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Thread: Home buying ... in an area you don't want to stay

  1. Junior Member
    Tamzyn's Avatar
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    #1

    Home buying ... in an area you don't want to stay

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    Do you think this is too risky?

    We have been trying to find positives with moving to Alabama and have discovered that due to the Air War College at Maxwell, there is quite a lucrative rental market. There is a very desired community in the area that we wish to live in. It seems that since there is a constant influx of O4's and above who are stationed in the area for a year at a time (thus PCSing), the rental prices are priced for this segment, leaving them much higher than normal. We have done some calculating (found some houses, figured out monthly payments with a realistic APR, HOA fees, homeowners insurance, and property taxes) and found that the monthly payment per month would end up being around $500 - 600 less a month than renting. It also seems that renting houses out in this community is relatively easy as the rentals go fast, especially around the summer. There are also not a lot of houses for sale, since they also go very quickly!

    Do you guys think that buying here would be too risky?

    Thanks!

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    #2
    I would not do it unless ready to take on a house that would have to be paid for while living in another location. DH and I thought of getting a house at a base we knew we would never stay at. But I was not willing to take have to pay out of pocket for a home I was not living in if we couldn't find renters. That was my biggest worry. Keep that thought in mind while considering. Not that it will for sure happen just imagine if your house sits empty for 6 months. Or is severely damaged from something and you have to pay for that on top of mortgage. Consider some of the worst case scenarios in addition to best case.
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    #3
    Being an absentee landlord is not good. What happens when the family suddenly gets deployed. You have to to scramble to find new tenants.
    You have to figure you are going to lose 1-2 months rent every year when people move out.
    Do you have someone local you trust who you can send to deal with problems?
    Can you afford to pay two mortgages?

    And remember, when you buy a house, you actually will end up paying not only your mortgage each month, but another 25-50% on top of that for insurance, taxes, etc.
    And then income tax on the rent.

    I wouldn't do it. especially if you have to finance all to most of the purchase price.
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    #4
    I would look at your budget really carefully. We also thought our house would be easy to sell but of course everything went wrong during the process ... we ended up having to make 2 mortgage payments for 6 months. I'm really risk-averse so I like to plan for the worst-case scenario so it was ok ... we knew that we could fit two mortgage payments into our budget pretty much indefinitely (although it was obviously not what we wanted).

    Also totally agree with Asher - remember when renting, the rent payment is your maximum expenditure and a mortgage payment is the minimum. I like parts of being a homeowner, but maintenance can get really expensive really fast, so that's another thing to put in your budget, enough funds for emergency repairs along with routine home maintenance. And even if you decide you don't want to be a landlord and can sell the home quickly, you're still going to have to factor in costs associated with the sale (inspections etc. when you're buying, commissions etc. when you're selling), so it may take longer than you want to stay to break even.

    That situation would probably be too risky for me, but again I'm really risk averse, so it might be ok for you!

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