Wife and I will be retiring in 10 years or so. We are already thinking of moving from our current location, maybe before then.

We recently sold some real estate we had in Auburn (it was a mobile home in a trailer park, but hey, it still counts as real estate )

When I went to deposit the sale proceeds in savings, my credit union suggested investing some money in a money market account, which pays more than standard savings accounts.

Recently, we found some property (sizable residential lot) in rural Shelby County (where we might move to) that we could put a decent down payment on and finance the balance for a short term. I think this property could be re-sold quickly if circumstances warranted it.

From an investment standpoint, what would have the best return between them, say in 5 years? That would interest earned in money market, versus profit if we sold the lot.

Just wanting feedback on this, from others who may have done it.

Thanks.

What are the rates at your CU?  Check CD rates as well, sounds like you want to play it safe, short term land is Not safe in my opinion, land is 10+ year buy and hold.  Go the CD / money market route, or if you want some risk and you have 10 years , pick out a balanced boring mutual fund.  Good luck and good topic.

-also Wait until after November to make any Big money moves, just saying... volatility

Well, right now my CU offers the following rates:

Savings: 0.25% paid quarterly
CD: 1.6% paid every 6 months
IRA: 0.8% paid monthly - My IRA sucks.
Money Market: 1.25% paid monthly

If I invested $20K, the MM would pay me roughly $1,282 at the end of 5 years, providing rates were stable.

So, if I bought property at $20K, would it appreciate more than that over 5 years?

Safe bet money market and wait to see if rates hike up in cd world, this close to retirement you don’t want the risk of any volatility, land is great, but requires all cash to buy or construction loan, no banks giving loans for vacant lots, this greatly limits your potential buyers.  Paid off home is the key to a successful retirement plan.  My opinion.

Our current house should be paid off in about three years. We had it built on a lot we bought two years earlier. It will need a few repairs (probably a roof) before we sell.

The area we saw this property in is near Chelsea in Shelby County. A coworker lives a stone's throw from there and said the area is starting to grow quickly. Ironically, we lived in Pelham from 1992-1996, but moved down near Montgomery to be closer to family. Shelby County was booming back then as well. We sold our Pelham home for $19K more than we paid for it four years earlier.

Now, we want to be near our oldest son and DIL and potential grandchildren.

I may be having a foggy brain morning -- but what is the math to get you to $1282 after 5 years?

Land Co-ops are loaning on timber land or future homesite development - paying on one now.  :)

Where are you getting a 1.25% MM.  Most MM rates now are half that.



ETA: never thought I'd be excited to see 1.25% interest.

I accessed my CU site. They have a "sliding scale" on MM interest rates, based on the amount that is invested. They also had an online "interest earned" calculator. I input the MM investment amount and time, and it gave me the "effective APY" and the interest earned for that time. That's where the 1.25% and $1,282 came from.

So it's a APY, not a monthly interest.

What is the interest rate for timber land loans?

Mine is 6.5%.  That's on a 20 year loan