Profile picture for gmarq

Is it smart to buy a house right now in El Paso, TX? Army will be paying for it with BAH $1165.

1st time home buyer.Using VA loan. Army will be paying BAH (Basic Allowance for Housing) $1165 a month for mortgage, insurance, utilities, etc. House will be in El Paso, TX. Will be moving again within 3 to 5 years of possible purchase. Afraid to lose money. Pre-approved for 120k. Don't want to get stuck with a house that nobody wants to buy or rent when it's time to move again.
  • November 12 2010 - Fort Bliss
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Answers (4)

If you are receiving a BAH of $1,165.00 a month and you rent a house or an apartment, in my opinion you are already loosing money. If you are here 3 years in El Paso Tx ,  the total amount you are loosing is $42,000.00 and  if you are five years you will loose $70,000.00.
If you invest in a property you have 2 option when you leave El Paso, TX.
1)  Sell the property if it has equaty and you can make some money, or
2 ) rent it from 2 to 5 yrs. for house get more equaty. Aproximate monthly payment in a $120,000 is about $900.00 at 4.5% interest rate on a 30 yr loan. Probably you will be able to rent it for more than $1,000.00 a month and instead of loosing money you will be making at least $100.00 more a month while the house is rented . Remember buy a house is the best investment you can do right now. Banks or Stocks are not paying you what you can make renting or selling a property. Take advantage of BAH and invest it right now is the best time to do it.

Regards

Luz E. Garcia
  • December 14 2010
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Profile picture for MoniqueU
you get the housing if you rent or if you buy. why buy?

I would rent a nice apartment or house  in el paso. let someone else pay for all the problems. there are some really nice new apartments out there.

you get the texas no state taxes if you rent or buy.  why pay property taxes when you can rent a really nice place for less money.

the rents are really low in el paso so you would never make your money back on the home in the price range that you are looking. Nor will you make enough rent to cover your mortgage if you buy.



  • November 12 2010
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Profile picture for the_country_hick
I would ask a simple question. WHY do you want to buy a house? If you are not going to be there forever it could be a very expensive money losing proposition. Look at realtor fees (often about 6% to sell). Then look at closing costs on both the buying and selling side. Those added together will take 10-12% (perhaps 16%) of the selling price directly away from you.

If house prices drop more (it is a possibility) you would lose a lot of money. If hosue prices stay the same you would lose money. If house prices go up do you think they could realistically go up more than 12%?

If you are near a base odds are you could rent it to some other military member unless that base gets closed. BUT do you want to have to pay someone to take care of the rental when you are gone AND pay for needed repairs?

I would say to think about interest rates. When you increase interest rates by 2% you lose almost 1/4 of buying power. I would expect with minimal pay raises to see that cause house prices to drop by almost 1/4.

Once you own the house you are stuck with it. You have to take care of it. I is very possible no one would want to buy THAT house when you move. It is possible someone would. That is always a gamble.

As far as the smart thing to do you need to do some research. The 2 blogs below show the basic way to figure his equation out.

Using your financial numbers this helps you to look to determine which makes more economic sense be it renting or buying. It DOES leave out house prices. I expect them to go lower but that is not a guarantee any more than prices rising is.
"Does it make more sense to buy, or to rent? Here is the way to find out for sure."

Then read this one. It shows some very legitimate reasons why renting even paying more can be the best economic decision. Read this for a very different perspective than most would show you.
"Why rent if you could buy for less money? Valid reasons inside."

Make sure you look at amortization tables for a mortgage AND only go fixed rate. It appears that inflation will go up dramatically as the federal reserve is just printing money like it is worthless making it go that direction.

I think you will find renting a place is really the best solution.
Short term (meaning under 7 years) does not pay off well in a flat or declining market. But do your research and then look at the financial risk of buying and being stuck with the property and then at the rental income (should have a healthy margin to make cents and dollars. I have seen 30% mentioned.   If you want to buy go ahead, Just do it with your eyes open. Part of that means looking at the foreclosure situation in your area and the general price trends (allowing scepticism for the $8k buyers bribe now dead) to see what you think.
  • November 12 2010
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Profile picture for wetdawgs

I would recommend avoiding purchasing unless you can plan to live in the house for at least 5 to 10 years.   Chances are good that after five years, at best, you will break even.   It is quite possible you will lose money.

Renting adds tremendous flexibility.  If you have to move with a few days notice, you don't have the huge challenges and expenses etc of selling. 

  • November 12 2010
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