Actually, I guess it’s more of a polylemma, but whatever.
I have a chance to buy some truly spectacular land in the U.S. Land in its area has been appreciating at 8-10% per year lately, which is a slowdown from the 1990’s. This is probably my last chance ever to afford some, since it should rise faster than I can make cash to buy in. The only problem is, it will tie up almost all of my cash and will still require (affordable) payments.
Alternately, I could skip it, tell myself that not everyone can live in Malibu or The Hamptons or Clyde Hill, and put the money into more liquid assets such as stocks, gold, and so on.
If I were to plan to sell the land at some later point, I could consider it an investment, but I would be buying it to retire on, not to flip. Transaction cost is about 14% (yes, that is correct), so, considering taxes, I would barely break even, if I were forced to sell it, after five years.
Unemployment in the area is high. It is not a place where people work and live; they are mostly independently wealthy, retired, or hubbie commutes while wife and kids live at the country estate. If I were to live out there pre-retirement, I would have to have a home-based business. (There are laws and rules regulating that, too, so it might be a real bitch to do.)
What else should I consider? How dumb of an idea is it to buy this property?
Thanks for any advice (at least if it’s serious or at least really funny).