Ready to make my first move

10 Replies

Good Day Everyone,

I'm currently stationed in the Charlottesville/Ruckersville area of Virginia. As of April, I would have been on station for a year and given the cost of living for the area, especially with the rental rates, I decided to purchase a new home with my VA Loan that will be completed in April of this year and not renew my current lease. The area is full of newly built homes/townhomes ranging from 250,000 - 450,000, older townhomes and single family homes with barely any duplexes. With that being said, for the cost and size of the home that is being built, it's way more cost effective to purchase a new home versus paying either close or a little more in price to rehab an older home. I should be located in the area for at least 2-4 more years since I'll be ETSing in 2021and will potentially stay local for a short period and wanted to get some opinions on my plan. My plan is to live in the home for the duration of my time here and eventually rent it out. My current rent is $1,277 (increasing to $1,300 for lease renewal), and my mortgage will be a little under $1,500 while paying $150 quarterly in HOA. With the cost of living for the area going up and also receiving a BAH increase to $1,900 for E-6 w/dependent, I figured I could average about 1,750-1900 in rent. I also plan to either house hack (w/VA Loan) or live in flip my next property (financing and then converting it into a VA Loan). Given the location and demographics of my current location, there isn't too many valuable options, which drove me towards the decision to purchase new, even though it's not my forever home. Also note that the population is growing due to the influx of military and government civilian personnel and the University of Virginia is also located here.

Current Apartment Info:                                     New Home Info:

(Rent $1,277) (Square Ft: 1,100)                        Mortgage ( est. 1,483)(Square Ft: 1690)

Details: 2/2, single level                                     Details: 4/2.5, Two Car Garage and Backyard 

@Aaron K. Thank you for the response. That is an option that I thought about, but leaning more along the lines of using one of the rooms as an AirBnB, due to being engaged and my son from a previous relationship living with me during the summer. 

After owning a single family home in Southern California (mortgage around $1,400) that we rent out now, we have found that it’s difficult to rent out at a profit. We are about breaking even. And that’s in So Cal. I just say this to double check that market rents are truly at what you think they are. We bought 7 years ago for ourselves, not planning on doing anything with long-term property ownership/renting, and are now hoping to do a trade-in at some point, considering that we aren’t making a significant profit. 

@Brittany Regts Understood. Thanks for your story, I thought about the possibility off breaking even as well or maybe even sell it within a few years. With two Government Agencies being here and an ARMY JAG school, I’m confident that I’ll be able to find a tenant, but you’re correct about ensuring that market rents are what I think they are. 

When "running the numbers" on the future cash flow be sure to include expenses such as maintenance and capital expenses. Even with the home being new now at some point you will have to replace some of the bigger ticket items if you hold the property long enough. If there is a lot of carpet in the home that will have to be replaced every few years with renters. We like just having LVT in all the rooms for that reason. I'm not sure if your mortgage estimate included taxes and insurance but of course those have to be factored in as well. You mentioned townhomes so that could have HOA fees too. Many landlords will figure in a vacancy rate of about 4 to 8%. I doubt yours would be as high as 8 (which is turnover every year) but you should plan for some vacancy. A good source for rent estimates is If you are taking all of that into account and breaking even (If that's your target) then should be good.

@Shera Gregory Thank you ma'am. Could you define the "LTV" acronym? There is carpet througout and I I would eventually want to switch it if it'll cost me less in the future. Yes, my mortgage included everything. I still have a few years until the time comes, and I will definetly utilize to for rental estimates.

Sure! ... we're not putting "Loan To Value" all over your house :) ... it stands for Luxury Vinyl Tile which comes in planks that are about 6 inches wide and 4 feet long. These products have improved over the years and the sturdy, thicker planks with foam padding built in that click together to form a smooth floor are quite nice.

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