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Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 1:04 am
by AD700
Hi,

I live and work internationally, so my accommodation is paid for when I am on contract (most of the time), but I have no base to call my own.

I am contemplating buying a piece of land that I can gradually build a permanent base on. This could be a base when I am between contracts or when I eventually stop work.
To buy the piece of land I want, I would need to cash-in much of what I currently have invested in index funds. Is this a bad idea?

The alternative would be to wait a couple more years while I build up more cash – but by then the type of land I want may be harder and more expensive to find. Plus, the money I would need for the land could not be invested as I would be looking to use it within a 2-3 years.

If I cashed in my index funds now, I could get the land and then start investing in index funds again after that.

Any thoughts on what I should do? Anything I should consider?

Thanks!

Re: Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 1:12 am
by longleaf
Wouldn't a long term hotel rental be cheaper in between contracts? I personally wouldn't buy land. The land you buy could lose value, you will lose liquidity, and your growth potential will be devastated.

I would buy a home only if I knew I would spend huge amounts of time there or needed a place to raise a family. The costs associated are simply too high.

Re: Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 1:16 am
by 123
How many years are you away from the time when you will need to have a building on the land to live in (full-time residence)?

Re: Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 1:52 am
by AD700
longleaf wrote:
Mon Feb 11, 2019 1:12 am
Wouldn't a long term hotel rental be cheaper in between contracts? I personally wouldn't buy land. The land you buy could lose value, you will lose liquidity, and your growth potential will be devastated.

I would buy a home only if I knew I would spend huge amounts of time there or needed a place to raise a family. The costs associated are simply too high.
Yes, a hotel would be cheaper. I guess the land would be a long-term project which would eventually become a home.

Re: Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 1:53 am
by AD700
123 wrote:
Mon Feb 11, 2019 1:16 am
How many years are you away from the time when you will need to have a building on the land to live in (full-time residence)?
I would aim to get something very basic established within a couple of years (think tiny house), then over a longer period (10 years?) build something more permanent.

Re: Cash-in investments to buy land?

Posted: Mon Feb 11, 2019 6:02 am
by Uniballer
I would be concerned that the land you are buying will become unbuildable (due to changing environmental regulations/building codes). This could make it impossible to get your money back out if you change your mind.

Buy land when you are ready to use it, or as a speculative investment using only a small part of your net worth.