Rent or buy (active duty military edition)

1 Reply

My goal is financial independence, or more specifically to have enough monthly income to where I don't need to re-enlist 2 years down the line.

Currently, I rent. I'm very satisfied with my qualify of life here but it is rather expensive taking around 30-40% of my monthly income. I could just bide my time here and focus my attention elsewhere. 

I was considering purchasing a duplex or multi-family home, but I'm a first time RE investor and I'm worried about the debt, being saddled with repairs, dealing with tenants, and the worry of weak cash flow. I'm also worried about a declining quality of life due to hearing tenants wandering around or just in needing to deal with broken pipes, etc.

Another option is to find a single family home and hope it appreciates.... I don't feel like this is a great option if you're looking for financial independence, but I probably would get a good quality of life with this option and could do well if the housing market is appreciating. 

My credit score is decent but not great, and I have sufficient savings for a downpayment and no other debt but I plan on using the VA loan so that should mean no downpayment or property insurance. I was about to email a real estate agent about finding a multi-family home (I'm a little south of Baltimore, north of the DMV area) but I'd like to hear some feedback first about which option is best. Which option would you go for?

From the sounds of it, you don't seem 100% ready to take the leap into hands-on multifamily investing. And THAT'S OKAY!  House hacking is great option, but I can see how it isn't for everyone. 

I definitely wouldn't count on appreciation only at this point. The market has been appreciating for quite some time, but a lot of the more experienced people (and statistics) say that we are due for a correction in the near future. Theoretically, properties will still appreciate over time. But you don't want that to be the only or primary factor in a property purchase.

If you aren't really enthusiastic about the idea of a multifamily property, you may consider the idea of a live-in flip. Find a property that needs some work and live there for a while fixing it up. Once you are ready to move along, you can either turn it into a rental or sell it without major tax penalties. (Obviously there are technicalities to that, but that's the general idea).