In China, the housing prices in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen are much higher than other cities, while housing prices in first-tier cities are generally higher than those in second-tier cities, and housing prices in second-tier cities are higher than those in third-tier cities, and so on. A step-by-step development trend has emerged. Different cities have different prices.

So, why does this happen? This has to do with the "rent law" we're going to talk about today.

What is the "Rent Law"?

The law of rent is a theory put forward by the founder of the British classical economist, David Ricardo. Therefore, the rent law is also called "Ricardo's law". Ricardo has a deep research on the laws of business and economic theory.

The law of rent mainly means that the price paid by land users (land rent) is determined by scarcity (monopoly), not by the cost of investment and improvement made by the landlord, and the price of land is the cost of land. The price paid by the user.

In short, good land (with high yield and geographical advantage) will be scarcer and the price of land will be more expensive. Therefore, some people are willing to pay a premium to buy those good land, thus forming different lands. price gap.

In the agricultural era, people rented or bought land mainly for planting, and good land would produce good yields, so some people were willing to buy those high-quality land at a premium.

In modern society, the more developed the economy, the larger the population and the more companies, the more valuable the housing prices are. Therefore, the geographical location now determines the housing prices.

A house has a good geographical location and will generate a lot of added value, such as household registration, school districts, medical resources, personal development, etc. These can affect generations, so why are those first-tier cities so tight? High is the reason.

The "Rent Law" tells us that buying a house is far from the problem of the house itself, but the various interest resources generated behind the house.

The Inspiration of "Rent Law" to Life

The rent law will also bring us a lot of inspiration in life, such as:

• When we are buying a house, we should not choose a poor location just because we are greedy for cheapness. Investment in a poor location will have the risk of depreciation, while a good location will appreciate in value;

• When starting a business, it is best to choose a big city for development;

• When recruiting talents, enterprises should not hire people with average ability to fill up the number at will in order to reduce costs;

• If you can have good competitiveness and ability, then your time cost is worthless, and your salary will not be high in the end.

The above reasons are the same as the poor location, the house is uninterested. The reality is cruel. If you don’t want to become a cheap and uninterested resource, you have to know how to make good use of the rent law and take certain actions.

How to use the "Rent Law"?

After understanding the law of rent, we must learn to be inspired by it and know how to make good use of this law.

1. Know how to grasp high-quality resources

If you have the ability, conditions and opportunities, you must know how to grasp high-quality resources. For example, if you have the ability, you can enter the big city to work and develop, because the big city will have more development opportunities for you to emerge.

2. Make yourself a quality resource

This world is a world where the strong are always strong, so each of us must find a way to make ourselves better and stronger. Only when you reach a higher position, become a certain person, and have high-quality resources, then you will attract more and more resources.

3. Consumers try to avoid paying premiums

Most of the time, the price is determined by the payer. Therefore, when we consume, we try to avoid paying premiums. When consuming, we focus on solving the demand, so as to effectively avoid unnecessary expenses.