The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: leevs11 on September 15, 2016, 02:47:14 PM
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What are your thoughts on buying land in a small town or more rural area with the idea to pay it off asap, then build a home. The idea would be to own the home outright or close to it within 10-15 years and retire in the lower cost of living area.
The area is about 3 hours from where I'm currently living and located in a popular tourist area. Think cabin on a lake.
Does this make any sense? Would it be better to just look to purchase a similar home? My thinking with the land is to take it a bit at a time. Pay the loan off, then start with the home building process once we were financially ready.
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I think 10 to 15 years is an awfully long time to decide that it is a good deal to buy the land first. Also, if it is a popular tourist area, I doubt it is overall cheaper. Check real estate tax rates, minimum water rates, gas rates, etc.
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More or less: this is exactly what we did.
We bought a bit of land near where our parents live back in about 2005. It had a 30x40 workshop on it with a very minimalist 600 sqft apartment inside. We used it as a weekender house. In 2006, we sold most of what big items we had, quit our jobs and leaped. We lived very minimally from 2006-2009, as it took that long to find reasonable employment. (My skills are relatively niche skills that don't really exist in small towns.) When our house sold, we owned the land outright with a bit left over.
We lived in the tool shed from 2006-2012. We started building a house in March 2011... and it completed right around the first of 2012. We had enough stashed away to just pay cash and that's what we did. We did a reasonable amount of the work ourselves, which made the build take longer. We also didn't complete the house 100%. (We left the upstairs unfinished.)
FIRE was in July 2015. The house is probably 85% completed. There is one room that is still not complete. We've started fostering cats, so... the cats live in that room. It will probably get a little bit completed between each batch of fosters, but the fostering has definitely slowed the process.
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If it's going to be a rural town, I wouldn't buy 10 years in advance. I would use that money to invest to get to FIRE quicker. Then maybe 1 year before FIRE, I would buy the land.
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There will be plenty of rural land available in 10 years, and it will cost about the same as it does now.
Stocks/bonds/etc will probably be worth a lot more in 10 years than they are now.
Which one would you rather buy now?
-Walt