Sell Stocks to Buy Land?

Question

Here's a thought....read an article, and the takeaway was to sell stocks high and buy real estate low. As a real estate agent, I can understand the small window where that could happen.  I read about the "January Effect" and am thinking this might be a good opportunity.

I'm looking at buying 2 lots in a developing area, where the county is adding septic. The 2 properties are next to one another and look to part of a new home community-or at least adjacent to one.

Thoughts on selling stocks to buy and hold land for a year or so?

Account Closed · Answer

I'm biased. I've never owned any stocks. I don't trust the stock market.That being said, I'd look at the tax hit if you cash out your stocks. It depends on the stocks you hold, your cost basis, your goals, how much the land will increase in value. Your time horizon and what you think the stock market will do.It's all just numbers really. Use the numbers that work for you.Except that I don't trust the stock market. ;-)

Mya Toohey · Answer

@Lisa Treadwell

Hello Lisa, I am also an agent but in the Tampa Florida area.  There is a lot of land that you can use an USDA loan for which really helps out if wanting to buy low with low rates.  The question is; what are you going to do with the land??? Build new builds or try and flip it???  Depending on where you buy, you could build a cabin or prefabbed home to use for a vacation home or (STR/AIrBNB/Vrbo) Short term rental...

All the Best,

Mya

Lisa Treadwell · Answer

Ha! Fair enough. The tax hit is why the article I read encouraged readers to sell when stocks are low. This will make the tax hit less. I'd like to hold the land b/c it sounds like the city is adding sewer lines (I'm still researching this), which may increase the value. There is development all around the area, too. It's in a capital city, close to the interstate, etc. All signs lead to the value of the property increasing. I'm not looking to get rich, just looking to be more strategic and get a better return than the stock market. May need to hold it for a year or so. You're right, though. Need to look at the numbers closely. Thank you!