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Should I Buy A House?


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#1 Ferguson500

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Posted 01 May 2018 - 17:03

I was selected in March and am headed off to basic training October 1st. WOCS starts January 3rd and I'm contemplating buying a house to live in for the 1.5 - 2 years I'm at Ft. Rucker. It doesn't really matter to me if I live on or off base. I just hate the idea of throwing my money away for rent when I could put it into a house that I can get my money back out of. It also looks like buying a house would cost me less money per month anyway. It seems like an easy choice to me, but I wonder why most people either live on post or rent off post. Anybody have any input?

#2 r22butters

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Posted 01 May 2018 - 17:43

Hmm, I once thought as you do,...then I bought a house,...well technically condo, but same idea.

With the added homeowner dues and taxes it came out to more than what I had been paying in rent, much more.

A year later I put it on the market. A year after that I started lowering the price. A year after that I started looking into a short sale. Two years later I said f*ckit and finally let them forclose.

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#3 Wally

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Posted 01 May 2018 - 18:24

I was selected in March and am headed off to basic training October 1st. WOCS starts January 3rd and I'm contemplating buying a house to live in for the 1.5 - 2 years I'm at Ft. Rucker. It doesn't really matter to me if I live on or off base. I just hate the idea of throwing my money away for rent when I could put it into a house that I can get my money back out of. It also looks like buying a house would cost me less money per month anyway. It seems like an easy choice to me, but I wonder why most people either live on post or rent off post. Anybody have any input?


Did you factor in maintenance costs? The cost of buying the house, especially commissions?
You gonna put sweat equity in, add sufficient MARKETABLE improvements to increase the price? Unless you're in a really, really hot market, and/or willing to buy a distressed property, 2 years is kinda slim you break even on.

I'd rent in a New York minute in your shoes.

Just a pilot (retired, so I have a LOT of time)...


#4 ByteFlighter

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Posted 01 May 2018 - 18:44

I was selected in March and am headed off to basic training October 1st. WOCS starts January 3rd and I'm contemplating buying a house to live in for the 1.5 - 2 years I'm at Ft. Rucker. It doesn't really matter to me if I live on or off base. I just hate the idea of throwing my money away for rent when I could put it into a house that I can get my money back out of. It also looks like buying a house would cost me less money per month anyway. It seems like an easy choice to me, but I wonder why most people either live on post or rent off post. Anybody have any input?

 

 

 

Don't buy a house...that simple. You won't be living at Rucker for very long. You will be too busy with the WOFT program from green to wings and you will want to be on base during most of the training...

 

Once you PCS to your new base (unless it is OCONUS) you can look at buying something there....The Enterprise/Dothan area market is pretty stagnant btw. You may break even, you may not....Depends on the interest rate but that is the last thing to be thinking about while you are training.

 

I totally understand where you are coming from with wasting your BAH on rent...I've always disliked the way the military throws our equity away to property management but this step of your process is extremely important and focusing/stressing about breaking even or fixing anything up is not a good idea.



#5 Ferguson500

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Posted 01 May 2018 - 18:57

Yeah, I considered just about everything besides the market in Alabama. I'll take your advice. Now the question is, should I live on post or rent off base? I've read a couple threads on it and most people just didn't like the commute. I won't get any BAH if I live in housing on base, right?

Thank you for the replies. I'd rather not dick myself financially and academically for trying to buy a house that I'd live in for 2 years.

#6 mike0331

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Posted 01 May 2018 - 20:10

I've briefly thought about it -- I don't think it would be a great idea to buy a house down there unless you have a good amount of reserve cash. I own a home up here (outside Boston) and it has been an excellent investment. I also gutted both bathrooms and kitchen in our home, and invested at least 3 grand in tools and thousands of hours in learning in the process.

A quick look at an amortization calculator shows that given an average home price of 143K in Dothan and interest rates at 3.75(optimistic), in 18 months you'll be paying 662/month and will have paid $4K worth of principal off. As others mentioned, the market is pretty stagnant down there. You might do OK assuming you find the right house and have the time to put in the sweat equity (and the skill and tools) or are willing to hold on to and rent it for the foreseeable future. Also assume another 3-5K in closing costs at the outset. Also as a homeowner, things pop up. If you can't fix them yourself, they will cost you many thousands very quickly. 

If you want to pick up either a severe fixer-upper or a future rental property, it may be worth it. To just save on the "rent" and flip the house in 2 years, forget it. Unless Amazon decides to move their headquarters to Dothan, that would probably be a bad idea and you'll lose more money than if you rented. 

 

Mike



#7 Ferguson500

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Posted 01 May 2018 - 20:35

I've briefly thought about it -- I don't think it would be a great idea to buy a house down there unless you have a good amount of reserve cash. I own a home up here (outside Boston) and it has been an excellent investment. I also gutted both bathrooms and kitchen in our home, and invested at least 3 grand in tools and thousands of hours in learning in the process.

A quick look at an amortization calculator shows that given an average home price of 143K in Dothan and interest rates at 3.75(optimistic), in 18 months you'll be paying 662/month and will have paid $4K worth of principal off. As others mentioned, the market is pretty stagnant down there. You might do OK assuming you find the right house and have the time to put in the sweat equity (and the skill and tools) or are willing to hold on to and rent it for the foreseeable future. Also assume another 3-5K in closing costs at the outset. Also as a homeowner, things pop up. If you can't fix them yourself, they will cost you many thousands very quickly. 

If you want to pick up either a severe fixer-upper or a future rental property, it may be worth it. To just save on the "rent" and flip the house in 2 years, forget it. Unless Amazon decides to move their headquarters to Dothan, that would probably be a bad idea and you'll lose more money than if you rented. 
 
Mike


The idea was definitely to buy something cheap that needed work. Unfortunately, flight school sounds like a full+ time job. Just doesn't seem like I'll have time for it☹️
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#8 mike0331

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Posted 01 May 2018 - 20:47

There's another thread around here where someone said they had time to fix a place up. Stumble upon some major issue or something though... forget it. Almost every project I have jumped into took 3-4X the amount of time I thought it would... except my kitchen, but I was up at 6-7 working on it until 9-10 most nights. 

 

Mike



#9 Thedude

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Posted 01 May 2018 - 20:50

You won’t have the time or the desire to put enough work into the house to make it profitable. You will almost certainly lose money on the house if you sell in two years after purchase once you factor in closing costs. You might break even but that’s a lot of hassle to deal with just to save a few bucks each month.

#10 ee15

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Posted 01 May 2018 - 22:21

I can give some input on this, contrary to most people responding, I actually bought a house at Fort Rucker while I was there. I kept my eye out for a good deal and bought a foreclosure. I spent some time on weekends, and the brief periods I was on a hold working on the house. I eventually repainted the whole exterior. And fixed any issues with the house.
I bought it very cheap for $60,000. The estimate on the house is $110,000 now and I have had a renter living in the property since the day I moved out it hasnt been vacant once. I make a nice profit every month on top of them paying off my mortgage. It has been such a good deal, I cant help but consider buying another property around Fort Rucker and rent it out. You have to make a very good decision, get it inspected, and know what you what to do with the house when you leave in 2 years, it will be a blink of an eye.
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#11 Ferguson500

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Posted 01 May 2018 - 22:36

I can give some input on this, contrary to most people responding, I actually bought a house at Fort Rucker while I was there. I kept my eye out for a good deal and bought a foreclosure. I spent some time on weekends, and the brief periods I was on a hold working on the house. I eventually repainted the whole exterior. And fixed any issues with the house.
I bought it very cheap for $60,000. The estimate on the house is $110,000 now and I have had a renter living in the property since the day I moved out it hasnt been vacant once. I make a nice profit every month on top of them paying off my mortgage. It has been such a good deal, I cant help but consider buying another property around Fort Rucker and rent it out. You have to make a very good decision, get it inspected, and know what you what to do with the house when you leave in 2 years, it will be a blink of an eye.

Thank you for the contrasting opinion. I've heavily considered something that I can rent out when I leave. Are you still at Ft. Rucker or do you use a property management company?

#12 BM1

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Posted 02 May 2018 - 02:52

Buy a House. Just don't buy in a crappy area. Currently Ft. Rucker is seeing a low amount of pilot throughput that is unsustainable.  They are increasing class sizes now.  So if your smart your catching it at the bottom of the market, because all those guys who bought in 2012 at high prices and then couldn't rent them have let them foreclose.  We bought a foreclosure, moved during the last bit of primary, which I'm sure hurt my grades, but in the end did not matter.  Bought for 80k, which in Alabama is a 498 a month payment when your getting 1100 BAH.  We decided when we left not to be greedy and rented the house for 850 a month to ensure it wouldnt sit empty (Others in the neighborhood go for 950-1200) and had a renter in under a week who just signed on for another year.  I am considering buying a second one their due to the fact that it is a depressed market, but that just means no one is renting crappy town homes. There are plenty of renters for houses, Enterprise has a large stable government population thanks to Ft. Rucker.  Look in the neighborhood west of rucker and north of the blvd about halfway between base and bollweevil circle.  There was another house on my street that foreclosed a year ago and sold for 90k and is now back on the market for 180k.  Plenty of opportunity if your the type who would rather spend your weekends improving your financial situation instead of destroying your liver in florida. (Although both is certainly an option)  We use a property management company, 100 a month and totally worth it.  They are not the best and I have some complaints but it reduces the headache.  Alabama does not charge income tax on the first 10k you make in state as well, so youll only have to deal with federal if you come from a state like Texas that does not have income tax.  And taxes on a 100k house in Alabama is only a couple hundred a year since they have an income tax. So best of both worlds.  Contact Pam Tyner at Linda Simmons realty, the best no BS realtor ive ever dealt with.  Was gonna use USAA, already approved and she found us a much better local company that saved a lot in closing costs.  I was using multiple real estate agents their when I began looking, and she's the only one I never caught trying to lie about something to steer me to or from a certain property and put up with me wanting to see just about everything.


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#13 mike0331

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Posted 02 May 2018 - 07:08

Hmm... now you guys are making me think. I'll be getting the adjusted BAH as well which is a little over 3K/Month... of course I'll need to pay my $1800 mortgage while I'm gone. I'm going to sublet a couple rooms to people I know while I'm gone, but I'm not taking a lot of money in exchange for them maintaining the house. 

I do have everything from sliding compound miter saws to table saws to pex-crimping tools. I wouldn't want to do much more than cosmetic stuff, maybe replace cabinets/countertops, put down life-proof vinyl flooring, etc. I do have a few months between taking the bar and heading to Rucker, maybe I'll start poking around then. I also am bringing my wife, and while she's planning to work, she's an interior painter now. 

 

My concern with owning a house as a rental property is large expenses though. Boiler goes, needs a roof, etc, all that stuff costs much more than a years profits based off what you guys are saying market rate is down there. 

 

Mike


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#14 SBuzzkill

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Posted 02 May 2018 - 11:18

There's some really good advice above from BM1.  

 

As for me I waited until a year after I got to my real duty station to buy.  Here's why:

 

  • I had never bought a house before, didn't need the distraction during flight school.  I needed a place to live ASAP after WOCS and learning the area and feeling out the market, closing on the house, etc. was just too much.
  • IIRC the majority of my mortgage payments was going towards interest for the first few years, so when I did buy I didn't really build equity until halfway through the 5 years I owned my house.
  • I didn't want to be trying to learn, progress, and integrate into a new unit while trying to worry about a rental house that I couldn't fill.
  • I went VA loan, not buying at Rucker freed up my loan to buy where I went afterwards.
  • I knew I would be at Rucker for less than 2 years, which wasn't worth the hassle of buying a home.
  • I wasn't convinced the Rucker market would be a good one.  It was a good choice because a years after I left we downsized and I think it would have been harder to fill a rental.
  • Personally, it was incredibly stressful owning a house on the other side of the continent.  I imagine doubly so if I was deployed and couldn't keep tabs on it.

So anyways, that's why I didn't buy there.  If you're motivated and willing to put the work in I think you could do alright.



#15 ee15

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Posted 03 May 2018 - 01:20

If you do end of renting it out or buying I went through Aero Real Estate in Daleville. They are great. Management fees are 8% for the first year and move up to 10% after that. I have zero complaints after two years of dealing with them.

As far as risks like roof, foundation, termites, HVAC... get a thorough inspection and be there with the guy while he does it. The house I got has a 5 year old roof which was a major selling point for me.
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#16 mike0331

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Posted 19 July 2018 - 14:24

Wife has been on me about this again. She really wants to buy a fixer-upper and not rent(too much HGTV) and then rent it out after we leave. I've seen some ranches that just look like they need a bit of TLC in Enterprise in the 70K range. I'm figuring 10-15K they could be "updated" assuming they are structurally solid. Then we'd rent it out. A 15 year mortgage on 70K seems to be quite a bit lower than the prevailing rental rates, which should only go up with time. 

 

If the place doesn't need anything major, I know I can do the vinyl life-proof flooring, cabinets, countertops. in pretty short order. None of that is major work. I did our current kitchen from the studs, new hardwood, etc... that was a PITA. 

 

It's looking like I have an April WOCS seat, and I'm not in a solid career at the moment (take the bar next week, and don't get our results until October) so I could head down a couple months early if need be. 

Thoughts? 

Mike



#17 Dmurray

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Posted 19 July 2018 - 20:10

Mike,

I know several people who bought houses while going through flight school. While the idea is great, you should consider how much time you have (or won't have) to "fixer upper."

Your time between flight line, academics and studying will be limited. I would just consider how motivated you are to spend your limited free time renovating a house.

I suppose if you and your wife are working together, you'd be spending time together. It's not impossible but not exactly easy either.

#18 mike0331

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Posted 19 July 2018 - 22:53

Certainly understood. Renovated our current house (still somewhat in progress) so I know what to expect for various projects. My wife is great at painting, so that's all her. Seems there is stuff in the 60k range that is structurally sound but needs cabinets, countertops, flooring, and TLC. We've also discussed heading down a couple months early.

Are there areas to look at, areas to avoid?

#19 METT-TC

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Posted 20 July 2018 - 08:47

I'll be getting the adjusted BAH as well which is a little over 3K/Month.

 

 

You've got me confused on this...adjusted BAH? You somehow receiving dual BAH (for family not PCSing to Rucker) or something?

 

DOD BAH rate query for 36362 (Rucker) is $1149 w/dependent and $957 w/o dependent for W-1 is the reason I ask.



#20 ElJay

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Posted 20 July 2018 - 08:56

Im in a 67 class and cant imagine doing repairs on a home with how busy Ive been. Plenty of free time during WOBC, but all depends on bubble length before you start flying.

My 72 buddies on the other hand get drunk and play video games throughout the week.




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