time2roll wrote:
BobsYourUncle wrote:
ShinerBock wrote:
For instance, I paid $60k cash for a five acre plot about 5 years ago as an investment, and just sold it for $85k. Total interest on a $60k truck at 1.9%(the rate of my last loan) is $3k. So pay cash for a $60k vehicle to avoid paying $3k in interest over 5 years or invest it and make $25k in 5 years. I think I will choose to invest it and make $25k.
That there is excellent advice and good thinking.
So true.
Yes as long as that $60k does not become $45k. Vehicle loan interest is virtually guaranteed, investments are not. Don't kid yourself that you know the future. Still happy to hear the land turned out well.
Land value generally always increases, not decreases. Also, just as with investment managers, there are good ones and bad ones. You have to do your homework and stack the odds in your favor increasing your chances of making a profit.
I have been doing this for the past 15-20 years as a "side hustle" and I have made a profit on every land I have sold except a few in the beginning due to taxes. I will search out new mid to high end subdivisions that just opened up and pick out a few tracks of land that I know will be sought after when the neighborhood is developed. Then I wait 4-6 years(maybe longer), while the neighborhood builds more houses increasing the value of my land. The plots I pick out are generally some of the last ones sold in these neighborhoods and 7 times out of 10 a home builder buys my plots to build a house on it so he can sell it for even more money.
My area is very good for this type of investing because New Braunfels, about 40 miles north of me, is one of the fastest growing cities in the US and has been for a while. The chances of land value increasing there is pretty much guaranteed and I have several plots in the area that I will sell in the coming years. However, his is not the only way to turn $60k into more money either. Heck, just putting that money into maxing out your 401k would likely gain you more money over 5 years than would you would pay on vehicle loan under 3% interest.
