Four bright real estate investor friends of mine formed a small real estate investment company together a little over a decade ago. They invested, in part, in raw land just outside the boundaries of high growth cities. They believed as the cities grew out to them the land would become worth more. After waiting eleven years and paying the property taxes and upkeep on the land they were rewarded.
During that eleven years the money that was invested in the land was not paying them a significant income. They were able to lease the land to a farmer for almost enough to pay the property tax.
After a few years, the land had appreciated by a great deal, in part due to the growth of the cities around it and the demand for more land by a growing population and in part because of the growing real estate bubble that made it appear that the demand for more residential development would continue on a parabolic curve forever. Of course my friends recognized that this was a bubble and that it was time to get out before the bubble popped if they were to maximize their return on this investment.
These intelligent real estate investors weighed their options. They considered developing the land in several different ways or selling the land. In the end, while weighing the tax consequences of the various paths they could take they decided to sell the land in a 1031 Exchange so as not to pay taxes at that time on their gain and preserve their capital from taxes so that it would work for them rather than be wasted by a rapacious government.
Although this property had appreciated in value, it had not paid any significant income to the partnership. Eventually they found a buyer and began looking for something to trade into. They decided to find income properties and get out of land. There were several reasons for doing this, but the primary one was that they were aging and needed income for their old age. They sold the property and turned the non-income producing asset into income producing properties that yielded a six figure income.
Perhaps you are carrying non-income producing properties that could be traded for income producing properties that can shift the burden of debt payments and other expenses to the tenants while providing an income for you to live on. As property taxes and other holding costs continue to climb this is an important idea to consider.
Do you have other non income producing assets such as boats, third cars, vacation property, non-performing stocks, old inventory, jewelry, etc. that is waiting to be converted to income producing property? Now is the time to make your money work for you.
Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I promote precious metals through American Gold Reserve. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.