Could you live "on base" for free? I just read that 1/3 of military move each year to a new base and that Personnel who were unmarried and without dependents had the least time between PCS moves.
My knowledge is limited to what I saw for my brother-in-law. Just retired from Army after 24 years. Many times in one spot for 2 years. The average, at most, would be 3 years, i.e. he was in at least 8 locations. Think about having to sell after 2 years or managing as a rental from afar. BiL did not buy until his last post. From what I can tell, that was the right move.....at least for them. Also, my understanding is that the military does not provide sales assistance (since they offer base housing) as compared to what many firms will cover (I never paid a sales commission).
Don't want to be a naysayer, but.........If you can control your location it's a different story.
I could live on base, but my actual station is a good 15 miles from housing. Plus, housing on base starts at about $1,159, which is nearly what I would spend on a purchase in the first place!
What you might be thinking about is single enlisted members who live in dorms/barracks. They do get to live for free, but in exchange they get no BAH. I'm an officer, so I can't do that.
according to BiL, VA loans can only be used for primary residence and not investments. Don't know if that is checked if/when you have to move, i.e. it is not an investment property originally, but if you choose to keep it after moving, it would become one.
Also, even if they don't check, you can only have one VA loan out at a time, so if you wanted to purchase in new location, you'd have to find another lending source....if you kept first house.
something to verify.
The loan pre-approval I have is for a VA loan, but the bank informed me that since I can pay a downpayment, it can be a conventional loan as well. Thanks for the warning.
I think your best case plausible scenario is you break even after factoring in transaction costs and opportunity costs on the money you wouldn't be investing in other investments. Which would be fine if you were an experienced handyman who enjoys working on houses. It sounds like you have *some* experience with DIY stuff but not tons (yes, you can learn to do all that stuff - but your first efforts will take longer and cost/suck more than someone who knows what they're doing).
So I guess you could look at this as an opportunity to get experience at remodeling and flipping and call that your profit. I'd be surprised if you make money though. It does not really sound like these places are smoking deals and if your only value added is some minor cosmetic stuff... you have to hope for big appreciation, as others have already said.
-W
Let us assume $1600 a month for combined mortgage, taxes, and renovations. Throw in about $8,000 in closing costs.
Let's then assume $900 a month in rent.
Looks like I'd save about $24,000 over two years by renting. So to break even, I'd have to net $25k.
If I want to get "paid" at a rate of $15 an hour for working on average 20 hours a week for two years, I'd have to sell at $30k above and beyond my break even point. That is quite realistic (unless the real estate market tanks).
Obviously the situation is better if I get a roommate, but I guess I am currently looking at giving up a LOT of my free time for a decent wage. I'm not sure that it's minor work to add nice tiling here and there, opening up a room, and doing much-needed landscaping, but the whole thing is highly dependent on the status of the market in two years. At the current status, I imagine I'd make an okay wage for all of my work. If the market picks up, I could make a pretty good wage for my work. But if the market falls, I might become a landlord before I am ready to.
I guess this is the kind of thing that works if, like MMM, you are experienced and interested in doing a quick flip (before the market can plunge) or if you are interested in landlording. I am not prepared to do that right now, certainly not from afar. It would be a different story if I was going to live in the area for 5-10 years, because then I could do things slowly, but the two year timeframe is too short to ride out market fluctuations, and too long to do a quick flip.
The deals I have been looking at now are not going to work, and they're the best the agent could find. He's looking to see if there are better pickings out there, but I'm going to start to look at apartments pronto.
Thanks for all of your advice and input.