Should I sell my property?

I have an acre and a half of real estate (land only) that I listed for sale this week. The land is in a rapidly growing area of Austin. I bought it for very cheap a couple years ago. I had it listed on Monday and received 2 offers this week which started a bidding war and now I'm looking at an offer more than my asking price. I'm supposed to sign the final offer paper work tomorrow. The land is very awkward as it has a major creek running through the middle. That being said only half the property is build able due to half of it being creek level which floods quite often. The other build able half is about 50ft higher than the creek and is very usable and can be built-on but has to be started from scratch because water, gas, sewage, electrical, all have to be dug up and connected to the main lines of the subdivision next door. Building from scratch was my first goal but after researching the cost, there was now way. So, it's been sitting there for 3 years.

After talking with my brother, he thinks I'm a fool for listing it now. He feels I should sit on it a couple more years and get 5 times the offer I have now. The lot is about 3 blocks off a main highway and he feels that eventually a commercial buyer will come along and want to build condos or something similar. I understand his thinking because Austin is growing and the location is very desirable.

So my questions are...

1. Is it possible to find out future plans that the city or builders may have for developing an area or plot of land? I'm curious if the potential buyers know something I don't know and that's why they want it so bad.

2. Should I sell or should I find another way to get my self out of debt. I don't want to get greedy but also don't want to have regret 5 years down the road.

I bought the property as an investment property. I'm in need of $ because my debt keeps rising and I'm sick of struggling. I'm also 2 years behind on property taxes which is another reason I need to figure something out.


Not sure what the best move is at the moment, or what I should do. When I bought the land 3 years ago there was no interest for that seller. His starting asking price was $90k and slowly worked down to $20k and then he just needed it gone and I bought it for less than half of that. I'm now the seller and I was expecting to not have much interest but with it being the first week it's been listed we've been offered more than our asking price. I have a wife and kids and $ is tight with debt piling up, so selling it makes sense when I think about them, but it also makes me wonder what the potential earnings could be 5 years down the road. I don't want to be greedy and scare these interested buyers away, nor do I want to miss out on an even greater return on investment if I were to wait.

Any input is welcome

 

It sounds like you are in a good situation having a couple of different options. I have been doing real estate, specifically land and development properties for almost 20 years here in the Seattle area. Here is the advice I always give to potential land buyers. When buying land always have a specific purpose in mind including a timeline. I usually advise people not to buy land just as an investment.
Rules for land development change over time. Sometimes it increases value but sometimes it makes property undevelopable. In this area rules for building near streams get stricter every year and I know a lot of people who now have very pretty but useless land because it has a stream on it.
If you have a good offer now I think selling is a good option. You may be able to use part of the money as a down payment on a cheap rental property which is a better investment because it brings money in each month as well as going up in value.
This is just my opinion because I don't know the local situation there but I think there are better uses for your money unless you plan to develop yourself or unless you know for sure environmental rules will stay the same and you now value will go up.
Good luck

 

Thanks Chris! I was hoping to get some info from someone in real estate. I'm 90% leaning toward going forward with the selling process

 

If you can swing it, keep it for a few more years. But, if you're really struggling, then sell it.
You might want to research what the city/county's growth plan is. If development is something that is still going to be going on for the next several years, then it will only go up in value. If the county if hitting its max for development for their growth plan, then it might be a good idea to sell now.
You might also want to check with your local RCD (resource conservation district). They are a non-regulatory agency that helps landowners with resource issues on their property. Now, you might not have any specific problems but you might want to ask if they have any information about the creek that runs through it or water rights. They might not know a damn thing but I know the RCD I currently work for has a LOT of knowledge about everything I have mentioned.
But, at the end of the day you need to provide for your family. If that means selling the land, then sell it.

Good luck though!

 

If you can swing it, keep it for a few more years. But, if you're really struggling, then sell it.
You might want to research what the city/county's growth plan is. If development is something that is still going to be going on for the next several years, then it will only go up in value. If the county if hitting its max for development for their growth plan, then it might be a good idea to sell now.
You might also want to check with your local RCD (resource conservation district). They are a non-regulatory agency that helps landowners with resource issues on their property. Now, you might not have any specific problems but you might want to ask if they have any information about the creek that runs through it or water rights. They might not know a damn thing but I know the RCD I currently work for has a LOT of knowledge about everything I have mentioned.
But, at the end of the day you need to provide for your family. If that means selling the land, then sell it.

Good luck though!

 

Do you need the money?

Guessing what any town will do is just that a guess. If Austin is like most town the elected leaders / planners change. That said, Austin does seem to be pretty regulated (from what I've read for Texas).

If I were selling, I'd be selling soon. If the fed follows through with the tightening of money after December of this year I somewhat expect a down turn (across all markets and sectors). If the fed decides to keep dumping $ then it's not such an issue.

The other thing about ground is, there's no more of it being made. And if ebola and the terrorist don't kill us all off than the increasing population should drive prices over the longer term excluding local exceptions for condition and zoning.

So there you have my opinion which is...I don't know. I guess if I needed or wanted to use the cash, I'd sell it in the next few months otherwise, I might be prepared to hold onto it for a while.

 

A bird in the hand is worth two in the bush. You posted that you are struggling with debt piling up, and behind on property taxes, sell it and don't look back!
Couda, shuda, wouda, don't pay the bills!!!!!!
JAO

 

Property in the Austin, TX area is only destine to rise . How much do you need the money?

 

2 years behind on property taxes...that's my answer right there. If you can't afford taxes now, can you really expect to be able to do so in the future? How long do you have before the city forecloses and sells it in a tax sale? In some states it's as little as 3 years. You could lose the property for nothing if you're not careful.

 

It's a great piece of land that I can see why it would be wanted now. Just in the past 5 years the location of the property is now almost central Austin. Like I said before, the whole plan when I bought it was to sit on it for years and sell 20 years from now. I've exhausted my loan options and need to pay those off before I could even afford to pay the property taxes which went from $400/ year, and now it's up to $2400 a year. After paying monthly credit card bills along with normal bills (we've cut back on those as much as possible) it leaves us with enough to get buy. I think the best thing for our family would be to get it sold. I'm actually scheduled to close on the 10th so if all goes well it should be done by then. I bought it as a cheap investment and hopefully it'll give me 10 times what I put into it.

The part that makes me wonder if I'm doing the right thing... I bought it for $8K and now selling it for more than 10 times that, that's in just 3 years of ownership and minor improvements. I wonder what it'll be worth in 5 years, or 10 years, or 20 years...?
That's what has me questioning my decision to get rid of it now.
I guess I have no choice really, kinda need it. I've never been in debt but now I owe about 10k in credit cards and other bills I'm behind on. I think this being my first time in debt is making me over react about the whole situation.
I know some people will say 10k is nothing but for me to owe $ makes me really uncomfortable. If it was a credit card I knew I could pay off quick, that would be different. In my case I'm afraid it's gonna keep going up if I don't take care of it now.

If this does go through and we close next week then I plan on buying another piece of real estate to keep as an investment for as long as possible.

I'm rambling on, kinda typing my thoughts as I'm contemplating my decisions in my head. Thanks for y'all's help! Everyone's opinion has made me think a lot

 

Do you have a 65? I had one with a 289, auto, with working factory AC. It was my first car up until a year ago. I had it parked at my uncles dealership, and it flooded, water was up to the roof. After that it was too much work so I sold it. It was in great shape, even after a announcing water damage it still brought $4,000 at the auction. These are great cars, it was always my trusty backup vehicle and weekend vehicle, always started on 1st try for all 12 years I owned it. I miss it now.

 

You can debate a million times "what will it be worth in X years" until you are blue in the face. The key here is that you are in a precarious situation as it is with the property tax. You could risk losing the property and getting ZERO for it. Right now you mention getting 10 times what you have in it. That is a 1000% profit. Pretty dang good numbers I would say. If you could afford to hold onto it without any undue financial strain, then I would say hold onto it. But since you are already in a bad spot, the best thing to do is take your profit and walk away.

 

Talk to all the people in AZ, FL, CA, NV, MN, and other states who thought their property values would do nothing but climb, circa 2008. Or farmers whose ag land values tanked in the 80s after a strong 70s. You've made 1000% return in 3 years. The key to good investing is knowing when a bubble is going to hit and selling high, not holding too long because you think returns are assured and then getting screwed when the market tanks. Personally, I'd sell even if I didn't need the cash. That kind of return is great, and allows you to keep reinvesting.

I do, yeah. It's also a 289, auto, factory AC/console car. It was my first car too, about 13 years ago. I just dumped a bunch of money into making it a way better driving car, actually. I have a very weak build thread on here about it. Check it out!

 

Exactly, I'm telling my self the same thing.

My realtor said the exact same thing about the "bubble" and "knowing when to sale".


Thanks for the reminders guys. It helps put my situation into perspective
And reminds me that this is what I "need" to do.

 

SELL IT! To be a winner in the real estate game you need to know when to get out. 1000% over 3 years equals a bubble. I know Austin is great location but I would be shocked if we didn't get anther market correction before the end of 2016. Plus you are behind on its taxes and have other debts. Take the money! Do the right thing and get yourself out of bad debt (i.e. debt that doesn't make you money).

 

War Eagle

 

Oh I sold it. It was a great deal and Debt was piling up. Sold it a couple
Months ago and am now debt free with a hug down payment just waiting to put toward a new house. Also want to use some of the funds to buy another cheap piece of property and try to sit on it for as long as possible.

 

Debt free at 30--Smart move!

 

Smart move.

Only speculate with what you can afford to lose without being bothered at all.

 

OP. I used to live in Austin a few years ago (okay actually in Lake Travis) and my sister is a realtor there still. I talk to her and she is convinced that real estate values are in for a big correction in the next few years. I would say sell it now and move on. Travis county is over valued and with all of the people moving there the issues of traffic and over population will likely cause some stagnation of property prices versus surrounding areas.

I would say sell it!