Do Naval aviators move often? The reason I ask is because someday I hope to live on a large plot of land. Is this possible because officers must move often and cant really live in one place for long, so investing in a large piece of real estate is out of the question? What are some of places one can expect to live if becoming a pilot? Any help would be appreciated.
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Investing in a home/land while in the Navy?
- Thread starter krumble
- Start date
You'll live by the coast:
Pensacola, Corpus Christi, Jacksonville, Norfolk/Virginia Beach, San Diego, North LA (Pt. Magu), Lemoore, CA, Whidbey Island, WA, Hawaii, Japan, etc.
Bottom line, you'll move a lot, and most places are too expensive for Naval Officers to buy tons of land.
Use the search function in the future--or google works well.
Pensacola, Corpus Christi, Jacksonville, Norfolk/Virginia Beach, San Diego, North LA (Pt. Magu), Lemoore, CA, Whidbey Island, WA, Hawaii, Japan, etc.
Bottom line, you'll move a lot, and most places are too expensive for Naval Officers to buy tons of land.
Use the search function in the future--or google works well.
well pensacola isn't very expensive real estate off the coast a bit.
I would suggest that if you want a plot of land go ahead and buy it and rent it out to people. Real estate is almost always a good investment.
But yea you probably won't live there til you retire.
I would suggest that if you want a plot of land go ahead and buy it and rent it out to people. Real estate is almost always a good investment.
But yea you probably won't live there til you retire.
IF you take care of it, or find a good property manager. IF you can keep it occupied and not get raped by mortage payments on a vacant property. IF you don't have to evict the tenant from hell who trashes the place (college kids, bitter assholes, crazy cat ladies etc.) IF it doesn't get schwacked by a hurricane/tornado/earthquake/pick-your-disaster, losing half its value and leaving you upside down on a mortgage.
All those things were supposed to be a given lol.
GREAT! My first post and I get to wax eloquent on two of my favorite subjects. Naval Aviation & real estate.
Previous posters have pretty well addressed some of the questions. From the time I left college to go to Pensacola in 1965 -to when I got off Active Duty to take an airline job in 1971, I moved 13 times. Don't know how that compares to today, but you get the idea. Your milage may vary.
Real estate has done VERY well by our family. My ONLY regret is that I didn't get aggressive until AFTER I had left Active Duty. My immigrant grandfather, who prospered through the Great Depression, told me; "always pay yourself first", meaning to put away a good chunk of change before you started paying everyone else.
I SHOULD have bought some property everywhere I was ever stationed! When I left Va Beach in 1971 there was not much of anything (houses) South of Sandbridge Road, on the beach. You could have picked up lots a block or two off the beach for in the $2,000 range. Could have gone down to Elizabeth City, NC and gotten even more, for less. I spent the ski season in Aspen that winter and could have bought land in Teluride for next to nothing.
I realize that was in 1971 . .and a LT back then on flight pay was pulling down the princely sum of maybe $700/mo . .but I managed to pack away over $25,000 in cash in the bank in those 6 years . .and when I think of what that would have bought and what it would be worth today!
Instead, I moved to San Diego, eventually, when UAL furloughed and my 'job' evaporated in Nixon's wage and price control debacle. Starting in 1972, I used that nest egg to start buying beach duplexes in the San Diego area. Interestingly enough, I never used the GI Bill (VA) to buy a property -all the beach stuff I was interested in did not 'qualify'.
'LivinMyDream' mentioned the primo spots Navy pilots might find themselves. All pretty good places to own something, in my view. My advice is to put at LEAST 10% of each paycheck away (Grampa's advice) and start buying something everywhere you go. Buy your house/condo to live in first. It's a good tax break. NEVER sell it when you leave! Become a 'landlord' -and in spite of minor annoyances, when you find yourself my age you will be tap dancing, in spite of 'economic downturns'.
"Location, location, location" is the primary rule of thumb in real estate. I guess it is never too early to think about buying your "retirement land", but my suggestion would be to be an 'investor' and let your capital grow over the years in properties which someone else is paying for. There are also better tax advantages in 'occupied' vs land. Those advantages will help pay for the investment.
Take my word for it, the time just flies between 30 & 60 -and you and your values and 'taste' will change over the years. It is MUCH better to be sitting there with more than adequate bucks in equity to plunk down on that property when you find it closer to your retirement.
Of course, if you find that property that you just have to have, go for it. It will be a LOT more expensive in 30 years.
The short version is GO FOR IT! You will only have regrets if you let the opportunities go by and look back, thinking; "I should have . . . ."
Sorry for the long version. Just an old guy who has BT, DT. And it has worked out REALLY well.
Thank you for your service to our country!
Another thing to consider is that places with large plots of land are probably not the easiest to rent.
It depends on so many factors, but you will probably get new orders every 18-36 months (or thereabouts). Sometimes you may get back-to-back orders in the same location, but you have no way of knowing that in advance so it isn't something you can plan on.
Bottom line is that your plan will probably not work out very well. Better to buy a place that is easily rentable when you leave, and build equity that way, then get your large, secluded piece of property when you retire or separate.
It depends on so many factors, but you will probably get new orders every 18-36 months (or thereabouts). Sometimes you may get back-to-back orders in the same location, but you have no way of knowing that in advance so it isn't something you can plan on.
Bottom line is that your plan will probably not work out very well. Better to buy a place that is easily rentable when you leave, and build equity that way, then get your large, secluded piece of property when you retire or separate.
Guys....you don't rent bare land. Just pointing it out.
I have a similar scenario going. I know where the wife and I want to retire and build our home. As a result, we are actively looking for a pretty good sized hunk of bare land (100+ acres) or a piece with a house that we can add on to or make our own. I understand what you are thinking about.
Two things I would point out. While I applaud your forward thinking, chances are buying your "dream property" to retire on, is probably a little pre-emptive right now. You are at least a couple decades from retirement and there are many things that will tax your financial resources between now and then...housing at your duty station, marriage
D), kids, kids college etc...
Second, often, the sacrifices you have to make now to be as proactive as you are thinking, just aren't worth it. What I'm saying is, that even if you do have the cashflow now to plunk down on a piece of property for the long term, it really isn't worth sacrificing staying in that nice hotel on the beach when you are TAD in Hawaii or not getting in on that squadron watch group buy. (Yes guys...still happening) While its good to plan ahead..."...there's a time to every purpose under heaven."
This is rock-solid advice...Thanks sir.
I have a similar scenario going. I know where the wife and I want to retire and build our home. As a result, we are actively looking for a pretty good sized hunk of bare land (100+ acres) or a piece with a house that we can add on to or make our own. I understand what you are thinking about.
Two things I would point out. While I applaud your forward thinking, chances are buying your "dream property" to retire on, is probably a little pre-emptive right now. You are at least a couple decades from retirement and there are many things that will tax your financial resources between now and then...housing at your duty station, marriage
D), kids, kids college etc...Second, often, the sacrifices you have to make now to be as proactive as you are thinking, just aren't worth it. What I'm saying is, that even if you do have the cashflow now to plunk down on a piece of property for the long term, it really isn't worth sacrificing staying in that nice hotel on the beach when you are TAD in Hawaii or not getting in on that squadron watch group buy. (Yes guys...still happening) While its good to plan ahead..."...there's a time to every purpose under heaven."
This is rock-solid advice...Thanks sir.
So how do some guys go about owning multiple chunks of real estate? That's what I want to know. I mean I understand renting out your property after getting stations somewhere else but how do you convince a bank to let you take out multiple mortgages and all the fuss that comes with owning a lot of land? Or is it really as simple as keep the old house full, but a new house, rinse, repeat?
You need to buy much less than you can afford. That, along with good credit, should mean you don't really have much trouble getting loans, even today. Non-owner occupied loans are slightly more difficult to get (and will be at higher interest rates), though we did it about a year ago and had no problems. However, our first loan (for our residence) was for far less than we were approved for, so we were nowhere near maxed with what banks were comfortable with. Also, if you buy, live in the place, then rent it out and buy another one, I'm not sure you would ever need to get a loan for a non-owner occupied, since each time, you'd be moving in. Someone who has done it that way can probably speak to that.
I think you need to be mindful of this plan every time you buy. If it is important to you to acquire several properties, then you need to be willing to make the sacrifice now by living in less than you can afford and decviding on floor plans and areas that will make for desirable rentals down the road.
It is the latter
It is the latter; pretty simple concepts, once you understand them.
"Leverage"
"Equity"
"Net Worth"
"Income"
"Pyramiding" & "OPM" . .no . .not drugs
"Other People's Money"
"Leverage" - you put a down payment you can afford and 'qualify' for and get a loan you can afford. Face it, a Naval Officer has 'job security' and is a known commodity. As long as you have not screwed up your credit along the way, you will qualify at any bank.
Using round numbers to explain "Leverage":
$20,000 downpayment (20%)
$100,000 purchase price
$80,000 loan (principle goes down with each monthly payment)
You get PCS orders in 24-36 months -and house has (conservatively) appreciated 10% (now worth $110,000)
You 'only' put down $20,000 . .you have 'made' a 50% gain on your money! PLUS you have 'paid down' the loan a little. You have leveraged Other People's Money to get a 50% gain on YOUR money!
That - the original $20,000 + the $10,000 appreciation + the principal paydown is your $30,000+ = "Equity".
In the meantime, you have not been living the typical "high life" of the studly Naval Aviator. No Corvette, no binge partying (like Juan McCain did before crashing into Corpus Bay). You are still putting away a good % of each check, for the next house/investment. (I know this sounds boring to a 20-something, but think of the parable of the 'Grasshopper & the Ant")
So, you go into the bank (mortgage broker) at your next duty station (think Navy Federal or North Island FCU or the local one at the base) NOW, it is a couple years down the road, you have maybe made promotion or getting close, you have a valuable asset with maybe $32,000-33,000 "Equity" AND additional "Income" (rent, which, hopefully comes close to covering actual expenses) in addition to your Government paycheck. You are living within your means and kept your credit rating clean. YOU are a VALUABLE asset to this lender.
He $ee$ someone who will help his bottom line $$$ -and be a long term customer, if he treats you right.
After you have done this a couple of times, funny thing, your "Net Worth" is a LOT higher than your equally ranked/paid peers! There will be NO question when you walk into a lending institution that they will be drooling to do business with you. You are an astute person of 'means' in their eyes. They are in business to do business with YOU!
It is called "Pyramiding" and you are using "Other People's Money" to control growing assets. Of course, you had to start with your own funds and early on you will have to 'augment' -and there are always risks.
Another thing is the favorable tax treatment being a landlord affords you. You get to write off not ONLY your actual 'expenses' -like travel, hotels & meals back to Pensacola (or wherever) for a few days, BUT you also get to write off "depreciation", which is not money out of your pocket, but government's way of encouraging investment.
Somewhere down the road there is another little incentive you can use, called a "1031 Tax Deferred Exchange". Say you find a neat little duplex or 4-plex for $800,000 (http://www.onevirtualtour.com/flyer.php?FlyerID=149605648).
You have a property you have owned for a while which has appreciated substantially and you have $180,000 equity. You make an offer on the $800,000 property 'subject to a Tax Deferred Exchange' of your property with the $190, 000 equity. That would cover a 20% downpayment + expenses on the new property. As long as you take no cash out of the transaction, you have ZERO tax consequences on this. You can just keep pyramiding up until you have 10's of millions in net worth, just like Donald Trump:icon_smil
Ain't American great?!
It is the latter; pretty simple concepts, once you understand them.
"Leverage"
"Equity"
"Net Worth"
"Income"
"Pyramiding" & "OPM" . .no . .not drugs
"Other People's Money""Leverage" - you put a down payment you can afford and 'qualify' for and get a loan you can afford. Face it, a Naval Officer has 'job security' and is a known commodity. As long as you have not screwed up your credit along the way, you will qualify at any bank.
Using round numbers to explain "Leverage":
$20,000 downpayment (20%)
$100,000 purchase price
$80,000 loan (principle goes down with each monthly payment)
You get PCS orders in 24-36 months -and house has (conservatively) appreciated 10% (now worth $110,000)
You 'only' put down $20,000 . .you have 'made' a 50% gain on your money! PLUS you have 'paid down' the loan a little. You have leveraged Other People's Money to get a 50% gain on YOUR money!
That - the original $20,000 + the $10,000 appreciation + the principal paydown is your $30,000+ = "Equity".
In the meantime, you have not been living the typical "high life" of the studly Naval Aviator. No Corvette, no binge partying (like Juan McCain did before crashing into Corpus Bay). You are still putting away a good % of each check, for the next house/investment. (I know this sounds boring to a 20-something, but think of the parable of the 'Grasshopper & the Ant")
So, you go into the bank (mortgage broker) at your next duty station (think Navy Federal or North Island FCU or the local one at the base) NOW, it is a couple years down the road, you have maybe made promotion or getting close, you have a valuable asset with maybe $32,000-33,000 "Equity" AND additional "Income" (rent, which, hopefully comes close to covering actual expenses) in addition to your Government paycheck. You are living within your means and kept your credit rating clean. YOU are a VALUABLE asset to this lender.
He $ee$ someone who will help his bottom line $$$ -and be a long term customer, if he treats you right.
After you have done this a couple of times, funny thing, your "Net Worth" is a LOT higher than your equally ranked/paid peers! There will be NO question when you walk into a lending institution that they will be drooling to do business with you. You are an astute person of 'means' in their eyes. They are in business to do business with YOU!
It is called "Pyramiding" and you are using "Other People's Money" to control growing assets. Of course, you had to start with your own funds and early on you will have to 'augment' -and there are always risks.
Another thing is the favorable tax treatment being a landlord affords you. You get to write off not ONLY your actual 'expenses' -like travel, hotels & meals back to Pensacola (or wherever) for a few days, BUT you also get to write off "depreciation", which is not money out of your pocket, but government's way of encouraging investment.
Somewhere down the road there is another little incentive you can use, called a "1031 Tax Deferred Exchange". Say you find a neat little duplex or 4-plex for $800,000 (http://www.onevirtualtour.com/flyer.php?FlyerID=149605648).
You have a property you have owned for a while which has appreciated substantially and you have $180,000 equity. You make an offer on the $800,000 property 'subject to a Tax Deferred Exchange' of your property with the $190, 000 equity. That would cover a 20% downpayment + expenses on the new property. As long as you take no cash out of the transaction, you have ZERO tax consequences on this. You can just keep pyramiding up until you have 10's of millions in net worth, just like Donald Trump:icon_smil
Ain't American great?!
If you ever come down south and you want to buy a large plot of land you can rent it out as hunting land if it's good hunting land.
Thanks captain_drewski. That was a great explanation and really useful to hear. I think my main thing though has always been that 20% down payment. It would empty all my non retirement investments to make about that. I know less is doable but not as useful. I just keep wondering how would I be able to do it again 3 years later. Or is it really as simple as put the money into savings/mutual funds and take it out for the down payment?
Yeah you can tell I'm new when it comes to real estate and am hesitant to empty my savings and investments for a down payment...
Yeah you can tell I'm new when it comes to real estate and am hesitant to empty my savings and investments for a down payment...
ACTUALLY . . I didn't originally want to go there . . but if you have a large tract of really 'discrete', remote land, you could long-term lease it out to a polygamist sect or terrorist trainees.
Make sure to get several years rent in advance . . and then turn them into the FBI and Homeland Security. Then . .repeat. . . . often.
It would be a hellava revenue generator . . and you would be serving your country in an alternate way.
