Active Duty seeking advice

[Gregory Hunter]

I have been reading through this site for days basic guides, searching, etc. I have learned a ton from this site. But I have not made a decision so I figured I would post all this up and see what the experts say. So here goes.

I am active duty in the Navy, and my wife and I are playing with the idea of purchasing a house at my next duty station. The main reason is because the rent in the area would put us in a tighter monthly budget than we are used to since rent is high compared to my housing allowance. The low housing market and interest rates are a plus too. I will be going to the Dayton area to be a local recruiter, and I have been looking at the Huber Heights and Vandalia areas. The only thing that is holding me back is that I will be moving in 3 years and if I can not sell the house I will have to rent it out, or leave my family and go by myself to my next station.

My current scenario is using a VA backed loan financing between $110,000-$130,000 for a monthly payment between $650-$780 with estimated taxes and insurance. Before the housing market downturn houses in this neighborhood were going for $140k-$180k. Rent in the neighborhood is currently $1,000-$1,800, which is a big range IMO. I would try to rent for $1,100-$1,200 based on current market. So that is about 35%-40% to set aside for repairs, vacancies, etc. I will need to use a property manager if I need to rent it out. I have no idea what that costs yet, I am guessing 10% of monthly rent then a fee to place tenants.

There is so much more info e.g. what shape the house is in etc but I am trying to keep this short.

So to all the experts out there how am I really sitting in regards to selling after 3 years and my possible renting scenario. If rent goes up in the area after 3 years I should be sitting nice on that end since I am basing everything off renting right now.

[James Vermillion]

Thanks for the tag Karen Margrave. Unfortunately I am not retired, but I did just separate active duty last summer. Thanks so much for your service Gregory Hunter! With the information you have given I would agree that you should consider doing it, in fact, I have recommended several people moving to Wright-Patterson AFB to consider buying in that area, as the property price to rent is quite attractive.

They key to this, is to look at it as an investment, and purchase accordingly. That means understanding how to analyze current market value, estimate repairs if the property needs them, be sure of the rent the property will bring in, and understand expenses. By royally goofing any of these steps you can find yourself stuck with a not so great property at the end of your three years.

Having said that, none of those steps are overly difficult, especially if you seek assistance when needed.