My wife and I are kicking around the idea of buying a home in about three years, the circumstances may be a bit odd and I wanted to get some opinions. I have been in the military for 10 years and will be making it a career. I have been renting since I joined but I would like to stop throwing that money in the trash every month. I still have a lot of reading and research to do, but my original thoughts were to buy a home in Jacksonville, FL (where we plan on going and where the market is still very much down), live in it for the three years while we are in town and then rent or possibly sell if the market is right when we leave. I am looking at a relatively cheap place which would be covered by my housing allowance and still have about 300-400 dollars left every month to put into a “house emergency fund” to keep around if we did decide to rent it later. My wife and I both have lived in the area where we plan to buy and also have family and friends in the area. We would not consider doing this in any other location than Jville because of our familiarity with the area.
It is near a military base and has a constant influx of renters looking for the 3 bedroom 2 bathroom with a fenced in yard, near a good school that fits into their housing allowance. The primary renters in that area are certainly military, which also is beneficial because all I would have to do is call their squadron if they stopped paying the rent.
I am looking at this as kind of a savings vehicle or really just a way to not throw all of that money away. I understand that owning a rental property is huge risk and a possible huge pain in the neck, but I feel like even if the property doesn’t appreciate or even depreciates a little, it would still be worth it to build equity rather than be paying rent forever. We would have an emergency fund specifically for the house to repair damages. We would most likely rent again on our next set of orders if we left Jacksonville for a few more years (if we rented out the Jville house) until I am retired from the military. At that time we would most certainly sell the rental and buy our first real home.
Here are some of my notes and I figured why not just put them all in the post:
-I would use a VA loan and put down only 5% to lower our VA funding fee significantly, but also not go much more than 5% in order not to drain our emergency fund too much.
-Should be close to Turn Key as possible: Plumbing, Roof, Flooring. However, if its small cosmetics, we should be able to look past those for a possible great deal.
-We should be planning on renting on next set of orders
-We aren’t coming back to that house so don’t go big!, we are using it as a way of not throwing rent away, and a possible equity builder for our “after military home”
-Maintenance and Beautification are important, but resist the need for large expensive projects, this is a savings vehicle, not a long term investment
-Maintaining a six month’s rent “home emergency savings” account is not a want, it’s a need.
-When deciding on a home, ask if we would want to rent it… Is it a good home for the rental market? If not, walk away. We need to rent this out when we leave.
-Stay within budget on the amount we are going to borrow, after all of this hard work, it would be foolish to get carried away and ruin what we have accomplished by making a hasty decision
-Look at it as a savings vehicle, not as a future home
-Run the numbers one more time, two more times, take your time.
Thank you for any inputs, thoughts, or hey bye-the-ways!!