This is my first post on this page, and hopefully, one of many to come! I recently got permanent change of station orders to Hansom Air Force base. While doing research, I encounter that most of the areas around HAFB are SUPER expensive! My wife and I are looking for options to buy a house there (rentable place) in which we can live but hopefully rent when we move to another location. My budget is 400-500K With that said I have two questions:
1. Which areas do you recommend?
2. Do you even recommend buying there?
Looking forward to all feedback and advice from all of you on this one.
@Javier Colon Well, you've picked (or more precisely, been assigned to) a really expensive area of the country.
Here are some general guidelines:
1. The closer to Boston, the more expensive properties are.
2. Metro West is more expensive than south of the Mass Pike (I-90).
3. Commuting from the to Hanscom from the east will be a little easier, assuming 9-5 type hours, but those towns are a lot more expensive. Commuting off-hours will be substantially easier.
I can help you to make some smart decisions regarding the towns you want to live in. Let's make a connection.
Welcome to BP Javier and thank you for your service.
How often do you and your wife move? It probably doesn't make sense to invest in the greater Boston area if you move every few years for work. I totally understand desire to paint the walls the colors you want and to own the place, but MA has several downsides. You've already found out it's expensive. In addition, the landlord / tenants laws in MA tend to favor tenants. For example, if you buy a property before 1978 and a family with children rents the property you will need to check for lead paint. If the property has lead paint you will need to remediate the problem. Somebody could also write a book on complying with the security deposit rules.
All of that being said, if you are going to stick around or are committed to buying a house, I would suggest a multi-family or single using an FHA loan.
I just bought a house in Wilmington which is not too far from Hanscom. With your budget you should be able to buy a decent house in Wilmington but if you are looking to buy in Lexington ... Good luck!
Hi @Javier Colon ,
Thank you for your service! Yes there are a lot of expensive areas around Boston but there are also nice areas that are still affordable. Like Dan mentioned, there are many different rules that go into renting in MA, but it could still be possible depending on how long you would be living there and the path you want to take with it. I would be happy to talk more with you about what you are looking for if you still have questions. Best of luck!
@Javier Colon You should begin with the end in mind. How much could you rent a $500K home for when you PCS? Let's say $3,000. That would be $36,000 per year before expenses. The mortgage would be $20,000 per year not including taxes, insurance, repairs, management fees, or HOA. Factoring those expenses you might break even at $36,000. My point is that you will not make money using a $500K house as a rental unless you buy it for far less than $500K.
Just as you have realized just about all of the property out here is pretty expensive. There are some affordable areas within an hour of Hanscom AFB within your budget. Depending on the amount of work you're willing to put into the property there are some opportunities to get some pretty solid cash flow in this market. Also if it's your first time buying a home, Massachusetts has a few programs to help you out.
I'm no real estate expert like a lot of the other smart guys on here, but I also work at Hanscom AFB. I know the areas pretty well and could be of some assistance to you....Let's connect
@Charlie MacPherson Thanks for the advise!, Already connected, I will be PCSing to the area in June-July timeframe. We'll keep in touch.
@Dan K. We will be moving approximately every 3-4 years from each base. My interest in buying a house is to mainly have that as a passive income investment in the future.
Already looking at multifamily houses, but will probably not be my primary living quarters there. I have enough money to where I can use a BRRRR system/approach with a multifamily if the opportunity comes up.
@Javier Colon My advice: don't buy in such an expensive area with the intent to rent it out after you leave because 1) it won't create positive cash flow and 2) you will only be banking on appreciation which is never a smart investment decision. If the market crashes and you are forced to PCS, you are then stuck with a house that won't create positive cash flow and is underwater because you used a VA loan and have zero equity.
Instead, you should rent a home that is close to work where the rent is less than or equal to your housing allowance and save money on your commute each day; maybe bike to work instead. Maybe even look at base housing. Then, if you still want to invest in real estate, use your capital to go buy a rental property in a market that makes sense where you can create positive cash flow immediately. Look for rental property in the midwest or south where it is cheaper and the rent to purchase price ratio is better (Memphis, Nashville, Cleveland, Columbus, Indianapolis, Jacksonville, Montgomery, etc). I suggest reading one of the latest books from Bigger Pockets: "Long Distance Real Estate Investing" by David Greene.
@Javier Colon I grew up in New England and just got out of the Marine Corps so I can understand your shock at looking up MA prices.
I'll add to what @Anthony Dooley said about starting with the end (Rent) in mind. Whenever I PCS'ed, I treated my homes like investment properties from Day 1 and ran the number on them accordingly. One factor that contributes to rents around Bases (and not so much at Hanscom as opposed to Vance) is what BAH is for your ideal renter. If you get to expensive of a house you will dramatically cut your pool of available military renters. Renting to people who live on base gives you a competitive advantage since you know and understand their lifestyle better than other landlords.
@Javier Colon My suggestion is before buying anything, look at it through the eyes of an investor first rather than a homeowner looking for a place to live. If it's not going to be a good rental and cash flow once you are transferred, then it's not a good a good long term buy and hold investment. On the other hand, if you're going to be stationed there for several years and it's an area with good appreciation that could be a different story.
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