We’ve got $700k in cash, $1.6 million in brokerage, and $400k in unused land – is 2025 the year to cash out or keep building?

It’s a common dilemma for many folks who’ve inherited a big chunk of land: should one sell it and add to their retirement nest egg, or double down by building something on it to produce another cash flow stream? Indeed, it’s a tough call for many, and while the latter move may be the wisest […] The post We’ve got $700k in cash, $1.6 million in brokerage, and $400k in unused land – is 2025 the year to cash out or keep building? appeared first on 24/7 Wall St..

Mar 18, 2025 - 00:24
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We’ve got $700k in cash, $1.6 million in brokerage, and $400k in unused land – is 2025 the year to cash out or keep building?

It’s a common dilemma for many folks who’ve inherited a big chunk of land: should one sell it and add to their retirement nest egg, or double down by building something on it to produce another cash flow stream?

Indeed, it’s a tough call for many, and while the latter move may be the wisest decision, it doesn’t come without its fair share of risks. Also, someone who’s looking to retire with adult children in college may not wish to take the path that entails heftier near- to intermediate-term expenses.

In this piece, we’ll look at a well-off Reddit user in their 50s with plenty of assets and a $400,000 patch of unused land. They’re wondering if they should sell the land or build on it. Whichever route they choose to go, it’s likely to be the wiser move than standing pat with so much wealth tied into an asset that’s not effectively being put to work. Of course, there are opportunity costs that accompany selling off the patch of land, especially if stagflation and recession are in the cards.

Key Points

  • This Reddit user is weighing what to do with their big plot of unused land.

  • Building isn’t always the right move, especially given the magnitude of expenses that could be incurred.

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What to do with the big patch of land? Turn it into a cash-producing property, sell it off, or leave it as-is?

In any case, I think the right move is more a matter of lifestyle than anything else. In addition to costing a fortune (the Reddit user will likely need to borrow a considerable sum), rebuilding a patch of land entails a lot of effort. And for someone who’s looking to wind down for retirement, selling the land may be the more convenient move, especially for those who aren’t comfortable with putting too much of one’s net worth into one asset class: real estate.

Though there’s no one-size-fits-all solution, the Reddit user should sit down with a financial planning pro who’s well-versed in real estate projects. Indeed, the inherent costs could easily exceed one’s original budget, especially if one has zero experience with ambitious real estate builds.

As such, consulting a pro is a way to better gauge the full extent of the costs and risks one will have to bear by moving ahead with an ambitious project at a time when one should be putting the finishing touches on one’s retirement nest egg. In any case, the big question is whether passive income (rental payments) from the property that one will receive in the future outweighs the hefty bills one will need to put up in the near term.

In the interim, perhaps it’s best not to rush a decision. Leaving the land unutilized may be less than ideal, but making a rash, costly decision at a whim seems like the far worse move, at least in my view. In any case, I’d think very carefully about the decision and hire the right folks (specifically, advisors and builders) to give you a better gauge of final costs so that you can better gauge the risks prior to signing the dotted line.

There are simpler, more efficient ways to bet on real estate.

There are easier ways to bet on real estate that doesn’t entail going into debt, selling off a portion of one’s investments, and taking on costly projects. If the Reddit user can sell their land at or around market value ($400,000 or so), they can use the proceeds to bet on a diversified portfolio of real estate investment trusts (REITs), which, I view as a more efficient, liquid, and less intensive way to bet on real estate.

Why put it all on one investment property when one can bet on a broader basket of real estate projects at a low cost? The Vanguard Real Estate ETF (NYSEARCA:VNQ) boasts a mere 0.13% expense ratio and allows investors to bet on close to 150 names across a wide range of real estate sectors.

Indeed, it’s not just residential where there’s rental income to be made! Still down around 20% from its 2021 highs, the VNQ stands out as a fantastic pick-up while it’s yielding 3.66%. For a retiree who’s looking for less stress and more efficiency, selling the land and using the proceeds to invest in such an ETF makes a lot of sense, in my opinion.

The post We’ve got $700k in cash, $1.6 million in brokerage, and $400k in unused land – is 2025 the year to cash out or keep building? appeared first on 24/7 Wall St..