There are many great ways you can reinvest the proceeds from the sale of your Raleigh house. In our latest post, we look at some options for making your newfound cash work for you!
People sell their homes for various reasons. They sometimes need money right away to pay a debt, and sometimes they find themselves with an unexpected surplus available to use elsewhere. Instead of spending this money on things that come and go, why not reinvest your earnings into something that will benefit you in the long run? We’ll go over some of our favorite ways to reinvest the proceeds from the sale of a Raleigh house below!
Real Estate Crowd Funding
A great way to reinvest the profits made from your Raleigh area house, is to put the money into a real estate crowdfunding opportunity. While you should conduct due diligence on any investment before sinking your money into it, investing in a real estate crowdfunding opportunity can be a passive and hands-off investment that can really pay off.
There is no greater investment than that in the future of your children. Contributing to a 529 plan or a designated college fund not only contributes to your child’s future but also teaches them a financial lesson. The money invested in a 529 plan grows tax-free and is not taxed upon withdrawal. Many families set aside funds for their children’s college educations in advance, so they are not surprised by huge bills when their children begin college careers.
A Rental Property
When you sell one home, it’s a good idea to reinvest in another. Not only will you avoid capital gains taxes this way, but you will also be able to find a rental property that really performs well and generates a substantial profit for you. If one home or investment property isn’t working, maybe it’s time to try something different! When you find the right rental property in Raleigh, you’ll be able to produce a nearly passive income, building on the proceeds you’ve already made from the property.
You can use the proceeds from the sale of an underperforming rental to improve your primary residence. Increasing the value of your home while also adding a feature you will personally enjoy is never a bad thing. Whether you want to upgrade an outdated kitchen or repair an old roof, now is the time to get started. While you may be subject to capital gains taxes if you decide to spend the money on improvements, you will be able to deduct your home improvement costs. Plus, in order to face capital gains taxes, you would need to make hundreds of thousands of dollars in profits.
Pay Off Other Debts
Do you have high-interest debts weighing you down? Now is the time to put them to rest once and for all. Paying money to borrow money doesn’t usually make sense. While carrying a mortgage can actually help in some financial situations, having a high-interest loan or credit card doesn’t.
Before you go and spend all of your proceeds, don’t forget about the looming tax man. When you reinvest your proceeds into a “like-kind” investment, you will be able to avoid capital gains taxes. Keep in mind the tax implications when you reinvest the proceeds from the sale of your home. You should always consult with your financial planner or CPA before making any financial moves.