Hi BP Community,
I hope you're well. I own a lot in a desirable location where the market is relatively hot and build costs are ~$200/square on the low side. We placed a FSBO sign on the lot and received an offer for $54,000 more than we paid for it last September. We're currently within short-term capital gains, but if we pushed the sale off another 1.5 months, would be beyond the 1 year of ownership. There is another comp that sold for $85,000 more than we paid for ours that's also on our street. We're not in an immediate rush to sell it, so could hold, but also want to be mindful that it's still a relatively nice return on the initial investment of $68,000 with down payment and closing costs.
I'd appreciate any guidance you may have regarding holding on to land to appreciate in the long-term (not making any more of it) despite the carrying costs of taxes/interest paid on mortgage, versus selling it and making a profit. I don't envision that we could buy this piece of land for what we paid for it in the future, but again, there's the risk of holding on to a non-income producing property for quite some time before we build. It's uncertain when we would build the home, so it could be within several years, or it could be in 10.
I look forward to hearing your thoughts/feedback. Please let me know what other details/information would be helpful.