It seems like lots of people buy a house while they're active duty. I also understand that you could very easily be transferred far away from your home, in which case you have to rent, sell, or somehow continue to make the payments. I'd rather get started on a 30 year mortgage sooner rather than later, but it seems like a very risky/troublesome venture. I'd love to hear anyone's two cents on this.

The first thing you need to consider is where you're stationed right now. Is it an economically depressed city? Are you within driving distance of a desireable area? Is this a place you'd consider as a retirement location?

Home prices are at historic lows in many parts of the country, so you can get into a place for much less than even 4 years ago. You could conceivably hold on to a home and rent it to another Coastie, or even lease it to the CG.

quote:

Originally posted by magic8ball:
The first thing you need to consider is where you're stationed right now. Is it an economically depressed city? Are you within driving distance of a desireable area? Is this a place you'd consider as a retirement location?

Home prices are at historic lows in many parts of the country, so you can get into a place for much less than even 4 years ago. You could conceivably hold on to a home and rent it to another Coastie, or even lease it to the CG.

Bingo! I'm stationed in Miami and thank god I didn't buy down here. It's horrible for sellers right now especially if you bought a few years ago. I'm getting transferred to Jax and we bought a home up there. The house prices up there are so cheap that I will be able to rent it when I leave. As the person said ^^^ it all depends where your stationed at but look at it this way , if you play it right and buy a home every 4 years just imagine when you retire and you have all those properties at least that's my goal.

quote:

it all depends where your stationed at but look at it this way , if you play it right and buy a home every 4 years just imagine when you retire and you have all those properties at least that's my goal.

Certainly a great thought and goal. But think of this as you proceed. I grew up in and around rentals and still dabble in them occasionally. It is awesome to say "I own X rentals." However, if you are paying a mortgage on all of them and don't own them outright, make sure you have enough money to cover you if your rentals are vacated. Think worst case. Nobody renews their lease and you have X amount of homes vacant. Do you have enough money to cover all the mortgages? What about even having to pay one Mortgage? How long before you run out of money?

I have seen it happen to family and friends multiple times. A sudden change in the market can do a lot to the rental market and to your pocket book.

quote:

Originally posted by tankkllr:

quote:

it all depends where your stationed at but look at it this way , if you play it right and buy a home every 4 years just imagine when you retire and you have all those properties at least that's my goal.

Certainly a great thought and goal. But think of this as you proceed. I grew up in and around rentals and still dabble in them occasionally. It is awesome to say "I own X rentals." However, if you are paying a mortgage on all of them and don't own them outright, make sure you have enough money to cover you if your rentals are vacated. Think worst case. Nobody renews their lease and you have X amount of homes vacant. Do you have enough money to cover all the mortgages? What about even having to pay one Mortgage? How long before you run out of money?

I have seen it happen to family and friends multiple times. A sudden change in the market can do a lot to the rental market and to your pocket book.

Definitely true but that is just common sense to always have saved funds for the worst. I'm just starting out and by no means am I an expert but hey you have to start somewhere and I think a good time is now. I do appreciate your comments, I was reading the other thread you replied in. My main focus will be to try and look into fixer uppers to start out and go from there.

I was really just concerned about hanging onto one place that I really liked, for when I got out of the Coast Guard, settled down, and so on. Picking up additional properties as financial ventures sounds intriguing, but probably too risky for me.

With that said, if some people are able to successfully juggle several properties and turn a profit to boot, then I guess it wouldn't be unthinkable for me to rent-out one place, my "home", while not living in it.

Also, I figure it's worth the extra hassle regardless of fluctuations in the market if it's a place that I want to live in for the long run, and not just sell when the price is right.

It used to be profitable and you basically lived in your house for free... In todays market, I'd be very careful.....

Renters can be wonderful, and renters can be trash. I've had both. Be careful.... if you can rent to a military member you have an advantage.. you can always contact his command .. or higher.

Be sure you have a good lease...


Wray...

We think it is worth it. I know that it is not for everyone. Just think, you get BAH for rent...why put that towards someone else's mortgage...why not have your own?

There are risks, but they are worth taking. With the interest rates being in the mid 6's, it is still affordable to buy a house. If you wait until next year, they are projected to be in the 8% range. Buy low, sell high.

We have bought and sold 2 homes in 4 yrs. Yesterday we bought house 3. This was the best deal so far, and I think the risk is not only going to be enjoyable..but affordable

Whatever you do, study the market and the area before you do buy. Good luck!

Hard question..from what i heard on the news today fanny and freddy the ones that insure 50% of the homes today are in serious trouble..if either or both go bankrupt ..you will find it next to impossible to buy a home..so maybe the answer is buy now..and hope to rent it out while you can still get a decent interest rate..then again i am no gambler..you could be stuck like alot of 2nd home owners trying to find a renter.

before someone asks ..yes i got link.

www.newsweek.com/id/145741

good luck.

Another maybe better link..

www.msnbc.msn.com/id/25641442

confusing is,nt it ?

Also with that being said, rates are looking to rise gradually to 8% sometime at the end of the year....

One thing I would be very careful about are those ARM's..... WHen they "adjust" it is usually upward, and this is what has caused several to default on their mortgage...

If at all possible, get a 15 year fixed... the payments aren't much more than the 30 year fixed....


Wray...

Yes, stay away from ARM's. If 15 years is a little tight for you, try a 20 year mortgage too. Like Wray indicated, the difference is not much on a monthly payment but on the long run, it is a huge amount of $$$$ that you save w/ a 15 or 20 year mortgage.

quote:

Originally posted by kekojones123:
Yes, stay away from ARM's. If 15 years is a little tight for you, try a 20 year mortgage too. Like Wray indicated, the difference is not much on a monthly payment but on the long run, it is a huge amount of $$$$ that you save w/ a 15 or 20 year mortgage.

You could do that or like what I'm planning to do is just pay extra or automatic debit. You can still cut down on your mortgage with either choice.

I would only recommend getting into a 15y or 20y mortgage if you plan to keep the house. For a 15y the payments are around 200-300 more a month(depending on the amt borrowed), but you are paying principal faster and less interet through the years. Just remember too, that if you are paying less interest, you will have less to claim for the tax write off.
Or you could get a reg. 30y loan, fixed and put your tax money you get back every year towards prinicipal. That way you are in control of how much you pay towards principal and you can still pay off a 30y loan in half the time.

Either way, buy a home now while you still can. Depending on what the banks are going to do, interest rates are planning to take a leap up and the lending rules are going to be harsh.

An ARM is not always bad. If you are in it for long term, it is absolutetly not a good thing. However, if you are planning a quick turn around of your house(under 5 years) an ARM does have some advantages. You can usually get less of an interest rate with less points applied to get a lower rate. Additionally, if you happen to be in a high market like it was 15+ years ago, you may have an opportunity to actually get a lower rate. That is a pretty bit gamble though especially when you have the ability to refinance.

So for a short term investment it may be more advantageous to go with an ARM but look carefully before you do it.

I've known people that have bought a house in each transfer and kept them all. A friend of mine had about 9 houses. He would pay a local person (usually a Coastie) to be the local landlord. Most were affordable homes when he bought them. Several were almost paid off. This is form of retirement plan. Sure you have to deal with a few months of vacancy here and there and fixing the house back up after someone moves out but, if he got all 9 houses paid off by someone else with little expense to him that is a nice little bank account if he sold all after he retired.

Just a thought.

hmmmm ... interesting.