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Buying a house in Pensacola

V

VTFlyer

Active Member
I know there have been a few posts regarding this in the past (last one was 2011 I believe). I thought I would broach the subject again as I debate buying an investment property in Pensacola. As the economy changes, opinions tend to change too.

I am currently renting in East Hill area of Pensacola, and if anyone has been down here lately they would see how much this area is really increasing its value and desire, although it is still not a completely established neighborhood.

I have found a house here that was completely renovated in 2007. I will be in Pensacola through next summer at least, and then would plan on renting the property. The deal on the house is good, and with the VA loan I could make it happen (my only use of it though). In the long run hopefully equity/rental income from the house would provide the down payment for the next. I am an O-1E (over 8) with no dependents so I know I can manage the finances of the property and afford mortgage payments if I got into a bind.

Looking for any and all opinions!
 
ea6bflyr

ea6bflyr

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Bought in '08 and we still own the property as an income property. We still pay for the flood insurance...around $400/year. The wife wants to ditch the house as soon as the market stabilizes and our renters move out.
 
V

VTFlyer

Active Member
ea6bflyr said:
Bought in '08 and we still own the property as an income property. We still pay for the flood insurance...around $400/year. The wife wants to ditch the house as soon as the market stabilizes and our renters move out.
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Would you buy it again if you had the chance?
 
ea6bflyr

ea6bflyr

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VTFlyer said:
Would you buy it again if you had the chance?
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Yeah, we bought it new and lived in it for 2.5 years...We did enjoy the house but when we PCSd, we could not sell it, so it became an income property by default.
 
zippy

zippy

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VTFlyer said:
Would you buy it again if you had the chance?
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When I got to Pcola, the housing market was still falling so I didn't buy. About a year before I left it started to turn around. I personally would buy there as a long term investment now. Other options exist besides the VA loan for 100% financing which may make more sense for you to use depending on difference in price and where you think you'll be going next (Look at FHA terms as well as NFCU's 100% financing options for example- those may be higher but if the house is cheap it might be worth saving the VA loan for a more expensive location like SD/VB).
 
villanelle

villanelle

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Think about property management fees as well, along with having money in the bank to cover vacancies and unpaid rent, as well as repairs.
 
BusyBee604

BusyBee604

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pilot
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VTFlyer said:
Yeah insurance right now is the big issue that is holding me back. For the current house I'm looking at the annual premium would be ~$3700. A LOT!
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That is A LOT! My leased out $250K home in Mesa, AZ annual premium is only ~$900. Of course no hurricanes, and elevated above any flood exposure. Fire hydrant in my cul de sac. Tornados extremely rare, but T-storms occasionally produce short but destructive winds. Premiums are all about local weather disaster history, proximity of fire emergency services, and home construction materials.;)
BzB
 
zippy

zippy

Freedom!
pilot
Contributor
VTFlyer said:
Yeah insurance right now is the big issue that is holding me back. For the current house I'm looking at the annual premium would be ~$3700. A LOT!
Click to expand...

Do the research on what market rent is for the East Hill area (particularly properties similar to the one in question), as well as take a look at the comps of the sales to come up with a fair purchase price and do the math to figure out if you'll be close to breaking even or not, Keeping in mind that you can depreciate rental properties and write off mortgage interest on your taxes (I'd encourage you to buy a couple books on realestate investing since thats what you're looking to get yourself into, and of course consult some sort of Physcic, Wizard, and Tax Genius to make the whole process pain free). Don't be afraid to low-ball the sellers list price if you feel it's unreasonable and ask for some of the closing costs paid for by the seller. If the #s don't work for this specific property, there are a bunch for sale in Pensacola and Milton that will work out as long term rentals. Do your research (look at forclosures etc as well), and you might find something that fits your wants/needs and financial picture.
 
ea6bflyr

ea6bflyr

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If you really want to do this right, create an S-Corp or LLC, and place the "rental" home under the S-Corp/LLC. You'll get a better tax break on the home and you'll protect your own assets. LegalZoom.com is a cheap way to file the paperwork.....you may also want to talk to an accountant.
 
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