It looks like I can finally afford to buy a home for the first time. My question now is should I?

I know all the financial advantages of buying instead of renting.

But does owning a home and the trouble of routine PCS moves make renting the best bet until I retire?

Jared, ya know, 10-15 years ago I would have said, without question... BUY....

In todays market, which is a buyers market, it depends... on several things..

As you know.. location, location, location...

how long you have in, how long you intend on staying in.

financial stability... can you afford to make payment if you get transferred and can't get it sold/rented for 6 month?

how long will you be at your new unit? got in for schools? will you get advanced and transfer early?

These are just a few things for you to think about.. I got my first house when I was a SN.. Stayed at the same unit until I was a BM1. Several told me not to advance 'cause I would get transferred.. I took the chance and won.

Think about these things... hard.

Wray..

JC, Wray is giving you many good tips to consider...and you should do that. Buying a home is probably the most significant and expensive investment many of us will ever make. W/o a doubt, the best one I ever made. My only regret was waiting until I came out of OCS to buy one. However, having at the time 10 years left before retirement, I had to make some difficult decision related to PCS (commuting and even a 3 year geo-bachelor tour). No regret now and even on today's market I would still triplicate (few years ago 5x) my initial investment (16 years later). So, make sure you have a plan "B" in case you have to sell when PCS.

wray is 100% right:

but from a spouse's perspective:
we bought this time= knowing the market was iffy-
we bought in an area we are going to retire in.

we bought with DH's retirement 6 yrs away ( he has a 4 yr billet here) and it is slim he will get short toured this time ( e7-E8)

we bought with the full understanding that if he could not get one of the bases close by for his twilight tour that he would A) do another sand box tour or b) he would geo.

our children are grown and have both moved out-

it was the best decision for us.

now the professional perspective ( RE AGENT 2 b)
NOW is the time to buy if you are going to be somewhere for 3-4 yrs-
the market will begin to turn in 12-18 months- in 24-32 months the market saturation will lessen and in 36-42 months the market will fully rebound.

if you are in a large base area and new construction in low or non- exsitant then BUY!!!

a fwe other hints: buy a fixer- one that you can get rock bottom, add hard woods, granite and stainless and Paint you will even in this market add big dollars to your sale price.

buy something CLOSE to the base- these houses tend to resale quickly- alot of single income families like the closeness of that base gate-

buy at least 4-5 bedrooms- in some markets these are hard to find- and people like the extra room.

HTH's

here is an awesome website that has been my fave for over a yr-

www.trulia.com
and GL!!!

quote:

buy at least 4-5 bedrooms- in some markets these are hard to find- and people like the extra room.

Great Advice..(NOT)You might even want more than that "Think Ed McMahon" or here is another ideal buy a 3 bedroom 2 bath..

The smaller the home ,the cheaper it is to heat and cool and reroof and refloor and etc etc..everything is figured in square footage when comes to repairs..buy what you want and need..not something to impress someone else.

that way if it does,nt sell at least you have the home you can afford.

My situation was little different..i was,nt planning on reSaleing this is the xo's dream home we bought Built what we could afford and what we wanted almost..we wanted a screen porch ..we have one now..but we did,nt finance it though the bank..we waited to pay for it.

its a 3b split 2 on one side the master on the other with a bath in the bedroom..and a carport yes carport..i grew up with a carport..i like them always figured garages were for northern'ers here in florida all you really need is to keep your wheels outta the sun and rain. no garage doors to mess up..works for me.

sc

This message has been edited. Last edited by: spacecowboy1,

Jclem,

It all depends on where you're going to buy and how long you plan to hold your property. Most people buy a house to hold for a very long time, but with military transfers being what they are you may not have that luxury. At a minimum I recommend a 5 to 7 year window of "hold time" before you consider selling regardless of who you are, military or not.

In terms of timing your purchase, don't try to time the market or try to guess where the market "bottom" will be. No one knows the answer to that, not even Realtors, and if they did they'd be running their business from their yacht. What goes up also goes down, then up again, then down again! A long hold time helps even out the ups and downs in the market.

Your timing instead should be a purchase at transfer time. Look to transfer to an area with enough Coastie jobs that may allow you to stay in the area for two tours. Two areas that come to mind are the Bay area out west and the Norfolk area in the east, the latter being much more affordable.

Finally, don't over extend yourself. Buy only what you can afford today, with today's income, and in the future, as you move up the ranks, you will find your mortgage payment to be very easy on the wallet. If you don't like what you see in your "today's income" price range, rent for a while until your income catches up.

Buy if you can then rent it if you need to. Todays market is an excellent chance to start making a smart investment. If you play your cards right and are able to afford it BUY....

quote:

Originally posted by YN2w00tw00t:
Buy if you can then rent it if you need to. Todays market is an excellent chance to start making a smart investment. If you play your cards right and are able to afford it BUY....

....key words in this smart & afford. Don't forget, there are MANY reason why you could be given a set of orders the day after you close on the house.

quote:

Originally posted by Mightyz90_93:

quote:

Originally posted by YN2w00tw00t:
Buy if you can then rent it if you need to. Todays market is an excellent chance to start making a smart investment. If you play your cards right and are able to afford it BUY....

....key words in this smart & afford. Don't forget, there are MANY reason why you could be given a set of orders the day after you close on the house.

Part of being Semper Paratus and another good reason to rent it out...

I love this question because there are so many opinions and so many right answers.

In five days I will have been in the military for 20 years. I have lived in 7 permanent duty locations and have owned homes at 4 of those locations including the one I am in now, none longer than four years, most less than 3. So you can see I have just about a 50/50 split in time of ownership and rental. It has worked out for me both ways but may not for others. I have made money on every home I have lived in and sold no matter what the market was. I have made ****loads (technical term) of cash both renting and owning. It all depends on what you are comfortable with doing as far as investments go, and how much you investigate the market before jumping in.

As others have said, the current market is great for buying a house, but selling may be an issue even in a couple of years. My crystal ball is on the blink so I don't know what it will do.

The financial advantages of buying a home are negligible if you are smart when you rent. Just like the housing market, if you have a bunch of money burning a hole in your pocket it is a perfect time to rent and invest in the stock market and hold it for the long haul.

Here are some things that people forget when they talk about the advantages of owning a home:

"You are investing in your own home and building equity not paying someone elses mortgage." Actually, unless you pay cash, or pay a huge down payment you aren't building much equity. You are paying off your interest for the first few years. Plus, you had to pay thousands of dollars in closing costs to get to do that. Where if you rented, you may have been paying someone else's mortgage but you were probably paying less than owning, you didn't have to pay for upkeep of the house, you paid a small deposit that you will get back, you won't have to worry about selling or renting out the house when you moved, and you don't have to pay a real estate agent to sell your house.

"You get all sorts of tax breaks when you buy a house." Unless you buy a really huge house, you don't get that much of a break. And if you are getting a huge tax break, it means you are spending a lot of money on a house which you could use to invest in other areas that could be tax deferred or tax free.

In the market I am in now, I wanted to rent and did for a year because the market was right. If I had bought when I arrived I would have lost about $75,000 in one year. As it turned out I then found a house that needed to be fixed up during a downturn in the market, bought it for a song, did the repair work myself and plan to make money whether I sell in a year or ten (crystal ball still inop).


Confused more than you were before? I hope not. Do you put that money you have saved into a down payment on a house hoping the market increases or do you rent and invest it into stocks hoping that market increases or do you just keep it in the bank? The only one that knows what choice will let you sleep at night is you. Buy when you think you are ready to buy and comfortable with making the purchase, not just because you think that is what you should do. Study the market a little, don't fall into the hype that owning a house is the only way to make money. It is a great way but not the only way.

Only you can decide what is best for you in your situation. Good luck.

buy...

I bought in 2005...I have since transfered. I STILL own and I will be moving again in the summer (2009). If I had to go back an do it again I would not have bought; however, I am glad that I did.

I don't know you financial state, nor do I care...but, keep in mind you are responsible for the house note when you transfer.

quote:

Where if you rented, you may have been paying someone else's mortgage but you were probably paying less than owning

This is one of those statements that tend to chap my arse and I find normally to be quite ignorant. Renting house A is almost ALWAYS considerably more expensive than owning house A both short term and long term. As a rentor, you are almost ALWAYS paying someones mortgage (principal and interest and PMI), their insurance (and your own), their taxes, their upkeep and at least a little bit extra that they call profit (the entire reason for the rental market existing). (If you are not, you got lucky and found an ignorant or unlucky landlord!) INVESTMENT home owners rarely loose money long term. After all of that, you get (in most states) ZERO credit/advantage at tax time. You also ALWAYS, 100% of the time, leave with ZERO cash money in your pocket. The 'illusion' of renting being 'cheaper' is the simple fact that the buyer normally chooses to buy and occupy a residence of a higher quality than they would rent. Why? Becuase the can AFFORD too!

Buy! Buy! Buy!!

Then later.....

Sell for higher! Sell for higher! Sell for higher!!

Specially in the current buyers economy.

Questions dear poster:

1. Where are you wanting to buy?
2. When do you transfer?


You can't get ahead without taking some risks. Just make sure you make a wise/educated decision.

You dont win playing the board game Monopoly unless you buy, buy, buy, until it hurts. I've never lost. Ever.
Dont buy utilities or the Railroads...

Buy the hell outta every piece of realestate you like and can swing, and do it early in life, finance it all for 15 years at a fixed rated. What your not living in, rent and have a property management company collect the rent. The cost for this service varies but usually around 10%. Nothing. It will pay for itself while gaining equity while in the meantime, making you comfortably wealthy.
This is my simple advice from a simple man.

Good Luck

Chapwood