4 ms·

I have two houses paid off in the Seattle area. I'm tempted to sell them (I rent one out), but I don't know what I'd do with the money. I could hold and wait fo

I have two houses paid off in the Seattle area. I'm tempted to sell them (I rent one out), but I don't know what I'd do with the money. I could hold and wait for a downturn and buy again but that seems risky.

darawk 8y ago
Keep in mind the tax implications. You basically can't sell real estate without immediately turning around and buying more real estate via 1031 exchange, unless you want to pay a massive capital gains bill.
a_wild_dandan 8y ago
The recession is coming. We're in the 2nd longest expansion in US history (at ~10 years), and the contraction is on the horizon. Liquidating a property now, waiting for the recession to hit, and sticking the money into a low-fee index fund seems pretty reasonable. Maybe a financial advisor could check in and let us know if that's a valid strategy? I've been thinking of doing something similar.
- Bombthecat 8y ago
  I'm not so convinced that we are entering a recession. I think we will more likely enter a dystopian phase to squeeze out more money from the workforce.
  - claydavisss 8y ago
    I agree that for the dominant tech titans, reducing costs is the next phase. Amazon has saturated the US market for Prime accounts...Apple has found a near-term ceiling for phone prices...etc etc The most obvious tool for juicing margins in the next two years is in reducing costs (headcount or salaries)
    - hedvig 8y ago
      Why can't the overlords just accept current profit margins?
      - deleted 8y ago
        [deleted]
      - WJW 8y ago
        It's an unstable condition in a game theoretic sense, because if you don't push for a higher margin when you have the chance, your competition might and then you go out of business altogether because they can outspend and outinvest you. So you always have the incentive to optimize margin as high as you can.
- claydavisss 8y ago
  When enough people start wondering about a recession, one is assured
- twblalock 8y ago
  A recession is always coming. It is nearly a certainty that there will be one at some point in the future. That is not a good argument for liquidating investments now, because nobody knows when the next recession will happen, how bad it will be, and how long it will last. A lot of people have missed out on big market gains over the past few years because they wanted to protect themselves from a recession. It's a poor long-term investing strategy and it's based purely on guesswork, unless you own a time machine.
- nostromo 8y ago
  If you think we're at the top of the market, liquidating property, paying taxes on the gains, and then putting money in an index fund isn't great advice. In 08 the S&P tanked 50%+, while housing (measured by Case-Shiller national home price) only dropped around 18%. In desirable cities the housing correction was even smaller. In any case, bull markets don't die of old age, they die from recessions.
dmoy 8y ago
You could also liquidate them, put stuff away in the market without waiting for a downturn, and probably be fine. Timing the downturn is usually not possible. What's the phrase? Time in the market beats timing the market.
kurtisc 8y ago
Isn't having about half of your gross worth in one city's housing market more risky?
- twblalock 8y ago
  How do you know the houses are so much of his net worth?
  - kurtisc 8y ago
    I don't, that's why I said about.
twblalock 8y ago
I would keep them. You get rental income, and they are likely to appreciate in the long term. They are paid off, so your expenses should be low. You can't liquidate them without paying taxes on the gains unless you use the money to buy more real estate, which seems to defeat the purpose.
redisman 8y ago
I'll take one off your hands
liftbigweights 8y ago
If you have two houses paid off, then you are way ahead of the game. So I wouldn't take any advice from any of us and just keep doing whatever it is that got you where you are.

darawk 8y ago

Keep in mind the tax implications. You basically can't sell real estate without immediately turning around and buying more real estate via 1031 exchange, unless you want to pay a massive capital gains bill.

a_wild_dandan 8y ago

The recession is coming. We're in the 2nd longest expansion in US history (at ~10 years), and the contraction is on the horizon. Liquidating a property now, waiting for the recession to hit, and sticking the money into a low-fee index fund seems pretty reasonable. Maybe a financial advisor could check in and let us know if that's a valid strategy? I've been thinking of doing something similar.

Bombthecat 8y ago
I'm not so convinced that we are entering a recession. I think we will more likely enter a dystopian phase to squeeze out more money from the workforce.
- claydavisss 8y ago
  I agree that for the dominant tech titans, reducing costs is the next phase. Amazon has saturated the US market for Prime accounts...Apple has found a near-term ceiling for phone prices...etc etc The most obvious tool for juicing margins in the next two years is in reducing costs (headcount or salaries)
  - hedvig 8y ago
    Why can't the overlords just accept current profit margins?
    - deleted 8y ago
      [deleted]
    - WJW 8y ago
      It's an unstable condition in a game theoretic sense, because if you don't push for a higher margin when you have the chance, your competition might and then you go out of business altogether because they can outspend and outinvest you. So you always have the incentive to optimize margin as high as you can.
claydavisss 8y ago
When enough people start wondering about a recession, one is assured
twblalock 8y ago
A recession is always coming. It is nearly a certainty that there will be one at some point in the future. That is not a good argument for liquidating investments now, because nobody knows when the next recession will happen, how bad it will be, and how long it will last. A lot of people have missed out on big market gains over the past few years because they wanted to protect themselves from a recession. It's a poor long-term investing strategy and it's based purely on guesswork, unless you own a time machine.
nostromo 8y ago
If you think we're at the top of the market, liquidating property, paying taxes on the gains, and then putting money in an index fund isn't great advice. In 08 the S&P tanked 50%+, while housing (measured by Case-Shiller national home price) only dropped around 18%. In desirable cities the housing correction was even smaller. In any case, bull markets don't die of old age, they die from recessions.

dmoy 8y ago

You could also liquidate them, put stuff away in the market without waiting for a downturn, and probably be fine. Timing the downturn is usually not possible. What's the phrase? Time in the market beats timing the market.

kurtisc 8y ago

Isn't having about half of your gross worth in one city's housing market more risky?

twblalock 8y ago
How do you know the houses are so much of his net worth?
- kurtisc 8y ago
  I don't, that's why I said about.

twblalock 8y ago

I would keep them. You get rental income, and they are likely to appreciate in the long term. They are paid off, so your expenses should be low. You can't liquidate them without paying taxes on the gains unless you use the money to buy more real estate, which seems to defeat the purpose.

redisman 8y ago

I'll take one off your hands

liftbigweights 8y ago

If you have two houses paid off, then you are way ahead of the game. So I wouldn't take any advice from any of us and just keep doing whatever it is that got you where you are.