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Thread: Deciding whether to buy a home

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    #1

    Deciding whether to buy a home

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    Would you buy a home somewhere you know you don't want to live long term or retire knowing you could use it later as an investment? We're living in one of the few places in the country that the market really didn't crash. There is also a HUGE rental market here (we have three sets of friends who PSC'd from here who all are renting their houses out for over their mortgage). We're looking at a popular town nearby the base where rentals get picked up within a week or so. Also Canadian military is making the rental market competitive because their housing allowances are about $1000 higher a month than ours. I'm pretty sure we would plan to rent the house out after we leave for a while and sell down the line after we've paid a decent amount of the mortgage and can make some money.

    We're just starting to look and see what we can afford etc and are talking to VA lender to see if we can even do it. We can't afford a traditional loan up here because the houses are SO expensive. I want to buy and I really don't feel it's a bad move here, but it's also a huge commitment and I don't want to regret it.

    Would you rather buy a house with slight cosmetic issues (cabinets, kitchen counters, outdatedness, carpet etc) for a good deal or a house you don't have to touch?

    We can break our lease if/when DH gets his deployment orders, otherwise we'll at least ride out our lease so we don't have to break it I think. So we're very much in the early research stages and I really don't want to jump into anything. We're also trying to pay off as much stuff as we can so we're financially ready for a home and we're trying to keep our mortgage about 200-300 under our BAH.
  2. Do or do not... There is no try.~ Yoda, Jedi Master
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    #2
    I think it would definitely be something we would consider. In fact, we were kicking ourselves a couple of weeks ago for not buying a home when we lived up there. We would probably be getting the dividend and going back to visit every year.
    I'm not Lynn, but we ARE MSOS Best Friends and MSOS Twins.
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    #3
    Personally, I wouldn't buy a home unless I knew I would be staying there long-term. Renting can work out, but you have to think of all of the contingencies. Ie - What if you can't find a renter? What if a renter destroys the place and you can't afford to fix it back up? Who are you going to have take care of tenants should any issues arise? (ie-water heater breaks, sink leaks, etc.) What are the local rules for landlords? Where I used the live, the landlord had to liven within a certain distance of the rental property or hire a property manager, the house also had to pass certain standards and be inspected every three years (which the landlord/property manager had to be present for). What about insurance coverage? Lately, it seems like landlords can be held liable for many things, including injuries to guests (ie someone slips and falls on the sidewalk that isn't properly salted)

    Also, with a VA loan, they might still have the requirement that any mortgaged property has to be owner occupied as the primary residence. Therefore, you couldn't use it as a rental.

    As for which house I would buy, personally, I would rather get a house I don't have to do anything with. You would be amazed how quickly "cosmetic" issues drain your bank account. I learned that the hard way
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    #4
    my issue is you could not buy with a traditional loan.. if you cannot buy using a traditional 30 year mortage do not buy.

    if your looking at a 3/5/7 year arm RUN RUN RUN RUN far far away from those loans.

    this explains a 5/1 ARM: What is a 5/1 ARM Mortgage? - Financial Web
  5. Pour a little salt, we were never here
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    #5
    We just bought a house this year, that we consider to be our retirement home. We will probably have to move once or twice with the military, and hope not to rent (but we would if we absolutely needed to).

    The house was really nice, pretty new and didn't need work but DH loves to work, so he has like a billion improvements planned anyway . The yard however does need a ton of upkeep and if we leave, we'll have to pay someone to do that.

    It's scary buying a house in the military (well, I probably would have found it scary anyway ) but sometimes it can turn out really well, I think (although it's yet to be seen obviously until retirement we wont fully know how our choice affected us).
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    We bought a home where we are and are planning on staying here for another 9 years or so then moving to a place we would like to live forever. Since we are planning on being here for another 9 years it was worth it to us. We will be selling the house before moving though since I would not want to deal with renting. For us we bought a new home not one that needed repairs. We'll see how we feel after we move again.
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    When in doubt, rent! You could use a VA loan to buy a house that is your primary residence...even if it later becomes a rental, but I love the "what if?" questions posed by HisJuliet. If you decide to buy, I would recommend that you work very hard to build up a big cash cushion, so you're ready when "what if" becomes "what-the-heck." I've worked with landlords who are happy with their decision, but also with quite a few who regret it. However, the number of folks I've known who have gotten in trouble financially as renters is dramatically lower than for those that have taken the home ownership leap!

    Quote Originally Posted by HisJuliet View Post
    Personally, I wouldn't buy a home unless I knew I would be staying there long-term. Renting can work out, but you have to think of all of the contingencies. Ie - What if you can't find a renter? What if a renter destroys the place and you can't afford to fix it back up? Who are you going to have take care of tenants should any issues arise? (ie-water heater breaks, sink leaks, etc.)
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.
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    #8
    Quote Originally Posted by Crystal View Post
    I think it would definitely be something we would consider. In fact, we were kicking ourselves a couple of weeks ago for not buying a home when we lived up there. We would probably be getting the dividend and going back to visit every year.
    Thanks, we're thinking the same. We may eventually use it as a second home in the summers, but that's not any time soon. We really love it here. We're looking at buying in Eagle River.

    Quote Originally Posted by HisJuliet View Post
    Personally, I wouldn't buy a home unless I knew I would be staying there long-term. Renting can work out, but you have to think of all of the contingencies. Ie - What if you can't find a renter? What if a renter destroys the place and you can't afford to fix it back up? Who are you going to have take care of tenants should any issues arise? (ie-water heater breaks, sink leaks, etc.) What are the local rules for landlords? Where I used the live, the landlord had to liven within a certain distance of the rental property or hire a property manager, the house also had to pass certain standards and be inspected every three years (which the landlord/property manager had to be present for). What about insurance coverage? Lately, it seems like landlords can be held liable for many things, including injuries to guests (ie someone slips and falls on the sidewalk that isn't properly salted)

    Also, with a VA loan, they might still have the requirement that any mortgaged property has to be owner occupied as the primary residence. Therefore, you couldn't use it as a rental.

    As for which house I would buy, personally, I would rather get a house I don't have to do anything with. You would be amazed how quickly "cosmetic" issues drain your bank account. I learned that the hard way
    I'm sure we'd get a property management company. I worry about the what ifs too, but we also would never get a mortgage that we couldn't afford within only base pay. And we can afford it without his BAH.

    Quote Originally Posted by gunsgirl View Post
    my issue is you could not buy with a traditional loan.. if you cannot buy using a traditional 30 year mortage do not buy.

    if your looking at a 3/5/7 year arm RUN RUN RUN RUN far far away from those loans.

    this explains a 5/1 ARM: What is a 5/1 ARM Mortgage? - Financial Web
    Oops, I meant we'd have to use the VA loan, not a traditional 20% down. DH has good credit and we can get a 30 year mortgage no issue.

    Quote Originally Posted by USAA_JJ View Post
    When in doubt, rent! You could use a VA loan to buy a house that is your primary residence...even if it later becomes a rental, but I love the "what if?" questions posed by HisJuliet. If you decide to buy, I would recommend that you work very hard to build up a big cash cushion, so you're ready when "what if" becomes "what-the-heck." I've worked with landlords who are happy with their decision, but also with quite a few who regret it. However, the number of folks I've known who have gotten in trouble financially as renters is dramatically lower than for those that have taken the home ownership leap!
    We have about $10,000 set aside for this already. As mentioned we can also afford the mortgage with our debt load and expenses on base pay alone so feel more comfortable that way. We should be able to stash a fair amount away before we leave still too.



    It's a hard decision, especially since we know so many people who've bought here and none of them have had issues since leaving. One person had problem tenants but they just kept their $2000 security deposit for repairs. Normal deposits here are in the $3000 range. We'll see if we can even find a house we like, there's not much available and the good houses get snatched up quick from my understanding.
  9. Do or do not... There is no try.~ Yoda, Jedi Master
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    #9
    Eagle River is where we would have bought too. Good luck, if you decide to go for it!
    I'm not Lynn, but we ARE MSOS Best Friends and MSOS Twins.
  10. verabot89
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    #10
    I would buy the house for a good deal and use it as an income property. Put aside some of your income from the house and do repairs and improvements as you go.
    MrsJennyyy is mah wife



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