Sell My Land To Get Debt Free?

[bbqfan5909]

Hold, that land will continue to grow.

[Mudslinger]

Might want to think of this land as your retirement account if you do not have one started. Land will increase in value unless everything tanks. A lot of retirement accounts are taking it on the chin right now.

[bcmuzzy]

We bought our land in 2020 in Oklahoma, it’s more than doubled in value. All we owe on is our primary residence and our Oklahoma property. When we retire, in about ten years, our plan is to sell our primary residence, and build and pay off our land in Oklahoma.


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[RiverRat1]

He already invested the money….in the land

It’s more than doubled in the last couple years.

What investment is better than that?

The problem IMO if he sold the land he may pay off debt but there's a near zero percent chance he'd be able to put the 3k each month into a mutual fund (or other investment).

When you own land and the debt you HAVE to pay the note. When you have an extra 3k in income each month you're free to spend it on whatever. Every single person has a good excuse to not invest, most have excuses every month.

Even if one could get past the new car, truck, boat, deer lease, or whatever makes them happy if you have cash you get zero help when a tragedy strikes. If all your money is in land you can get help. This may sound dumb but I bet it happens to 1 out of 3 people in their life.

[tdwinklr]

Its @$40k to the man and leaves @$28k in the bank.

$40k to the Feds? Whew, no way! Like others said, land is getting harder to find. And there are plenty other ways to become debt-free!

Good luck sir.

[Longue Carabine]

It's been forever and a day I've wanted my own land. God blessed me with 23ac a little over two years ago. We paid $175k then and land prices have jumped since. The place next to us sold for $465k a few months back. Drinking some beers one evening we joked that if offered $500k we sell it. Well .... now we are being offered $450k on it.

I hate to sell it but thinking we could get debt free and start saving to buy land again one day. Current debt is our primary house, 2 auto loans, and the 23ac farm total $380k. I know we will get hit with cap gains tax. But current income $120k with $650 a month positive cash flow. If we cashed out and paid off all debt that changes to $3500 a month cash flow. I'm 46yr old so still have a "few" years b4 I retire.

Thoughts?

Land prices in Texas are just going to keep increasing. There may be small dips here and there, but in the long term, it will keep appreciating. Too many people moving here and too many investment companies buying it up. Just yesterday I heard that Kyle Bass' firm bought up 37,000 acres across the state. Sadly, most of the companies will just develop all of the land they're buying.

[dhall1414]

(emphasis mine)

In 20 years what will the property be worth?

That’s what a lot of folks miss about owning land….it’s an investment vehicle that continues to appreciate.

I could see 23 acres in bastrop being worth $1mm in the next 10 years.

Look at the big picture…your thinking by selling you will eliminate payments, but really you are cashing in an asset to do so and negating any future growth potential


Honestly unless you have a good 401k or IRA it’s probably the best asset you currently own.

I’d sell your cars and buy cash vehicles before I sold the property.

me and txtrophy85 are on the same page. what mutual fund can even come close to the growth performance of land?

i'd like to point out something no one else has yet. no one seems to be taking inflation into account. your debt is denominated in US dollars and at a fixed quantity and interest rate. therefore inflation is going to help you as the relative value of the debt will go down over time. look at the numbers just this past year, how many months are we over 8% year over year for inflation?! if you sold and put cash into a mutual fund and got 7% annual return you just lost money due to an 8% inflation!!! i looked it up the other day and we've had 16% inflation just since 2019! sure you could be a millionaire after who knows how many years but what's the point of being a millionaire when a loaf of bread costs $100 and filling up your tank is $1000? you'd have to be a 10 or 100 millionaire to live the same lifestyle that having a million would right now.

cash has no intrinsic value! the govt has printed something like 80% of the current supply of us dollars just in the past few years. you're in debt to own tangible things with true value. money is just a way to keep score. as money becomes more and more worthless the fixed value of your debt will too.

if i were you i'd hold onto that land for dear life. sell your new vehicles and buy cheapo replacements. sell the house and live out of a camper or trailer or something, and build on the land. yalls income from labor will scale up as the value of the dollar scales down.

if anything else you can always sell the land later, and at an even higher price. but don't unless it's an abject emergency.

[Tom]

Sell. no question. stock market is down or going down. Cash is king and good time to get into the market coming soon. the value of land will not go down but the ability to sell will fluctuate. Having "hobby land" cannot exceed net worth.

think about it and make the decision that works for you and your family.

[andre3k]

Our current debts listed below.
House in town $170k
Car $3,500
Truck $35,000
Land $170k

Total Debt $380k

Offer on the land $450k

I wouldn't sell land over that. I'd find a side hustle, get a second or third job and grind it out until that stuff was paid off. The car and truck are "normally" depreciating assets, land....not so much.

[Mike D]

Guess you missed the post about we have been paying off debt the last 5 years. So far $100k that was credit cards and some of my wife's car. We owe $3500 on her car now and that's where the current $650 a mo cash flow is going so only a few months left. Then we will have $1250 a month to put on my truck to get it paid off. We have $20k in savings for emergencies. So not going back there again ever.

I just don’t think I could do it. It looks like you have a plan and are tracking to be debt free anyway. I would stick with your current plan. If after you pay off your other debts, you can still sell the land at that point.


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[tps7742]

No amount of money is worth 20 good years of life you enjoyed. Just my opinion. That 7 figures plus you are talking about doesn’t mean much if you are laying in the hospital and don’t have a clue what your chances of survival are. Believe me I know. Just enjoy life and make good sound financial decisions. You will be old before you know it. Do t sell it unless it’s causing you financial troubles.

[stringmusic]

If your land has appreciated that much, might your home have appreciated as well? Terrible interest rates right now but if you can suck it up a few more years and pull the equity from your home when rates dip, pay off all the little bs stuff you have, and stick the rest of the cash in an interest bearing account. I personally would re invest it but it sounds like you like the savings account idea and liquidity. Thats cool too. You will be a little more liquid, still own the best investment you have made, still own your home, the second best investment you have made, and be debt free, or near it. Ramsey gets paid alot of money to tell people to be debt free. A mortgage payment on land and even homes in the right area bought at the right price, and financed at the right rate, are hardly debt in my opinion. Hedge, at best. If you need extra income, based off what I have seen on this website over the last few years, someone out there will pay you $3,000 to lease that 23 acres to bowhunt on! Take that money and pay your wifes car off. Then snowball that on your truck. Keep it rolling until you feel good. Then tell the leasee to get their stands off your property cause you are ready to hunt on it again.

[Jamvo]

I’d drag a tiny home out there and air bnb it. Form and LLC and write off expenses including your vehicle expense trips out there.. Once you’re debt free you probably won’t have any write offs.

Lots of ways to look at this.

[camoclad]

So you take the cash. Pay the man. Loose Ag/tax haven. Loose right offs (land and house). Pay the man some more. What's inflation at? Etc... don't do it.

Have you done a simple net worth calculation for now, after sale?

Glad yall are attacking bad debt but Dave doesn't say much about good debt. You've graduated from Dave's advice imo.

[bowhunterhelm]

5 years ago I did exactly what you are thinking through now. I had a lifelong dream to own hunting land. I bought it back in 2012 and sold it 6 years later in 2018 when my wife and I realized that although we'd been on the Dave Ramsey debt free journey since 2010, we still had our house debt. So not really 100% free of debt and quite honestly, had no business owning that land when our retirement was not secured.

We sold our 65 acre piece of hunting heaven in KY (with the cabin that I built on it) and paid off our house. The feeling of total freedom and empowerment that came from that decision is indescribable.

But, more importantly, the math for you goes something like this:

Take that $3K a month you just freed up (at least that seems to be what you said you'd have freed up) and invest it in a reputable mutual fund with a 10-year (or more) steady history of 7% average annual return on your money. This is a pretty conservative number and there are dozens of funds that are highly rated (by Morningstar, etc.) that have this return (or higher).

If you go to any online interest calculator, you will see that if you invested the $3K each month you freed up by selling the land, over the course of 20 years when you retire (you said you were 46), you will be a millionaire. Your money will equal $1,457,837.72. I do believe that'll get you a nice piece of property when you're ready.

Feel free to PM me if you have questions. Happy to chat on a call, as well.

Good luck whatever you decide. Good that you're thinking this way about your future rather than just letting it happen to you.

In 20 years, I bet the land will be worth more than 1.5 mil.

Keep the land!