Author Topic: Should I buy land in my home country?  (Read 2299 times)

Tester

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Should I buy land in my home country?
« on: May 15, 2016, 12:35:56 PM »
My uncle and father have some land and they got an offer of 3000 USD for a little more than 5 acres.
That is a low ball offer even for my country.
The land is good for agriculture, is near roads...
I told my father I would buy it, but he said he does not really want to sell, his brother wants more as he is old.
I was sad to see they had to sell their parents house some time ago, but I got that - my father was living 500 km away and his brother was living 100 km away and not using the house anymore.
And at least they got a decent price.
But now this land would get them a very bad price.
I hate to see how almost everyone in my home country is selling their land for cheap, but in this case it is really really cheap.
When I looked for land several years ago I could not find good agriculture land for less than 3500 USD/2.5 acres.

Why I want to buy it - in fact half of it as my father will keep his half:
I don't know if I will live in the USA forever - this might be a good idea for a place to build a house in several years.
I was born there and that was land my grandparents owned.
The price - I would get 2.5 acres for 2000 USD.

Problems:
I am not living there so I will have to find someone to "take care" of the land. That area does not have a lot of young people who would use the land.
Most of the older population migrated back to Germany some time ago (my father and uncle did not, they stayed put :)).

I will have to pay tax on the land, but the amount is small.

My wife does not like the idea, she feels like we are tying us more to the home country instead of focusing on adjusting to the USA.


So, should I buy it or not?

tobitonic

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Re: Should I buy land in my home country?
« Reply #1 on: May 15, 2016, 12:44:58 PM »
It depends completely on where you both want to settle. It sounds like you like the idea of an escape hatch to Germany, while your wife sounds like she'd prefer to build a life in the US.

Tester

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Re: Should I buy land in my home country?
« Reply #2 on: May 15, 2016, 12:58:48 PM »
I am focused on adjusting to the USA, but I am also thinking that we might go back to Romania (that is our home country).
My father is of German origin and the area where the land is was mostly inhabited by German migrant who went back to Germany after Romania got rid of communism.

My line of thought is that at that price I would better get it. Plus I am still thinking that perhaps in 10-15 years I will go back to Romania for retirement.
At the current pace of saving we won't be able to retire in 10-15 years in the USA, we would be at the point of affording to work part time. We are working on improving this but right now I am only allowed to work for my current employer and my wife is waiting for her EAD. We have some plans for a small business but we are waiting until my wife is allowed to do it to start. Even after(if) we get permanent resident status I might not be allowed by  my current employer to have a side business so this is why right now we thought of something my wife would like to do.
We might be very close to being able to retire in Romania in 10-15 years so this is why I would like to keep that option.

At the same time we decided to sell our house in Romania which we built thinking we will live in it but we decided to leave the county for the USA one year ago :).
The house will degrade if it is not lived/maintained and at the right price it will allow us to buy something in the USA with a 30-35% downpayment (including the money we saved in the last year).
So we are getting rid of things tying us to our home country, but we are getting new ones too :).

pbkmaine

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Re: Should I buy land in my home country?
« Reply #3 on: May 15, 2016, 03:53:03 PM »
Can you or your family find someone to live there in exchange for taking care of it?

K-ice

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Re: Should I buy land in my home country?
« Reply #4 on: May 15, 2016, 05:00:41 PM »
You have lots of things to consider.


How big of a deal is $3000 USD to you?

Can you easily save that much in one month or are you in debt?

I would be very tempted to purchase it. Is the title on the land clear?

If you can find someone to rent it for just the tax yet they farm it that would be perfect.

If the taxes are a loss, worst $300/year, I would probably still go for it.

If this causes a major argument with your wife... Tread lightly.


MattC

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Re: Should I buy land in my home country?
« Reply #5 on: May 15, 2016, 05:05:37 PM »
From a strictly dollars and cents perspective, I would NOT think it's worth buying.  If you just invest the money long term it should earn 8% in a stock portfolio and it takes you almost zero effort.  In the long run, land should appreciate at a rate similar to inflation; so probably something like 3% in USD.  Plus it will be a hassle to deal with and cost ongoing money.  Even if you had a local farmer to do the upkeep and rent it for the price of taxes, you're still probably better off investing the cash since rate of return will be better than property appreciation.  Given that you would have to spend ongoing money out of pocket for this property, you could figure out what your rate of property appreciation would have to be for this to be a better deal than stocks.  I imagine you'd need over 10% annual appreciation to make the options financially equivalent, not counting your time.  Maybe if you're in the next zone of development around Bucharest, or even one of the few secondary cities that seem up and coming that 10% appreciation is possible.  But more likely it sounds like you're in a less developing area, and this investment isn't going to get you where you need to go in life.  Even if you DO decide to move back, you can't guarantee this location is where you'll want to be. 

Retire-Canada

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Re: Should I buy land in my home country?
« Reply #6 on: May 15, 2016, 08:23:33 PM »
If the money for the land is an amount you could easily give away to a friend or relative in need then do it and it doesn't really matter what happens. If the amount would cause a material change in your financial picture don't do it. It's just land and you can always buy other land like it when and if you ever want some.

Tester

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Re: Should I buy land in my home country?
« Reply #7 on: May 15, 2016, 10:20:35 PM »
Thank you all.
I will double check the details for the land to clarify some questions.

The land is in the Western part of the country, in Caransebes.
The money I will be paying does not make almost any difference in our budget - I admit that I did not run all the numbers, but it is a "small amount".
Regarding the title for the land - it is in proper order. The title is my father and his brother's names, all completely and correctly registered.

If this looks more like a sentimental thing, yes it is :), but there are still some things to think about.
And regarding buying the land when we decide to move and where we decide to move yes, this is right, we might not want to move there.
Still, I will have to get the details about the location of the land to be able to compare with what the prices are around there, I could not find land that cheap online.
All land for sale in that area is at least 4 time more expensive (and I am talking about "the same" type of land, I am not comparing farmland with building land).

electriceagle

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Re: Should I buy land in my home country?
« Reply #8 on: May 15, 2016, 10:40:06 PM »

Problems:
I am not living there so I will have to find someone to "take care" of the land. That area does not have a lot of young pe
ople who would use the land.
Most of the older population migrated back to Germany some time ago (my father and uncle did not, they stayed put :)).

Who takes care of the land now that your father and his brother own it? Perhaps the same arrangement can be kept if your father and you own it.

This seems like a no-brainer, given that you can keep carrying costs down.

Since you have a close connection to the country, and to this specfic location in the country, this land is likely to mean more to you 10 years from now than the $3000 and its returns.

Bee21

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Re: Should I buy land in my home country?
« Reply #9 on: May 16, 2016, 03:14:44 AM »
Romania is hopeless. Don't do it.