Annapolis - USNA grad buy or rent?

Question

Hello everyone,

I'm currently finishing up my last semester at the Naval Academy in Annapolis, MD and then getting married in early June.  Once I graduate, there's a high chance I will be in the area until sometime in November.

I wanted to reach out to the community for some advice.  Here is a little background on my situation.

I don't think financing would be a huge problem.  I should qualify for the VA loan due to prior military service, and I believe that if my fiancee cosigns, the lender wouldn't be as concerned about lack of income history on my end (which will start after I graduate).

I will be transferring to the Hampton Roads area, where my fiancee already has a house.  I am also fine with a live in rehab and I can handle low key renovations myself (flooring, painting, etc).  I can also rent out extra rooms to friends until I leave.  I would hire a PM for when I move.

My ultimate question is this: should I look into buying a house or just split rent with some friends for 6 months? Obviously renting is easier, but I want to start on my path to financial freedom early.

Thank you in advance!

-Tyler

Tyler Buresh · Answer

Congratulations on your upcoming commissioning! When planning to purchase a home using a VA home loan it is important to keep their minimum property requirements in mind. They can be sticklers when it comes to the repairs required prior to signing off on a loan.

It will also be important to consider your permanent duty station. If you and your fiancée intend to purchase a home there with the VA home loan you do not want to limit your options. It will be better to do the math now rather than realize down the road that you will be unable to afford a suitable home as you used to much of your VA home loan on a place where you lived for six months. This is achievable, but may be difficult based upon the market in Hampton Roads and your destination.

Regardless, there will always be renters in Hampton Roads, and the ability to have friends rent rooms and help pay down your mortgage is incredibly powerful. I would strongly advise against renting because it is the easier option. Make an intentional decision based upon your goals and data. If that means renting for six months, do it! If it means buying a place and renting it out, do it!

In the Navy it is very easy to end up back in Hampton Roads. Good luck and enjoy your last few months in Annapolis!

-Tyler

Zack Papaleonti · Answer

Hi Tyler! Annapolis Area Realtor here. My company Academy Realty is a local Real Estate Brokerage and we are in the process of getting a Property Management division set up. We already do some light management for clients but building a more full service PM team. I can get you in contact with some local lenders if you need, as well. Feel free to send a DM or reach out!

-Zack

Sean Rooks · Answer

If I could start over again, I would House Hack (buy a house in HR and rent out the rooms) as early as I could. But I agree with the above, talk to a lender first (let me know if you need some recommendatinos) to make sure what you want to do, will work.

Sam Lewis · Answer

Congrats on the marriage and graduation. My sister is a West Pointer (don't hate).

Personally I would go for a primary residence purchase where you and your wife can enjoy living in, then eventually move out and either rent rooms or rent the entire property. With a VA loan you are in good hands

Tyler McGill · Answer

Thank you to everyone for replying!

I think I might have caused some confusion in my initial post. I apologize about that and want to clear things up.  I will be assigned to USNA (Annapolis, MD) on temporary orders most likely until November.  My fiancee already has a place we intend to keep as our primary residence (in Hampton Roads).  I do intend to invest in the Hampton Roads area in the future though.

I want to find a place up here (in Annapolis) to buy and hold.  However, with only about 6 months to live in the area, I can take the easy way and just split rent somewhere for six months until I move to Hampton Roads, or I can try to find a place that can cashflow and hopefully build equity. I also don't want to limit myself to just the VA loan, especially considering their strict guidelines with houses that need renovations.  Needless to say, the VA loan is simpler if it applies.  I've done a significant amount of research on the BRRRR method and would be willing to do that if the numbers work.

If anyone knows agents and/or property managers in Annapolis that are used to dealing with investors, I would love to reach out to them to learn more about potential ways to go about this.

Thanks again for reaching out everyone!

Joshua McMillion · Answer

@Tyler McGill

The post below is a similar naval officer looking to house a hack in Hampton Roads. I'm in the Army and not familiar with the area, but it would be worth reaching out to @Ralph Salazar.

Another potential avenue is to rent your wife's home when you move, and house hack a multi-family at your next location—just an idea.

https://www.biggerpockets.com/...

Sincerely,

Josh

Joseph Harr · Answer

@Tyler McGill I'd talk to some lenders to make sure your plan for your financing would work. Then I'd look for a multifamily house with 2-4 units in Norfolk near the base. In my opinion, it would be easier to rent out the whole units than it would be to rent out rooms individually, especially after you move and hire a PM. You can still rent out the extra room(s) in the unit you live in while you're there. Watch out for flood zones. If you do buy in a flood zone, make sure you factor in the cost of the required flood insurance.

Annapolis - USNA grad buy or rent?

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