property and the investor has an income of less than $100,000, he or she can write off up to $25,000 for losses against their gross income.

A residential real estate also receives a special capital gains tax exemption not offered to other investments. If one had lived in the home as a primary residence for two of the previous five years, the individual is allowed a capital gains exemption of $250,000. This amounts to a $37,500 tax savings based on the current 15% Long Term Capital Gain tax rate. Not so with distributions taken from a qualified plan. These are taxed as ordinary income, at your highest tax rate. If the investor owned a primary residence along with a rental property, the investor could sell the primary residence at retirement, take the capital gain, and move into the rental. The tax-free distributions from the liquidation of the primary residence could be used to pay off any remaining mortgage on the rental property and provide extra funds for retirement expenses.

Real estate offers many positive benefits that may be important to a person planning for retirement. Like stocks and mutual funds, real estate has the potential to appreciate, preserving purchasing power. Adding real estate to one’s holdings increases diversification and reduces overall portfolio risk helping to ensure a financially successful retirement. Residential and investment real estate often provide tax benefits not found in other retirement investments.

Water related factors of deterioration to buildings may take the largest toll on structures which are snow, rain, moisture, internal condensation, and humidity. Biological factors include fungi, bacteria, and insects. Chemical contributors may include oxidizing agents, i.e bleach, reducing agents, i.e. sulfides, acids, i.e. bird droppings, bases, i.e lime, salts, i.e. chlorides, or even chemically neutral substances such as fat or oil. Solar radiation, air quality, freeze thaw effects and wind are other environmental contributors to building deterioration.

The majority of building envelope failures can be attributed to water, in one of its many forms (gas, liquid, and solid). The sources of water that could affect a building envelope include:

Water ingress and absorption. Water ingress is typically a function of moisture load and enclosure resistance. Most materials or systems have the capability to absorb some water for a defined period of time without degradation..If absorbed moisture is allowed to sufficiently dry prior to the period which degradation will occur, then these materials could achieve reasonable durability despite the absorption of water. Enclosure assemblies can show signs of water entry due to forces such as gravity, capillary action, or wind blown water. Material deterioration can occur if the water ingress cannot be managed or drained to the exterior, or if materials do not have the capability to store water without degradation.

Condensation. Condensation occurs on a surface with a temperature below the dew point of the air in which it exists. The likelihood or extent of condensation is related to the relative humidity of the air and material temperatures. Problematic condensation within building envelopes is often related to uncontrolled air leakage, vapor diffusion, rain penetration, or snow melt. Condensation is typically controlled through the careful design and installation of air and vapor barriers.

High RH levels. Although condensation is typically the result of high micro climate RH levels, situations can exist where materials are damaged due to sustained high RH levels without condensation (i.e. mold growth)

Deterioration factors in concrete

o Physical processes – freeze / thaw, abrasion, thermal cracking

o Carbonation and ingress of chlorides, leading to a risk of reinforcement corrosion in the presence of water and oxygen

o Chemical attack – includes the external attack of sulfates and acids, and internal attack of alkali aggregate reaction.

Deterioration factors in steel

o Corrosion is a major deterioration factor in steel, which need a combination of water and oxygen to corrode.

o Corrosion may be provoked by particularly aggressive environments.

Deterioration factors in timber

Main durability risk factors in timber are moisture, insects and fungi. From these, the following durability issues can arise:

o Deformation of members due to moisture movement

o Fungal decay (dry and wet rot) and insect attack ( wood boring beetles and termites)

o Structural performance phenomena can occur like reduction in strength and stiffness.

Air and Air Pollutants

Air and its components – oxygen, nitrogen, and other by-products can be an agent for deterioration, as well as a transportation mechanism. As a transportation mechanism, air can bring moisture, water, and pollutants to areas of the building envelope that would normally be protected from these agents. Moist air traveling through a building envelope can result in mold growth on organic materials or corrosion on metallic materials. Common air contaminants include chlorides in maritime climates, sulphur dioxide from vehicle emissions, hydrochloric acid near manufacturing plants, nitric acid from fossil fuel combustion, and chlorine in pool environments. Buildings located in environments with these high concentrations of reactive contaminants can experience more rapid degradation of a variety of building envelope components.

Wind

Wind plays an important role in the service life of building materials. Enclosure design requires consideration for peak loading as well as cyclical loads that cause shortened life from “overworked” materials. Wind loading can also cause depressurization of enclosure cavities, which can increase air leakage, water ingress, moisture movement and condensation. Wind pressures are also responsible for uplift on roofing assemblies and wind driven rain that can penetrate unprotected areas.

Biological and Ecological Agents

Molds or fungi, as well as rodents, insects, and birds can affect the service life of building materials. The presence of fungi, tempered air and moisture (typically above 22% moisture content in wood materials) can cause deterioration of organic materials and unacceptable occupant health conditions.

Insects, birds, and rodents can damage materials by digesting, gnawing, nesting or depositing corrosive droppings. Vegetation in the form of vertical vines or horizontal landscaping can significantly impact building fascades and structural elements due to root growth.

Temperature

Extreme temperatures or temperature fluctuations can cause significant movement in materials like copper and vinyl, creating deformation of materials, and unintended gaps and hole at material junctures. Freezing temperature can lead to frost heaving, ice jacking, spalling of masonry and damage to brittle materials. Excessive heating of materials (i.e. metal flashing and roofing can lead to “bleeding” of materials onto finished cladding, and material cracking, bulging or ridging. Extremely hot temperature, such as those that might occur in building fires can have a multitude of detrimental effects with respect to service life. These temperatures can temporarily or permanently change the physical properties of materials, making them ineffective for their intended use.

Solar Radiation

Material selection and the assembled enclosure can be greatly influenced by UV radiation from the sun. When material absorbs radiation from the sun, energy is produced that can cause a chemical reaction and material property changes (i.e., becoming brittle, yellowing, chalking, or fading). Most assemblies with UV sensitive material require the use of a covering material (i.e., metal flashing over exposed roofing membrane), limiting building aesthetic and design options. Other materials have limited service life as a result of UV degradation (i.e., many sealant materials and water based paint finishes). Conversely, night sky radiation can also cause heat loss and problems with condensation and corrosion in some roofing assemblies (i.e. zinc roofing)

Chemical Reactions and Incompatibility

Although chemical reactions are not a specific environmental agent, they are typically coupled with environmental agents to cause damage (i.e. corrosion).

For example, galvanic corrosion is a typical problem with incompatibility between metals, or the use of pressure treated wood and zinc coated fasteners. Other compatibility issues include the use of various coatings, caulking, and membranes in contact with each other.

Positive Aspects of Agents Affecting Building Durability

There are some positive side effects that impact the service life due of building materials. For example, patina corrosion protects copper roofs, temperature shifts dry moist materials, landscaped or green roofs protect UV sensitive roofing materials, wind cools buildings, and water running over zinc strips minimizes algae growth.

HOW CAN DURABILITY AND SERVICE LIFE BE IMPROVED?

The main culprits that can rob durability are poor workmanship and lack of knowledge of the properties of materials. It is important to identify the problems that manifest themselves as shortcomings in our traditional materials and look for opportunities to improve material performance in housing and buildings. Explore new techniques, materials, components and systems that promise to improve durability while reducing life-cycle costs. Develop methods for accelerated assessment of materials, components and systems that reflect in-place builder installed performance. Greater attention should be paid to details which influence how a structure deals with water run off and drainage.

Building components require varying degrees of maintenance, repair and replacement during the life cycle of a building. The extent and intensity of maintenance, repair and replacement varies significantly, depending on how appropriately the service life of materials, assemblies, and systems are harmonized, and how accessible they are for periodic maintenance, and replacements.

A building surveyor, especially a chartered building surveyor is able to provide professional advice on a wide range of issues regarding the maintenance and care of buildings and the property the building is situated on. The job encompasses not only the building, but also includes the surrounding property A land surveyor will research the documents available about your land, including titles and previous surveys to establish boundaries and land maps. A building surveyor is usually involved in the sale of a property, so their report can sometimes determine whether a sale goes through or not. Let’s analyze what some of the obligations a building surveyor must take on by accepting the job.

1) One of the most important activities is to actually create the survey itself. The best vehicle to use to accomplish an idea of the state of a property would be to examine the building survey. As we mentioned, you might need a survey if you were selling the property. In other cases, you would be using the building survey if you were involved in renovating, or improving the building. A Building Survey examines all elements of the property.

2) Project Monitoring is important because each building surveyor has to monitor such things as the overall progress and impact of the project activities. This report offers insights to how the overall performance, schedules, and objectives are being met.

3) Party Wall Surveying involves anticipating how others outside the subject property might be effected. This will also include the process of finding out if there is going to be any disputes between neighbors of the adjoining building, as well as the building owner. Part of the party wall survey is to offer solutions so that the building project adheres to all compliance and legislation laws.

4) Right of Light embarks on the freedom for the neighbor’s right of light that they have been accustomed to. If you think a new development will restrict the level of light you receive, then you are perfectly entitled to oppose it. If a window or an opening has had 20 years or more of unobstructed daylight, it automatically receives the right to light. The new building reduces the amount of natural light coming in and will therefore be deemed as an obstruction.

5) Survey Access Consultants are the ones that are going to tell you about the existing buildings criteria for usability and accessibility. It involves not only the issue of ready movement to and around the building, but also the possible uses of the building to provide for people with disabilities.

6) Fire is always an issue in any building, and should therefore be addressed properly. This will be advice on a range of workplace safety issues that affect all business premises.

7) Design and Refurbishment is the development of the detailed design of a project. This is also where an old building will receive a complete makeover to make it more appealing, and modern.

8) Planned preventive Maintenance is a scheduled service visit carried out by a competent and suitable agent, to ensure that the building project at hand is currently operating correctly. There job is to avoid any unscheduled breakdown and downtime.

9) Life Cycle Analysis should be included so that the building owner is aware of all the environmental impacts associated with all of the stages of the project. This will help to decide if the project should even be attempted, or what the additional environmental costs are going to be.

10) Insurance Reinstatement Valuations are done in case a disaster happens and causes complete destruction of the building. This is where the building insurance policy comes into play.

11) Dilapidations and Lease Advice involve issues to prevent the project getting caught doing building repairs, and other alterations that would usually fall in the hands of the landlord.