There's a very small town I intend to retire to, maybe 20 years hence. Decent houses are fairly expensive there (it's near a private college) so I've been debating with myself about whether I'll buy a good house and pay top dollar, buy a bad house and renovate, or build a new one. To that end I've kept my eye on the real estate listings, just to familiarize myself so I'll have an idea about when to pounce closer to retirement.
Recently I noticed a plot of residential land for sale at a pretty decent price in terms of the location, and it got me thinking. There's a highly specific reason I wouldn't want to buy this plot, but what if a similar bargain came along in the near term and otherwise checked out as a sensible place to build a new house?
Here I'll stipulate a few things, just for clarity.
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The money I would be willing to spend on a given plot would not seriously dent my savings or lifestyle. I'm not wealthy enough to just go around buying or building houses willy-nilly, but I could pay cash for this kind of plot (if I wanted to) without affecting my lifestyle or other retirement plans.
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Property taxes are not totally negligible here (maybe $500/yr on a fairly large vacant lot) but nothing so high that it'd become a really substantial element in the total cost of ownership.
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I'm aware that there's an opportunity cost in tying up money rather than letting it run free in the markets. But I'm not bothered by spending money if it gets me something I want, including but not limited to intangible things like peace of mind and an option to build a house in a place I like rather than what's on the market at some arbitrary point in the future.
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I have no particular expectation that any suitable plot would increase in value very much. I.e., there's no reason to think I could sell it easily or profitably five years from now if I changed my mind. That said, the geography of the town is such that there aren't too many undeveloped lots in the area where building would make much sense.
Basically, I'm wondering if there are hassles with absentee land ownership I haven't considered, or if the financial downside is much bigger than I'm imagining. Bottom line, is it inherently dumb to buy land I don't intend to use for anything for a long time, or is it merely potentially, situationally dumb?
Submitted December 08, 2018 at 01:34AM by michellelabelle https://ift.tt/2L28YK8
