Where to invest?

[LDB]

I'm selling a rent house. I'm spec'ing on what to do with the proceeds. I want somewhere to put it that will pay me monthly like when the rent was being paid but without the mountainous property taxes, liability insurance and HOA fees to deduct obviously. For easy arithmetic call it $240k paying $1k a month for 20 years. There might possibly be some growth so it lasts longer but easy arithmetic. I don't want something that might lose a lot of value, much at all really. An annuity is a thought although they aren't always highly rated due to fees etc. So, any thoughts on the best means to accomplish this?

 

[Pablo]

I'm selling a rent house. I'm spec'ing on what to do with the proceeds. I want somewhere to put it that will pay me monthly like when the rent was being paid but without the mountainous property taxes, liability insurance and HOA fees to deduct obviously. For easy arithmetic call it $240k paying $1k a month for 20 years. There should be some growth so it lasts longer but easy arithmetic. I don't want something that might lose a lot of value, much at all really. An annuity is a thought although they aren't always highly rated due to fees etc. So, any thoughts on the best means to accomplish this?

5% just, easy, pretty safe. $12,000 year. Done. Bank CD. Even a current money market.

But throwing growth in and no risk? Nothing easy about that.

 

[oil pan 4]

CD rates are pretty good last time I checked, that will give you around a year to decide.
I would buy gold, silver or platinum when the price is down.

 

[demarpaint]

5% just, easy, pretty safe. $12,000 year. Done. Bank CD. Even a current money market.

But throwing growth in and no risk? Nothing easy about that.

+1 T-Bills are nice too, and no state income tax on them here.

 

[LDB]

I could just put it in my bank savings account, the easy way out, but that only pays nothing effectively. I don't expect it to make much but hoping for a bit more then 0.02% or whatever the bank is paying. And I could go with something that I withdraw from but was hoping for something automatically sends $1k to my checking account on the blankteenth of every month.

 

[Ed_Flecko]

1.) You're a little late (but not too late to start), have you considered doing a 1031 Exchange (https://tinyurl.com/5at3xbve) into a different "income producing" property that might offer you the cash flow you desire?

2.) Do you own the property outright? If so, have you considered a "seller carry" transaction where YOU are the lender? Bankrate says the current mortgage rates are 7.32%. (https://www.bankrate.com/mortgages/30-year-mortgage-rates/) If YOU are offering the financing, you can easily get slightly higher than prevailing rates by acting as the seller and then the lender. If you offer slightly LOWER than prevailing rates, you dramatically increase the "sellability" of the property. There are many options available to you if you have the ability to offer this option.

Ed

 

[LDB]

I'm tired of the "opportunities" that go with owning a rental property, especially the HOA nazis so not interested in getting another. When I inherited this house it was on a sell by owner that was great for a year or so until the guy just stopped paying. Not interested in that either.

I appreciate the suggestions as I know those could be good ideas but I'm old enough I just want a good place to park it that will reliably send me money every month and when I'm gone will send the balance to my estate.

 

[xmanjeff]

there are a good handful of savings accounts out there that are at or above 5% if you look , but if I were in your shoes , I would be investing it into something above that

 

[atikovi]

I could just put it in my bank savings account, the easy way out, but that only pays nothing effectively. I don't expect it to make much but hoping for a bit more then 0.02% or whatever the bank is paying. And I could go with something that I withdraw from but was hoping for something automatically sends $1k to my checking account on the blankteenth of every month.

WTH? Dump that bank like yesterday. Half dozen of my savings accounts pay over 5%. $2500 a month just for having your money in the bank. Sweet!

 

[JeffKeryk]

You need to consider income tax implications. Interest is income and taxable.
I would talke to a Schwab rep to see what options you have in Texas.

For example, in CA we have high state income tax. So I have a double tax free (Fed and state) CA muni bond fund. Since interest rates are up, bonds are performing better.

 

[Barkleymut]

Discover Bank is paying 4.25% right now, can transfer money anytime you want to/from your checking account. Muni bonds are another avenue. If you are under 50 and don't mind a little risk put it in 24 different income producing stocks.

 

[JavierH19]

It's real tempting to just spread your money into the top 5-10 of all the major indexes considering how reliable and rather safe they are as long term investments. Now short term sure they'll have a bad day here and there but the top 10 typically stay there for a long time and for good reason. Though i wouldn't do that immediately as the market is in an alarming and unarguable bubble that's cracking. I'd wait at least a half a year before dumping money into them. In the mean time a 6 month CD would be a good option as some pay over 5% https://www.bankrate.com/banking/cds/best-6-month-cd-rates/

 

[JavierH19]

Discover Bank is paying 4.25% right now, can transfer money anytime you want to/from your checking account. Muni bonds are another avenue. If you are under 50 and don't mind a little risk put it in 24 different income producing stocks.

Capital one has been paying me 4.3 for over a week by now. Considering discover has no brick and mortar locations i believe they should always be at least .15% above capital one at all times.

 

[IveBeenRued]

Do you need the monthly income or are you good with a lump sum growth a year or so down the road?

 

[ArrestMeRedZ]

I like pipeline stocks. Since petrochemical anything is out of favor with the ESG fairies, some are relatively cheap and pay good distributions (or "return of capital" in the case of partnerships).
Returns are about 7-10% currently. Some well run pipeline companies are able to consistently increase dividends, offsetting the effect of inflation.
Very few annuities have any sort of inflation protection, which is one reason I won't touch them.
I got lucky. Went into a pipeline stock during C19 lows. Only took $60k to get that $1000/month return. Was planing on holding it forever but had it in the wrong account (Roth IRA), and that particular stock looked like it would be adversely effected by cost of borrowing going forward. Took my capital gains and ran.

 

[Pablo]

You need to consider income tax implications. Interest is income and taxable.
I would talke to a Schwab rep to see what options you have in Texas.

For example, in CA we have high state income tax. So I have a double tax free (Fed and state) CA muni bond fund. Since interest rates are up, bonds are performing better.

Mostly good advice, and any bond fund can be enticing, even muni funds if his tax situation warrants municipal bonds.

The downside with bond funds?

They all get a nice hair cut when rates go up. Now if we think rates won't go up more, then excellent.

 

[Hillbilly Deluxe]

There's a ton of new'ish investment opportunities where you invest $1k, $5k, whatever into a 'crowd-sourcing' type group, they more or less guarantee a return. Most of the guaranteed returns are in the 6-8% range, some others (not guaranteed) are in the 12-14% prospective range.

 

[rekit]

JP Morgan Chase 5.35% 9 month cd, callable after 6 months. I usually get non-callables but I 'll take 5.35 for at least 6 months. Have a 5.2 Treasury coming due soon, have to find something then too. Retired and sleeping well haha.

 

[atikovi]

There's a ton of new'ish investment opportunities where you invest $1k, $5k, whatever into a 'crowd-sourcing' type group, they more or less guarantee a return. Most of the guaranteed returns are in the 6-8% range, some others (not guaranteed) are in the 12-14% prospective range.

I'd be highly suspicious of that if not an outright scam.

 

[pbm]

Is 'money in the bank' as safe as it used to be? Remember Silicon Valley Bank?....apparently there are others just like it.