6 Smart Ways to Reinvest Your Cash After Selling an Old House in Virginia Beach

Navigating the housing market in Virginia Beach can often feel like an expedition through a land of hidden treasures.  It’s easy to see why homes here are as valuable as pearls: they are right on the ocean and have really nice neighborhoods. 

But here’s some advice for people who have just sold their homes and looking to sell their old house in Virginia beach: you may be wondering what to do with your money after selling your old Virginia Beach home. 

It’s a valid concern, considering that a substantial windfall, like the one from a property sale, holds the potential to transform not just your immediate future, but your long-term financial landscape as well. 

MONEY BREEDS MONEY, you may heard of this phrase. However, It is important to remember, though, that this progress can only happen through smart investments and not wasteful spending. So, how should one navigate these prosperous crossroads?

After selling your old house in Virginia Beach, it’s wise to reinvest your earnings strategically, considering options like real estate, rental properties, vacation homes, stocks, or retirement funds, to secure long-term financial growth and stability, rather than spending the capital on fleeting or depreciating assets.

We’ll go over all the options for new investments you’ll have after getting rid of your old Virginia Beach.

How Long Before I Reinvest My Money After Selling My Old House?

Selling a home often leaves you with a significant sum, and the decision of when to reinvest this money can be as crucial as where to put it. 

The timeframe for reinvestment can vary greatly depending on your objectives, particularly if they involve tax considerations or personal financial strategies.

1. Aiming to Defer Capital Gains Taxes Then You Need To Reinvest Quickly

You must have a timeline in mind if you plan to reinvest in the property. 

If you plan to purchase a new real estate property after selling an existing one in Virginia Beach, you should be familiar with the concept of a 1031 exchange.

A 1031 exchange, also known as a like-kind exchange or tax-deferred exchange, is a financial strategy used in the United States that allows an investor to sell an investment property and defer paying capital gain taxes on the profit by reinvesting the proceeds from the sale into a similar type of property within specific time limits. 

This process is governed by Section 1031 of the U.S. Internal Revenue Code, hence its name. 

Note: However, 1031 exchange is not applied to a primary residence, you have to keep this in mind.

How Quickly Do I Need To Buy New Property After Selling My Old House, If to Save on Capital Gain Tax?

It’s a strategic move allowing you to defer capital gains taxes when you sell an investment property and reinvest the proceeds in a similar kind of property. However, it’s a process that requires quick action. 

You have a 45-day window starting from the sale date to identify potential replacement properties, and a total of 180 days to seal the deal on the new property. 

It’s a financial strategy that demands speed and precision to save you a substantial amount in capital gain tax on your old house, a 45-day clock starts ticking, during which you must identify potential replacement properties. And the whole process of getting a new home has to be finished in 180 days. 

So, does a 1031 exchange help? 

It can, significantly so, by deferring immediate tax burdens and offering long-term benefits, especially when strategic planning for future generations is involved.

Think of it like hitting the “pause” button on your tax obligations. When you use a 1031 exchange, you’re not avoiding or erasing the taxes on the profit from a property sale; instead, you’re simply deferring them. You won’t have to pay those taxes now, but you will need to pay them in the future if and when you decide to sell the new property.

However, there’s a fascinating caveat to this rule, almost like a secret door on a game board leading to an unexpected reward.

If you hold onto your new property for the remainder of your life, never selling it, your heirs will inherit the property without the tax obligation from the original or any subsequent gains, thanks to something called a “stepped-up basis.” 

This rule adjusts the property’s value for tax purposes to its current market value as of the date of your passing. So, when your heirs decide to sell the property, they would potentially owe taxes only on the gain that occurs after your death, not during your initial investment. 

In this way, a 1031 exchange can not only defer taxes but can also position your next of kin for a more beneficial financial situation.

2. Take Your Time In Identifying The Right Investment Strategy

When you do not have to worry about tax deferments while buying property, on the other hand, the question of “when” becomes less important. 

Legally speaking, there is no timer going off. Instead, it is about keeping a close eye on your financial goals, listening to the whispers of the market where you choose to invest, and planning your investments with the care of a master artist. 

Do not forget that smart investment chances are like buses: they keep coming! But the real skill is knowing when and which bus to get on.

How and Where To Reinvest Your Money After Selling Your Old House In Virginia Beach

You’ve just struck a deal on your old house in Virginia Beach, and now you’re holding a ticket to financial diversification. 

But the burning question remains: where should you reinvest that hard-earned money here in Virginia Beach? 

Let’s explore some potential and available choices for you. But remember always conduct your due diligence before investing in any of the following suggestions.

1. Invest In A Real Estate Crowdfunding

Have you ever wished you could own a piece of a trendy hotel on the beach or a famous shop on the boardwalk but were scared off by the huge amount of money that would be needed? With real estate crowdfunding, you might be able to get into these bigger projects without breaking the bank. 

Crowdfunding sites are all over the real estate market in Virginia Beach. These sites let you invest in profitable homes without spending a lot of money but do check and look for the reviews of the operating businesses.

What’s beautiful about crowdfunding is that you don’t have to pour a fortune into a single investment. Instead, you’re joining forces with other investors, combining your smaller sums of money to make a larger impact. 

This approach allows you to spread your money across different properties and projects, reducing the risk that comes with putting all your eggs in one basket.

2. Invest In Local Rental Properties In Virginia Beach

Transitioning from selling a property to becoming a landlord might seem like a big leap, but have you considered the steady stream of income that comes with owning a rental property? 

Especially in a tourist hotspot like Virginia Beach, where every season brings in waves of visitors, investing in a rental property or a vacation home can turn your one-time sale into a gift that keeps on giving.

Why think about rental properties? 

Well, think of it as having a business that’s always in demand. By purchasing small rental properties or vacation homes in Virginia Beach, you’re tapping into a continuous market of vacationers and tenants seeking quality places to stay. 

Whether you list your property on platforms like Airbnb or lease it out long term, you’re setting up a system that can generate a respectable side income. It’s not just about the revenue, though; it’s about the financial stability that comes with it.

Where in Virginia Beach?

Location is key, and Virginia Beach is a treasure trove of neighborhoods that promise growth. 

But where exactly should you be looking? 

There are areas which include Aragona Village, Arrowhead, Windsor Woods, Kings Grant, Glenwood, Salem, Kempsville, Chinmey Hill within our city that are on the rise and provided you with investment opportunities.

Identifying these up-and-coming neighborhoods is crucial, as they can offer a perfect blend of affordable investment opportunities and high future returns. Keep an eye on market trends, engage with local real estate experts, and immerse yourself in community discussions to pinpoint where your next investment hub should be.

3. Invest In REITs Mutual Funds

After the successful sale of your old damaged house, you’re now standing at a crossroads of investment opportunities. If diving into the hands-on world of physical real estate doesn’t quite resonate with you, there’s an alternative path: REITs Mutual Funds. 

But what are they, and how do they fit into the picture for someone looking to reinvest in the real estate market without getting their hands dirty with the intricacies of property management?

Let’s introduce Real Estate Investment Trusts, or REITs first. These are companies that own, operate, or finance income-producing real estate across a range of property sectors. 

The twist here is that REITs are typically a playground for institutional investors—think big financial institutions, not individual investors—due to their complex nature.

They don’t allow direct investment for individual in them but as an individual, you can invest in their portfolios of real estate assets the same way they invest in other industries – through the purchase of individual company stock or through a mutual fund or exchange-traded fund (ETF). 

Here’s where REITs mutual funds shine. 

They open the door for individual investors to step into the real estate investment game without the need to comprehend the intricacies of REITs fully. 

How so? 

By pooling resources with other investors, you’re able to invest in these trusts through a mutual fund, which spreads out the investment (and, consequently, the risk) across multiple REITs. This strategy offers a taste of the gains from real estate investing, minus the high-stakes risk and the need to understand every detailed nuance.

4. Venturing into the Stock Market

Your journey doesn’t have to end now that the real estate chapter has reached a great milestone. The stock market is a dynamic world outside of real estate that offers a wide range of chances for people who like to take risks. 

Before you jump, though, it’s important to know what you’re getting into.

Entering the stock market is akin to becoming a part-owner of a business. You buy a piece of a company, and your fortunes rise and fall with theirs. Sounds thrilling? Absolutely, but it’s not without its risks. 

Stocks can offer substantial rewards, which is why they catch the investor’s eye, but they’re not averse to the whims of market volatility. High returns are enticing, but they come hand-in-hand with high risks.

If the market’s ups and downs give you pause, or if you’re not yet well-versed in the intricacies of stock investments, there’s no need to back away. ETFs (Exchange-Traded Funds) and mutual funds act as buffers, allowing you to invest in a basket of stocks. You’re not putting all your eggs in one basket; instead, you’re spreading them out, minimizing potential risks while still enjoying the fruits of market participation.

5. Prioritizing Debt Elimination

Stepping into a fresh financial phase after selling your old house doesn’t always mean diving into new investments. Sometimes, the smartest move can be looking inward at your existing portfolio, particularly focusing on any debts clouding your other properties. 

Why? 

Because securing what you already own can be just as impactful as acquiring new assets.

Paying off debt might not seem as glamorous as investing in a buzzing stock portfolio or purchasing a shiny new rental property, but could there be a hidden charm in it? 

Absolutely. 

By allocating part of your sale proceeds to settle outstanding debts on your other properties, you’re safeguarding those assets from risks like foreclosure, state tax liens, or other financial encumbrances. 

Think of it not as an expenditure, but as an investment in peace of mind.

Remember Secure Foundations Lead to Higher Grounds

Imagine the stability that comes with debt-free property ownership. Not only do you rid yourself of the constant worry of dues and deadlines, but you’re also freeing up future income. 

The money that would go toward settling monthly debt payments? 

That’s now available for reinvestment or, better yet, for bolstering your savings. Essentially, you’re building a more secure financial foundation for your future endeavors.

6. Considering a Safer Avenue: Savings Accounts

In the whirlwind of high-stakes investment opportunities, it’s easy to overlook the humble savings account, a classic instrument that offers you a secure, though less lucrative, way to grow your funds. 

Yes, the returns are low — with the average savings account in the US offering around 0.45% APY — but there’s a noteworthy trade-off: the safety and security of your capital.

However, not all savings accounts are created equal. If you’re accustomed to the traditional variety, you might be pleasantly surprised by their high-yield counterparts. Transitioning to a high-yield savings account could be a game-changer, helping your money grow at a pace that’s more noticeable than the typical savings setup.

Brick-and-mortar institutions have their perks, but when it comes to savings interest rates, online banks often have the upper hand. They tend to offer more competitive rates that can make a significant difference in your account’s growth over time.

However, whether you’re looking at traditional or high-yield savings accounts, keep in mind that interest rates aren’t set in stone. They fluctuate, swayed by economic winds, and it’s vital to stay informed about these variations.

Final Thoughts

After selling an old property, it can be hard to figure out what to do next for many. The influx of capital from selling your old house is undoubtedly a cause for excitement, but it’s also a summons to responsibility. 

Conducting due diligence becomes your compass, guiding you through diverse investment avenues. Understanding the market and investment opportunities in and outside Virginia Beach, acknowledging your risk appetite, and recognizing your financial aspirations are crucial steps in this journey.

Whether you’re drawn to the thrill of real estate crowdfunding, the steady income from rental properties, the dynamic world of REITs and stock portfolios, or the security of debt elimination, each path has unique rewards and challenges. 

The key lies in aligning your choice with your long-term goals, financial health, and personal peace of mind.

But what if you’re still at the starting line, contemplating whether to sell a property you’ve inherited or a home you’re ready to leave behind? 

HR Property Doctor is Here!

Deciding to sell a property is never an easy decision and it can be lengthy process, but HR Property Doctor can ease this transition. Our expertise lies in Fast and Quick Cash Home Buying in Virginia Beach and other neighboring cities, offering you the liquidity you need without the typical hassles of traditional property sales. 

Whether you’ve inherited an old house or are looking to change your scenery, we’re here to expedite the process of selling an old house in Virginia Beach, putting you in the perfect position to reinvest, recreate, and rejuvenate.

Your property’s value could be the springboard to your next great investment. Let HR Property Doctor help you unlock these opportunities with speed, ease, and professionalism. Contact us today, and take the leap towards your financial future with confidence!