How to tell when to sell

[scaredychicken]

I think that you are leaning in the right direction to sell. That is a good return on your investment.

That said, I'm a bit younger and my gut reaction is to keep it (they ain't making more land)
I'm not certain from what you have said, but it sounds to me that you are receiving rent of $5000 / yr ... I'm guessing that that is from renting out the land (ie no house). That is passive income, and that's a good thing too.

If you intended to sell in a year or two anyway, then selling now gives you the funds to use as needed now. As has been suggested, a decent offer now, may not improve in a year or two. All the best.

 

[duffer]

Your original post doesn't say if you live there now or not. I'm assuming not. So you will have to pay cap gains of 15%-20% on that $150k. That's $25-$30k of taxes (closer to $30k if you're single). That leaves you about $125k. If you do live there now, you'll have to buy some place else to live and pay inflated prices for that. You may not come out ahead. If you don't live there now, then you have to decide if $120k net is sufficient.

Good luck with your decision, that only you can make.

 

[wmfamily]

I think that you are leaning in the right direction to sell. That is a good return on your investment.

That said, I'm a bit younger and my gut reaction is to keep it (they ain't making more land)
I'm not certain from what you have said, but it sounds to me that you are receiving rent of $5000 / yr ... I'm guessing that that is from renting out the land (ie no house). That is passive income, and that's a good thing too.

If you intended to sell in a year or two anyway, then selling now gives you the funds to use as needed now. As has been suggested, a decent offer now, may not improve in a year or two. All the best.

Making $5000 a year in rent is a good thing. Unless you really need the money I would continue to rent it and continue the rent agreement. Maybe re-look the amount of rent based on local rates.

Of course this is a personal decision and the rest of us just give food for thought.

Good luck in whatever you decide.

 

[Needville]

You don't appear to use the property and it is strictly an investment, so look at it in investment terms. $5000 rent on a $150,000 investment is a little over 3% rate of return. Even in todays market a 3% rate of return is pretty easy to get without the hassles of owning property.

Usually land appreciates over the long term. You are 77, you can't worry about the long term. Whether the property appreciates or depreciates in the short term is unknown and nothing you can count on, so I don't think it should factor into your decision.

 

[blee03]

Sell

The market will be going downhill eventually... what goes up, must come down.

 

[bigtiller]

Are your kids/heirs interested in it and willing to do the maintenance before/after your passing? If so, keep it and keep collecting rent checks and stipulate that in the will.

If the kids are not interested, sell it.

 

[drssg]

If passing it on to kids is of interest, there can be significant tax savings. The cost basis for the kids would be the value of the property when they inherited it, instead of the $25,000 that the OP paid.

 

[JasperFrank]

Involuntary Conversion is a wonderful thing.

 

[Sigarms]

I bought this 6 acre property 10 years ago with intentions to use it for a different purpose. Things came up and we were unable to use it for that purpose and have rented it out since then. I am getting older now and would like to make my life simpler, not having to worry about taking care of that property.

Five years ago we were offered $100,000 for it and turned it down. Inflation has gone wild lately and property values are shooting up. I was just offered $150,000 for the property and am considering selling but wondering if I keep the property another year or two if I can get even more.

Through a stroke of luck and being in the right place at the right time, I was able to purchase the property for only $25,000 and have collected rent of $50,000 on it in the last 10 years with little in expenses but probably 2 months of work clearing fallen trees off the property after hurricanes.

I'm 77 and really don't know if I will be able to care for the property next year if another hurricane strikes. In this situation, would you be for selling it now for the offer or keeping it another year or two to see if it gets a better offer?

If you were my father, I'd tell you to sell, make your money, and spend it on yourself and your wife.

Your 77.

My dad was absolutely fine by himself (mom died in 2002) until about 2018 when he was 86 and he fractured his back trying to fix the mower by himself.

I just had this same conversation with my 70 something year old neighbors as the houses around us are selling stupidly high. Told my neighbor that if they are ever thinking of moving to a condo, now is the time to sell. Wife and I are still in our 50's, and we still have some time left before we "have" to move.

What I've learned with my father is that when you get up there in age (over 70) you don't think anything will change. Newsflash, when something happens like an accident, it's never planned, but when it happens when your older, recovery time along with PT can be time consuming and a PITA.

Take the money and run.... Just spend it on you and your wife

 

[civilian]

If you sell it, would a land contract help any on the capital gains? Maybe spreading them over a longer time? Jon