We have had myriad changes in 2011 as we gear up for early retirement as listed somewhat recently in sshawnn’s Journal. We have sold our house, shacked up with ailing in laws to care for them, and shed many unnecessary items while dismissing our consumer mindset. “The FARM” has been a touchy on and off, love hate subject. Reading (much of which is posted by you!) has recently enlightened me to view things for exactly what they are and not what is supposed or intended by others. I always have thought I had a keen sense for this trait but is has certainly been heightened recently.
Preface: After deliberation, we never intend to live there.
I organized my thoughts concerning the farm and wrote a letter to my wife about it. Here are some appropriate excerpts.
I am not farmer material because of allergies, bugs, heat, cold, ADD tendencies when it comes to ongoing farm maintenance, and long projects etc. Despite what we have idealized from time to time about our activity at our farm, that is the basic truth. What continues to steer me away from it is the money pit it will always be. There are a few aspects that we enjoy there that cant be replaced. When selectively compared to the energy that it take to create them, those aspects are not worth it. Most of the activities that we do enjoy or aspire to enjoy there can easily be replicated in a better environment. There are many more simple and less complicating ways to spend our pre and post retirement.
I now propose we ready the farm for sale.
Some of the big reasons we have sought out, kept and tried to use the farm was a bit of internal brainwashing and peer pressure while trying to accumulate sustainable wealth. The “they don’t make land anymore mentality” prevails. That is true. When considering the hard numbers, it does not seem this purchase benefits us. ** The MAJORITY of what we want(recreation) or need(hard to justify anything we need there) to do in the future can be done on a very small tract, at a public area, or in a already built garage. Whats left is trivial and uneccesarry. In the current environment, putting our mark on the deed for the farm as landowners will not maximize our long term position as to reach financial independence. Thus far, and as foreseeable in the near future it is actually quite the opposite. If we must own property, it should be in a position that will produce a stable and healthy return on investment.
This farm talk has basically turned into another ERE utilization. We have wavered on this enough for me. What I once thought was a good plan for if the shit hits the fan is also a fallacy. I think the need to be compact would be more important. Then, being able to produce one thing well and barter would help. (bake bread etc) WTSHTF is not a viable excuse for keeping 80 acres only 40 of which are tillable for crops. Especially when not living there or having any plans or desire to do so. It is never going to be income producing for us. It will likely take years to appreciate more than the current difference in purchase minus log sale versus appraised value and probable sale price.** The other aspect in all this is 5% on 190000 we are paying to your dad. This is a sizable debt that slow down other progress. The hobbies that we would like to enjoy there will be very slow to materialize and I am not interested in continuing the work cycle to maintain and produce that. Very few of the items on the enjoyable list ***actually would happen at the farm.
Actual time to do these activities that we dream of is absent. Little changes in our time expenditure outlook for the next five years as we both continue full time employment, caring for the children, caring for the in laws, and keeping normal day to day things in working order. Aside from aforementioned financial consideration, time alone should be deterrent enough to warrant selling the farm.
Your comments are always welcome
**Hard numbers on buy/sell
Purchase 275000 with appraised value of 375000 at that time 16 months ago.
The “no more land” mentality is prevalent in this region likely inviting a quick sale.
Appx 190000 owed over 19 years at 5% to FIL.
Likely sales price 375-400k
timber harvest, hay production net appx 35000 in last 16 month period. Next harvest likely 15 years @ est50K pending growth, deterioration and market prices at that time.
Would likely reinvest “profit”from sale in 1031 exchange to avoid capital gains tax. Reinvestment would be in income producing rentals.
***The enjoyable list is a list of activities that we journaled over 100 days ago. I am happy to report these lists have not morphed!