Author Topic: Is there a way to determine when to invest proceeds from sale of rental property  (Read 1537 times)

dough

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I just sold my rental property.  After paying all our debt off and closing fees, I will net about $410K.  I am thinking about opening a Betterment account per MMM blog posting and investing it all at once in the asset allocation MMM wrote but was thinking or hoping someone would have some advice given that I am hearing the market may be overvalued today.   

forummm

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I don't have rental property, but I hear that you can avoid capital gains taxes on a sale if you put the funds right into another rental property. Is that correct? Is that something you want to do here?

As far as the market valuation goes, I would just invest it in line with my asset allocation. If you don't have one, you should decide what that looks like for you. If you don't need the money to live on in the next, say, 10 years then it probably doesn't matter whether the market is slightly overvalued or not. You'll collect dividends in the meantime, and the market will probably go up in the next 10 years, even if it takes a dive or two in the meantime.

Dodge

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I just sold my rental property.  After paying all our debt off and closing fees, I will net about $410K.  I am thinking about opening a Betterment account per MMM blog posting and investing it all at once in the asset allocation MMM wrote but was thinking or hoping someone would have some advice given that I am hearing the market may be overvalued today.   

I recommend you learn more about investing.  If you're worried about the market being "overvalued", you're already on the path to making wealth-destroying investment decisions.  Watch this series of short videos, particularly the one on market timing, before moving forward:

http://www.bogleheads.org/wiki/Video:Bogleheads®_investment_philosophy

tj

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I just sold my rental property.  After paying all our debt off and closing fees, I will net about $410K.  I am thinking about opening a Betterment account per MMM blog posting and investing it all at once in the asset allocation MMM wrote but was thinking or hoping someone would have some advice given that I am hearing the market may be overvalued today.   

You obviously need to set aside $$$ for your federal and state capital gains taxes, and depreciation recapture, etc.

arebelspy

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This is just a classic "time the market" question. Do a search on these forums for "should I invest now or wait" or "is the market overvalued" and you'll find lots of discussion to help you.

Bottom line: invest in your AA based on your IPS, and stick with it. Don't try to time the market.

I don't have rental property, but I hear that you can avoid capital gains taxes on a sale if you put the funds right into another rental property. Is that correct?

No. It needs to be set up ahead of time in a 1031 exchange and done through an intermediary.
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