Should I get into a house first?

Question

Well I'm reading as much as I can, but I won't be able to invest until early September at earliest due to me moving around so much in the military (training for the next 8 months). I just came back from Japan in August and since then I've been living in a hotel. I had a house in Japan, but really it was a matter of just talking to a housing place and getting set up. Due to the language barrier, they basically do everything for you with other services. I was renting a house. So anyways, that being said I've never owned, or rented a house in the US. I was looking at getting into an apartment after training, but wondering if it would benefit me more to get a house. Other than the convenience, I'm saying it would probably help me go through the process of obtaining a house and financing and such, correct? I figure this would be my "first deal" to basically go through the whole process, but in the end I'll be living in it. I guess my big "fear" is that I've never done any of this, so I really don't know what to expect. What do you all think?

Bill Gulley · Answer

Hi, I was in your boots when I did my first deal, so I can relate! Buying a home and an investment property are like night and day, they both may be on the same date, but half the time you'll be in the dark. Military people don't get into homes for tax deductions, they don't make enough! lol Well, what rank are you, if you were off post in Japan, you're an NCO or an officer. You'll be moving again in three and a half years. Do you have a family? If so, they will follow unless you get a combat tour and they will need to be somewhere. What's great is that your position, alot of conventional financing rules are out the window, if you qualify for a VA loan as mentioned above, if you can make the payments and have a little cash for upkeep and miantenance, your housing allowance can buy you a house. I doubt there will be any layoffs in the military! Now, if you are to ETS, get out in three or so, what's the plan? Are you sure of your future employment or will you need to start a new profession from the beginning? (no, I'm not a recruiter!) It's a thirty year loan, but you can always sell and move on. These are personal questions you need to answer. Now, interest rates are way down and you can get a VA loan. That will pretty much slip you past the door. Your problem will be shipping off and trying to hold a property as a landlord, many do it, but I would not suggest a beginner do that. Housing is usually pretty strong around a military base/post/port so you're better off than some, but who knows what will happen 3 1/2 years from now. I think you would probably do OK, at least break even and maybe get a little appreciation. You might make a fist full of money too. If you rent, you'll get nothing. I'd suggest if you buy, get a good one that does not require any maintenance! Military personnel make out pretty well if they pick a solid home at each place they go, if they can buy, since the housing allowance is a non-taxable income that really helps to buy a home. Unless you are a really handy guy or in the engineers, I wouldn't do a fix and live in it deal. It's very stressful if you have a family and you do have other duties. It also takes money to rehab a house. From the information you have given, that's the best i can do, it's rambling I know, but you have alot of personal questions and goals to address first, when you have a solid plan, many here can help you with that. Thanks For Serving! Stay Safe and God Bless! Bill

Will Barnard · Answer

Ted has presented some excellent questions. The other portion is: Do you have a good lender to go to? Do you have the resources to locate, analize, and make the purchase? Vegas is a very depressed market, making an incredible opportunity for those who recognize it. For you, it is possible to get a VA loan with 0 down and often, you can have the seller pay up to 3% of yoru closing costs. If done before the April deadline (unless extended again) you get the first time homebuyer tax credit. Lots of advantages to buying this year, particularly in Vegas (in my opinion)

Jonathan Gonzalez · Answer

I'll be in the military for at least 3 and a half more years, and more than likely stay in this area the whole time. As far as all the other questions, I really have no idea. 6 month reserves? well if all goes well I plan on saving a good amount of money. So I'm sure I'll have that much at least. I wouldn't get into a house till I get back, in mid August to early September. Just wanted to know if it would be better for me since I want to get into Real Estate investing. I mean, wouldn't it give me good experience as to how the whole process goes? Or would it be completely different if I were investing? thanks

Ted Harris · Answer

Should you buy your first house ... ~ solid employment? (sounds like it) ~ still have 6 months reserves after you close? ~ will military move you around turning home into rental - do you want to be a landlord? potential benefits buying now: ~ historic low interest rates ~ mtg pymnt may end up being less than your rent (taxes, ins and upkeep probably push it over) ~ tax advantages ~ take advantage of depressed prices (especially in Vegas!) good luck and thank you for your service!! :mrgreen: