There are many great ways you can reinvest the proceeds from the sale of your San Antonio house. In our latest post, we explore some options of how you can reinvest the cash to start making it work for you!
There are hundreds of reasons why people sell their houses. Sometimes it is because the cash is needed right away, and sometimes they find themselves with an unexpected surplus available to use elsewhere. There is nothing wrong with a little splurge on something nice but instead of spending all this money on material objects and things that come and go, why not reinvest your earnings into something that will benefit you down the road?
Below we will discuss some of our favorite ways to reinvest the proceeds from the sale of a San Antonio house! Could one or some of these be a great choice for you?
College Savings Plan
There is no greater investment than that in the future of a child. By contributing to a 529 plan or other designated college fund, you’re not only contributing to a child’s future, but you are also teaching them a good financial lesson. The money placed in a 529 plan will grow tax-free, and will not be taxed when the money is withdrawn.
College is more expensive than ever and many families utilize these types of savings plans for their children ahead of time, so they are not blindsided by huge bills when their children begin college.
A Rental Property
When selling one home, it can be a great idea to reinvest in another. Not only can you avoid capital gains taxes this way, but you will also be able to find a rental property that really performs well and can generate a substantial profit for you. If one home or investment property isn’t working, maybe it’s time to try something different!
Just because you have a home, doesn’t make it a good rental property. Search out what makes a good rental property in your area and that way you can reinvest your proceeds in the best type of income-producing property. When you find the right rental property in San Antonio, you’ll be able to generate some passive income while building on the proceeds you have received.
Boost Your Retirement
Do you have enough saved for your retirement? Do you wish that you had put more away sooner? Now can be just the time to reinvest those proceeds to help you in retirement. Many types of retirement accounts have limits of how much you can invest in a certain year and the longer you wait, the further you will get behind.
Improve Your Home
If you sell a property you inherited or an underperforming rental, you can use the funds to improve your primary residence. Building equity in your home as well as adding features you will personally enjoy is never a bad thing.
Whether you want to improve a dated kitchen or repair an old roof, now is the time to get those things done. While you might be faced with some taxes when you choose to spend the money on improvements, you will be able to take a deduction for your home improvement costs.
Pay Off Other Debts
Do you have other debts weighing you down? Now is the time to clear them up once and for all. If you have debts weighing you down with high-interest payments, paying money to borrow money doesn’t usually make sense. Can you pay off a vehicle, medical debt, or other financial issues?
There is good debt and bad debt. While carrying a mortgage can actually help in some financial situations, having a high-interest loan or extra credit card does not.
Crowdfunding Real Estate Projects
A great way to reinvest the profits made from your San Antonio area house, is to put the money into a real estate crowdfunding opportunity. Real estate crowdfunding allows you to continue to invest in real estate but in a much more passive approach. You’ll want to research any investment before sinking your money into it, but investing in a real estate crowdfunding opportunity can be a passive and hands-off investment that can really pay off.
Don’t Forget About The Taxman
Before you go and spend all of your proceeds, don’t forget about the looming tax man. Sometimes the proceeds from the sale of a house can be taxed and sometimes they cannot. When you reinvest your proceeds into a “like-kind” investment, you can often avoid capital gains taxes. When you invest in certain things, you can balance the tax burden with other tax advantages.
Always be aware of your tax consequences when you reinvest the proceeds from the sale of your home. You should always consult with your financial planner or CPA before making any big financial moves.
Whatever your reason for selling make sure that you take some time to think about the best place for you to reinvest your proceeds.