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If you are considering using the Army Advantage Fund of $40,000.00 to buy a home, please call anytime to schedule a free half-hour phone consultation.       

 

HOUSING: KEY FACTORS TO CONSIDER 

When looking for a home off base, it’s easy to see that there are multiple housing options, as well as property investment opportunities.  It can be challenging to decide whether to rent, buy, rent to own, or try joint ownership.  In this decision making process, it is important to take into account the long and short term tax, legal, and financial consequences.  Regardless of the type of housing that you may be interested in, hereare some tips to keep on your radar. 

Have an exit plan.  Before getting into a property, know how and when you want or might need to get out of that arrangement orownership.  I traveled a lot in Europe during college, and the best advice I got was when you arrive at a new city, especially for a day-trip, check the schedule to find out when the last train leaves—before you leave the station.  The same logic applies when getting into housing, plan your exit strategy and timeline, and especially for military members, consider whatit might cost you to change them. When we fail to plan, we plan to fail.    

Take caution before signing.  When it comes to purchase contracts, loan documents, leases, rules and regulations, one size does not fit all. Documents that appear to be forms often require blank terms to be filled in.  How blanks are filled in can drastically affect your rights and finances. The terms of rental leases vary, as do the CC&R’s (Covenants, Conditions & Restrictions) of condo and homeowner associations and apartment and mobile home park rules. Only sign what you’re willing to be bound to, and don’t be afraid to getan attorney’s opinion to find out if what you’re signing actually says what youthink it says, and whether it is in your best interests. 

Do your homework.  A certain apartment might not be worth dealing with a difficult landlord. Talk to former or other current tenants to get their opinion.  Check court records to see if the landlord takes tenants to court or gets sued by their tenants.  (You can search court records by names at http://dw.courts.wa.gov/) A property, loan program, or discount might not be what it seems in the flier or ad.  You’re generally held to know what you could have found out about a property, regardless of what a seller discloses.  So, get good general and specialty inspectors to do that work for you—it’s an upfront cost that can save you in the end. 

Consult your tax advisor.  There are many tax benefits to property ownership, whether you own your home or an investment property.  There are also negative consequences if you sell to soon, or don’t live in a property long enough.  Considering the recent housing market crisis, you could also owe taxes on mortgage debt that is forgiven.

 

Again, while hindsight is 20/20 for most everyone, these tips can help you develop better than average foresight when it comes to housing decisions.