1D·

Investment Portfolio vs. Buying Real Estate in 1–2 Years

Hi everyone,

I'd like to hear your thoughts. This is about my investment portfolio.

$VWRL (+0,77 %) : approx. €273,000 (+45%)

$TDIV (+0,43 %) : approx. €117,000 (+20%)

$ALV (+1,38 %) : approx. €29,000 (+65%)

$BTC (+0,16 %) approx. 42k (+10%)

The situation: Over the next one to two years, I’d like to buy a property abroad for €300,000 to €350,000

using only my own funds. This means I’ll have to withdraw a large portion of my portfolio.

My dilemma: If I sell now, I might miss out on further price gains. If I stay invested and there’s a major market correction, the purchase could fall through in the worst-case scenario. I’ll have to pay taxes either way, so it’s really a question of timing.

I’m currently weighing these options:

1. Sell everything I need for the purchase now and park the funds in a money market account or money market ETF

2. Secure only a core holding ($ALV and $TDIV) and let the $VWRL run

3. Sell in stages, for example in three tranches by summer 2027

4. Stay invested with a fixed rule: sell at −15% or as soon as a specific property becomes available

5. Hedge using puts

Of course, I’d love to have the best of both worlds: a secure purchase without giving up too much return. I realize that doesn’t exist. I’m looking for the best compromise.

My questions for you:

• Who has faced the same decision, and how did you handle it?

• Would you do it the same way again today?

• Is there an option I’m overlooking?

Thank you all!

14 Comentarios

Epi@Epi

You’ve already saved up the money for the property.
If you’re not flexible in terms of either the amount or the timeframe, it would probably be wise to invest most of it in a secure account earning 2.5% per year.
You don’t have to withdraw this amount all at once; you can spread it out. One option would be to set up different stop-loss orders (50, 100, 200) on your three assets and sell 1/4 of each when a stop-loss is triggered.

Keep in mind, however, that falling/rising stock markets and real estate prices have a similar underlying cause: liquidity and interest rates, respectively. This means that when stocks fall due to rising interest rates, real estate usually becomes cheaper as well.

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Chris@Multibagger

@Epi Of course, the relationship between interest rates and real estate only holds true if the conditions are the same in both locations. If he has invested the majority of his funds in the U.S. but is buying real estate in Southeast Asia or in a European country that is not part of the eurozone, the situation may be different. Let's take Switzerland as an example.

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Philip@FilFree

@Epi I’m leaning most heavily toward options 3 and 4. In other words, fixed ranges that trigger partial or full sales.

My investment horizon is 1–2 years, but it might take longer—in which case, selling too soon could be disadvantageous, depending on the situation.

I currently see the greatest potential in Bitcoin.

The ETFs have performed incredibly well this year; I doubt that will continue, and I think we’ll see a correction soon.

I’m not really into puts 😅

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Paulchen@Divident_e

Stick with stocks. They offer better returns in the long run. It's a proven fact.

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Philip@FilFree

@Divident_e Thanks, I know that, but that's not what I'm talking about right now ✌🏻

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🏊🏻‍♂️ • 🚴• 🏃‍♂️ Endurance Life@MozartsGeist

If buying real estate is an important life goal for you, then that should be your priority (meaning, don't take risks in pursuit of additional, potential returns). Instead, preserve the wealth you've built up.

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Wealth-Accelerator@Wealth-Accelerator

Maybe a good mix of different aspects of your approaches.
Maybe you could think about which approach you’d feel most comfortable with—and in what proportions—and share it here. Then I can tell you whether I’d weigh it a little higher or lower.

Since you’re asking the question, I’m assuming the answer won’t be either

- “I’m selling everything now”

or

- “I’m keeping 100% until the time comes.”

.

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Philip@FilFree

@Wealth-Accelerator I’m leaning most heavily toward options 3 and 4. In other words, fixed ranges that trigger partial or full sales.

My investment horizon is 1–2 years, but it might take longer—in which case, depending on the situation, selling too soon could actually be counterproductive.

I currently see the greatest potential in Bitcoin.

The ETFs have performed incredibly well this year; I doubt that will continue, and I think we’ll see a correction soon.

I’m not really into puts 😅

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Wealth-Accelerator@Wealth-Accelerator

16H

@FilFree So, my initial assessment would be that I’d definitely pull out 100k as soon as possible and lock it in at a good overnight rate.
Maybe even 150k.
We’re currently at an all-time high, and you can pat yourself on the back and say, “I got lucky with my investment and made a killing.”
But locking in a portion of it now will give you peace of mind.

And then you’ll need to come up with a contingency plan for the rest.

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Chris@1Chrischi1

I’d probably withdraw a large portion of it now and park it somewhere safe.

Robin Hood is currently offering 5% interest,
so I’d definitely park some cash there. It’s the best interest rate you can get right now. (Not an ad)

Otherwise, there are plenty of other options for parking your money.
There are plenty of overnight accounts for new customers offering over 3%.

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NichtRelevant@NichtRelevant

Why are you buying that property abroad? To live in it yourself, or to rent it out? If it's the latter, you might want to consider a mortgage (either in full or in part).

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Philip@FilFree

@NichtRelevant We're going to move abroad and won't be working for the time being, so we'll be financing it with equity.

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NichtRelevant@NichtRelevant

@FilFree That sounds very exciting. But that financing approach actually won’t work, since as a newcomer you naturally have very little creditworthiness at first.

I’d recommend doing thorough research in advance on all real estate topics (specifically the purchase process). Land registries, contracts, closing costs, and real estate transfer taxes vary greatly from region to region around the world. (We noticed this when we bought a property in the Czech Republic—and that’s practically right around the corner from us.)

Perhaps one more quick tip: Banks abroad are sometimes suspicious of large incoming transfers from overseas. Be sure to clarify in advance what documentation and proof of funds’ origin may be required. You don’t want the receiving bank to freeze the incoming funds right away.
Also be careful when converting between currencies. There can sometimes be hefty fees if you simply make a transfer and the conversion of larger amounts is handled according to the standard terms of the participating financial institutions. Under certain circumstances, a transfer via Wise or similar service providers is significantly cheaper and can save you thousands of euros in fees.

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Philip@FilFree

@NichtRelevant Thanks so much for the tips 🚀

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