# 40 Years of Real Estate Growth

By Kaan Kula

Topic: Society & Business

[Open the interactive Jig](https://ask.jig.com/j/GsqG6uX35tDR)

## Guide

### 1. A company that rents out buildings

This model town shows one company's property\. It owns 20 buildings worth $15 million in total and rents them to other businesses\. The glowing board in front counts the years, the buildings and the value in millions of dollars\.

A company that owns buildings and rents them out is called a landlord\.

### 2. Six kinds of property

The company rents only to businesses\. Watch each kind glow in turn: office buildings, rows of business units, storage units, small warehouses, big warehouses and its 2 garages\.

Business units are small workshops with a roller door\. Storage units are lockable rooms that people rent to keep their things\.

### 3. Rent comes in every month

Tenants are the businesses that rent the buildings\. Every month each tenant pays rent, shown here as notes flying into the company's piggy bank\. That money pays the bills, pays back loans and saves up for the next building\.

Rent is agreed in a lease: a contract that sets the price and how long the tenant stays\.

### 4. Years 1 to 10: thirty buildings

Saved rent, plus a bank loan called a mortgage, buys more property\. About one new building arrives each year\. By year 10 the company owns 30 buildings worth about $24 million\.

### 5. Years 10 to 20: the value doubles

Buildings usually become worth more over time as rents and prices rise\. Growing about 5% a year, the company's value doubles roughly every 15 years\. By year 20 it owns 40 buildings worth about $39 million\.

Each gold coin in the tower stands for $5 million of property\.

### 6. Years 20 to 30: growth snowballs

Each year's growth is added to an ever bigger total, like a snowball rolling downhill\. This is called compounding\. By year 30 the company owns 50 buildings worth about $62 million\.

### 7. Year 40: sixty buildings, $100 million

Forty years after the start, the company owns 60 buildings worth $100 million\. It has three times as many buildings, but its value has grown more than six times\.

The average building was worth $750,000 at the start and about $1\.7 million at the end\.

### 8. Explore the forty years

Slide through the years and watch the town grow\. The garages stay at 2 while offices, units, storage and warehouses fill the empty plots\. Small, steady growth repeated for decades adds up\.