To buy or not to buy a house while on Active Duty?

2013-11-25T17:03:11-05:00

Response by SSG Private RallyPoint Member made Nov 25 at 2013 5:20 PM

2013-11-25T17:20:30-05:00

I won't buy a house on Active Duty because when I buy one that means I'm permanently settling down there for the long run....ready to plant roots and watch them grow. Not to mention I plan on building mines and I think I'll LOVE being the first (and only) occupant to live in it, with my family of course.

Being Active means I'd have to rent it out to unknown tenants and that's a chance I don't want to risk or take.

Response by SGM Matthew Quick made Nov 25 at 2013 11:49 PM

2013-11-25T23:49:26-05:00

Depends on the location. Personally, I will not buy while on active duty.

~Good~

I bought a house (and sold it two years later) in Savannah, GA and made a profit when I sold it.

~Bad~
I moved to just south of Atlanta (between Forts McPherson and Gillem) bought a house and lost money for years and finally went through the deed-in-lieu of foreclosure process (after failing to get approved for a short-sale on two separate occasions).

Note: Both Forts McPherson and Gillem closed due to BRAC.

Response by Maj Private RallyPoint Member made Nov 26 at 2013 12:58 AM

2013-11-26T00:58:45-05:00

I worked for an E-7 who had purchased a house at each of his 8 duty stations during his 22 year career. He held on to those houses and hired a property manager for each. When he retired, he owned five of those houses outright, was 12 months away from having the other three paid off, and was set to play golf for the rest of his life....while living better than he ever did while working for a living. If you manage your money properly, buying homes while on active duty can set you up for life. If you have piles of debt before you buy your first house.....you are at a MUCH greater risk of suffering significant losses as a result of a home purchase with such a short window of personal use.

Response by SFC Rich Carey made Nov 26 at 2013 11:42 AM

2013-11-26T11:42:55-05:00

I was fortunate to buy a house at several of my duty
stations and resale for a profit, each time. You need to do some homework. Research the
area, how are the schools, what other industries are in the area besides the
military.  Don't buy a 2 bedroom, they are hard to resale. Don't always rely on the real estate agent to do a fair and honest comparative
market analysis for you, conduct your own. Take a course in real estate for
your basic knowledge, one thing you will learn is everything is negotiable.Helpful hint- just becuase you qualify for $400,000 doesn't mean you can afford a $400,000 house. Look at what your budget can afford, and don't forget on mortgage loans taxes and other associated fees happen later and before you know it you are in a hole and the alligator will bite you.A word of warning there are no <span style='line-height: 115%; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;'>guarantees and it is a risk.

Response by SCPO John Lambert made Nov 26 at 2013 12:10 PM

2013-11-26T12:10:45-05:00

I bought a place in Escondido in 09 and have managed to stick around the area. I have had to do a little more sea duty then I wanted, but thats fine. It took me a long time to go out and buy a house. I always thought it was not a good thing to do while on active duty especialy with the 2 year primary residence rule that the VA has. I wish now that I would have bought earlier in my career.

Response by SFC James Baber made Nov 26 at 2013 12:39 PM

2013-11-26T12:39:59-05:00

I made two purchases during my time of duty, sold one for profit, one at a loss, so I guess it balanced out.

Response by SFC James Baber made Nov 26 at 2013 12:45 PM

2013-11-26T12:45:13-05:00

I also have to agree with the fact that if you are ready to settle for good that you can buy while still on active duty, possibly rent it out while being stationed somewhere else. Eventually return to that home later when you are done on duty if that is where you plan on settling or sell it if need be as well.

Response by PO3 Matt Schmidt made Nov 26 at 2013 1:03 PM

2013-11-26T13:03:34-05:00

One of the biggest advantages to purchasing while on active duty is the fact that BAH is untaxed--That is a huge benefit. Not to mention, the interest deduction you can take each year when filing....

Response by MSgt Fred Gondzar made Nov 26 at 2013 8:03 PM

2013-11-26T20:03:54-05:00

Excellent question!

In my case, I lived in base housing most of my USAF career so that when it

came time to PCS, I wouldn't have the extra stress of having to sell a
house every time.

When I got out, I bought a house and paid it off as fast as possible.

That way.....no mortgage to worry about!

Response by SSG Terry Back (Martin-Back) made Nov 27 at 2013 4:42 PM

2013-11-27T16:42:15-05:00

Every market is different and you have to evaluate each neighborhood based on a comparable market analysis. I have a real estate program that allows me the opportunity to do a market analysis and market trends for almost any address in the US. I will caution everyone to understand, there are many variables that need to be taken into consideration; what is the age of the house? Older homes require more maintenance and you need to know the age of the mechanics of the home as well as the roof. What is the appreciation rate of your community? Most communities appreciate between 2.7%-4.3%. If you have questions... contact me. My wife and I own a real estate franchise, I am a general contractor and we got started in the real estate business by flipping houses while still on active duty... in Kansas! We have been in North-central Florida for 18 years.

Response by SSG Terry Back (Martin-Back) made Nov 27 at 2013 5:14 PM

2013-11-27T17:14:11-05:00

Here is a link to my Blog; http://terrymartinback.blogspot.com/2013/08/homeownership-is-not-investment.html

The title is "Home ownership is not an investment". Common mistakes home owners conceive.

Response by LTJG Joe Nichols made Nov 27 at 2013 5:34 PM

2013-11-27T17:34:52-05:00

If you can afford the payment, buy a house or condo and enjoy it. You are gaining equity while making the payments and you get the government tax benefits too. When you PCS out, don't sell, keep it and hire a rental company to rent it out for you and have someone else make your mortgage payment for you. When you move, and your income supports it, buy another house, live in it and enjoy it and repeat the process as many times as possible. When you retire, you will be so far ahead of the game with your rental income, and possibly paid off properties, you will be able to do anything you want.

Response by SSgt David Baggaley made Nov 27 at 2013 5:38 PM

2013-11-27T17:38:56-05:00

I would purchase my home through Strongbrook so that when I got out of it, I could use it as an investment home and rent it. Here is a website that talks about Real Estate Investing - something you can still do while on Active Duty and will probably replace your income easily if you do it this way.
http://baggaley.strongbrook.com

Response by SSgt David Baggaley made Nov 27 at 2013 5:41 PM

2013-11-27T17:41:30-05:00

I would purchase a home - but on the basis that I understand it is an investment home - and when I move out I will likely be renting it. That means I need a structure in place so that I am not losing money on being an investor. Here is the place I do my real estate investing through:

http://baggaley.strongbrook.com

It is a do it for you experience, so that I invest as little time and effort while taking less risk and getting the best returns on my investment. Try it out, take a look - you won't regret it!

StrongbrookWelcome to Strongbrook

We don't just teach you how to succeed in rental real estate - we do it for you! Our turnkey program averaged 19.8% ROI* last year and has changed rental real estate investing for over 1000 investors ...

Response by CPO Private RallyPoint Member made Aug 14 at 2014 6:08 PM

2014-08-14T18:08:02-04:00

Buy. In the short of it, the BAH you recieve is going to go somewhere, might as well benefit you.

Response by MCPO Private RallyPoint Member made Dec 27 at 2015 8:30 PM

2015-12-27T20:30:18-05:00

I've seen both sides of this question first hand. I've seen military members purchase homes without any major issues and turn a profit. I've seen others lose money when trying to sell (or can not sell), and have a difficult time with renters when transferring. My advice to anyone wanting to purchase a home while on active duty is to make the best informed decision for your particular situation. Do your research and homework and know your limits and long term plan with the house. Finally, owning a home is a way to turn a profit while serving, but it comes with risk. Renting a place under BAH is a much safer way to turn an instant profit each month without as much risk.