I had a guy call me about a rental 2 weeks ago. I found out he was going to be stationed in Charleston for 4 years at the Naval Weapons Station. So I broached the buying subject. He could actually buy for less than what his BAH allowance would be. He said, no, no, no. Then I explained how he could use the government's money to pay down his mortgage over 4 years and what they payoff would look like after 4 years of "paying rent." Then I explained appreciation over 4 years at a conservative 2 percent. He still said, no, no, no. I said okay, I'll show you the rental property. In 30 minutes, he called me back and said, my wife said she wants to buy a house. So he went to meet my lender, got approved with flying colors and off we went. Wife came up the next day and in 4 days, we saw what was available in his price range and had a ratified contract. They are sooo excited that they are about to buy their first home and for less than what they expected and less than what they are given in their housing allowance.
In our business we have to be numbers people and be able to explain these 2 very important factors to renters. In fact, the primary role I see myself is as an educator. For those that will be stationary for 3 plus years, I think buying conservatively should be an option for folks to let their money start working for them. I heard a statistic that 40% of American gained their wealth through the sale of their primary home in 2005. That's amazing. Sure those where different numbers where appreciation was 10 plus percent a year, but over any given 10 year period in Charleston, we have averaged 10 percent or more! Real Estate is still a great investment over a long period of time. My CFP says that his real estate agent clients tend to invest 90% of their portfolio in real estate. 10% return is a pretty common number over a long period of time and unlike the stock market whose roller coaster is daily, it's good to know on real estate that you can always pay that baby down (or let someone else pay it as I have). Sure it's not as liquid, but long term investments aren't suppose to be. That's another story.
I think it's important to count the costs. There are still many affordable homes in the Charleston SC real estate market. And buyers who are given the right direction can be converted. Any other success stories??
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