Real estate in retirement

[Alderman]

Into year two of retirement. After retirement I was able to purchase 45 acres of property adjacent to our home. While this may go against conventional advice, I look at it as providing diversity to my portfolio.
While I don’t know if there will be an investment return equaling other investments, I feel confident for the purchase price I paid, I am in no danger of losing money. The property can be divided with 4 or 5 potential building sites.

Also knowing the market has returned nearly all of the purchase price to me this year has made me feel okay with the purchase.

Upside for me is the property provides us with firewood for heating and wild game for food. A short two minute ride takes me up the ridge where I can have a peaceful view of the surrounding country side.

I have found that even in retirement I feel better if I can accomplish some physical work during the day and I have always enjoyed the activities I can do in a woodlot.

 

[upset264]

Wow, and I was happy about coming to an agreement to buy 4.5 acres next to our home after waiting 8 years for the owner to accept my offer. Good for you. It provides all of the pleasures and benefits you mention and its unlikely to be lost or stolen.

 

[Fermion]

We did the same, although we don't own a home, we did buy 30 acres of mountain timberland. It is a fun place to tinker around, cut some firewood, camp. Taxes are $28 a year.

I figure it will roughly keep up with inflation, more or less. It was not expensive at all.

 

[nancyfrank232]

How much does it cost annually for taxes and insurance OP?

 

[RunningBum]

Looks very nice. It's certainly nice to have an investment you can actually use and enjoy.

I feel confident for the purchase price I paid, I am in no danger of losing money.

Also knowing the market has returned nearly all of the purchase price to me this year has made me feel okay with the purchase.

I don't follow this sequence. First you say you can't lose money. Then you immediately follow up by saying you're almost ahead. Doesn't that mean you are actually behind right now?

 

[pb4uski]

^^^ I read it that he acquired the 45a at a good price and is confident that it will hold its value.

And separately, the return on his financial assets have almost grown back to where they were before he withdrew what he used to pay for the 45a.

So for example, if he had $1 million and withdrew $100k to buy the 45a that the remaining $900k has since grown back to almost $1 million.

 

[RunningBum]

Ah, OK. I thought he meant the real estate market when he said the "market" had improved.

 

[pb4uski]

Just my guess... I suppose that the OP will clarify at some point.

 

[catii]

Great idea.

 

[Sunset]

I feel it's ok, as long as you get some use out of it, and owning land attached to your home property is a good way to control what gets built/done beside your home, making it nicer.

However, I recently turned down the "opportunity" to buy an island of 15 acres for the same reason the person wanted to sell it. I had no use for it, and thought about how the other person had owned it for 30 years. The value of the land has risen very slowly while investments have gone up many multiples.
So land banking seems less attractive to me.

 

[Alderman]

How much does it cost annually for taxes and insurance OP?

Taxes and Insurance costs are around $800 annually.
I cover this by cutting and selling firewood from downed trees on the property.

 

[Fermion]

Taxes and Insurance costs are around $800 annually.
I cover this by cutting and selling firewood from downed trees on the property.

Check and see if your state will let you enter the land as timberland. Your taxes could go from $800/yr to $40/yr

 

[nancyfrank232]

Check and see if your state will let you enter the land as timberland. Your taxes could go from $800/yr to $40/yr

That would be awesome

 

[Alderman]

Check and see if your state will let you enter the land as timberland. Your taxes could go from $800/yr to $40/yr

40 acres is taxed as timber land. Most of the taxes are for the 5 acres of buildable property.

 

[nancyfrank232]

40 acres is taxed as timber land. Most of the taxes are for the 5 acres of buildable property.

That’s sweet!

Do you think I could invest in this kind of asset remotely?

How would I start?

 

[Alderman]

That’s sweet!

Do you think I could invest in this kind of asset remotely?

How would I start?

I’ve been looking at real estate on the Trulia site.
I was familiar with this property.
Contacted the owner, agreed on price, wrote up a purchase agreement, owner signed, contacted title company, and a week later it was all done.

I would think a real estate company could set you up.
The title companies have electronic signing now so distance should be no problem.

I’d want to make sure what I was buying though and would feel better if I could see it in person before making a commitment to purchase.

 

[calmloki]

Real estate INHO is an eyes-on proposition. You can buy mile upon square mile of property that photographs beautifully and that isn't worth spit. It has to have value to you - insulating you from unknown neighbors or providing firewood/grazing land or a private place to roam or build a cabin - or it has to have value to someone else. We've mostly bought income producing property but I have to resist the urge toward stuff that is just absolutely cool, but which would be a nightmare to maintain or which no one in the foreseeable future would be willing to buy from me. There is a reason some property is cheap or for sale for year after year... is it land-locked? inaccessible 6 months out of the year? Bad water you have to drill 600' for? Next door to the Rajneeshee cult or Duke compound? A three hour drive on gravel from the nearest town?
Real estate is local - the locals are typically in the know - looks like Alderman is, and those are real pretty pictures - Good on you!

 

[Offgrid Organic Farmer]

Into year two of retirement. After retirement I was able to purchase 45 acres of property adjacent to our home.

That looks real nice

After I retired, we bought 150 acres of woodlot alongside a river. I built a farmhouse and we started raising livestock.

 

[MRG]

Real estate INHO is an eyes-on proposition. You can buy mile upon square mile of property that photographs beautifully and that isn't worth spit. It has to have value to you - insulating you from unknown neighbors or providing firewood/grazing land or a private place to roam or build a cabin - or it has to have value to someone else. We've mostly bought income producing property but I have to resist the urge toward stuff that is just absolutely cool, but which would be a nightmare to maintain or which no one in the foreseeable future would be willing to buy from me. There is a reason some property is cheap or for sale for year after year... is it land-locked? inaccessible 6 months out of the year? Bad water you have to drill 600' for? Next door to the Rajneeshee cult or Duke compound? A three hour drive on gravel from the nearest town?
Real estate is local - the locals are typically in the know - looks like Alderman is, and those are real pretty pictures - Good on you!

+1

I watched people invest in timber! Poor souls took someone's word on what they thought the timber was worth. Much like land it is local, requires special knowledge, and changes quickly.

When I was about 17 DB and I agreed to harvest 15 acres of mixed timber in PA. DB knew the guy and we were doing him a favor to cut his small job. After moving our equipment, starting to cut and skid the timber, the dozer got stuck in a low area. Dozers just dig their own grave and we were SOL.

I walked to the landowners home to use a phone and chatted with his DW. She asked if we got stuck "down in the swamp?". I asked what swamp? She explained the area we had to go through was a swamp they had filled in 10 years ago.

We got our dozer and were gone!

 

[Red Badger]

Real estate INHO is an eyes-on proposition. You can buy mile upon square mile of property that photographs beautifully and that isn't worth spit. It has to have value to you - insulating you from unknown neighbors or providing firewood/grazing land or a private place to roam or build a cabin - or it has to have value to someone else. We've mostly bought income producing property but I have to resist the urge toward stuff that is just absolutely cool, but which would be a nightmare to maintain or which no one in the foreseeable future would be willing to buy from me. There is a reason some property is cheap or for sale for year after year... is it land-locked? inaccessible 6 months out of the year? Bad water you have to drill 600' for? Next door to the Rajneeshee cult or Duke compound? A three hour drive on gravel from the nearest town?
Real estate is local - the locals are typically in the know - looks like Alderman is, and those are real pretty pictures - Good on you!

^^^ A big part of the mission of the BLM is to manage largely useless, huge tracts of land. Great for remote hiking, camping, [-]dying[/-] rappelling, etc. All great activities, but also very low - no cost stuff. Inhospitable, inaccessible, and of little practical use, unless you're Cliven Bundy.

 

[Big_Hitter]

that's awesome

 

[street]

Land has always been a part of my life. I have bought and sold land all my life as a hobby and have worked the land in different degrees as I owned them. I never have lost money in bare land. I don't buy land with building (homes, Apt.) etc. that kind of property never has interested me.

I have a ranch now I wouldn't sell it if someone offered me 20 times more then I paid for it. The joy and rewards of working the land is something I have enjoyed all my life and it has been a blessing for me in retirement. I hunt, fish, hiking right out my back door and has been a good investment for me. I really don't care if I loose money on the place because it will never be sold in my life time.
I might transfer ownership to the state for a walk in get away for people when I'm gone to archery hunt, fish, hike and just to discover the outdoors.

 

[street]

Your purchase is great and the enjoyment and rewards from it, is worth every penny you spent, regardless if it doesn't make you money.

 

[LRDave]

Last year, we purchased 10 acres across the street from our home. The main motivation was to prevent anyone else from building on our street. We have enjoyed it immensely - it is mostly mixed hardwoods with an open area that will serve as a food garden. We have gathered our own firewood and cleared out a trail around the perimeter for walking the dogs.

There are two 10-acre tracts adjoining mine - fully wooded and land contours make both of them less buildable. We love the woods. I am trying to figure out how to maybe extract some nest egg to buy those 20 acres. They may appreciate some over the years, but it would be primarily for our own recreation and to preserve this natural area from development. This is zoned residential, so not intended for timber harvesting (not that we would anyway).

 

[ncbill]

Farms are another way to hold a good-size chunk of land for personal use inexpensively.

A friend bought a 50+ acre farm just a few miles outside of town...plenty of space for hunting/fishing/etc....tax laws here are such that he only pays tax on the farmhouse & the land it directly occupies as long as he generates a modest amount of revenue (IIRC, only $1,000 annually) from agricultural activities...he mostly sells hay and a small amount of livestock.