My Worst Money Mistake (and How I’m Never Repeating It!)

Why I Will Never Buy a House Again

As with many money mistakes, it seemed like such a good idea at the time. We had PCSed to Virginia and living in on-post housing wasn’t an option.  We soon realized that the real estate market in our desired neighborhood with great schools was totally crazy. Worried Couple Holding For Sale SignRents were sky high, above our BAH (Basic Allowance for Housing). We did some calculations and realized a monthly mortgage payment would be lower than rent. And with a VA guaranteed home loan we wouldn’t even have to put down any money.

So we took the plunge and bought a house.

Oh. My. Gosh.  What a mistake.

First of all, the house was the proverbial money pit.  Even though I knew we were only going to be there for a few years, it was easy to convince ourselves that we simply couldn’t live with hunter green carpet, hunter green wallpaper with geese and chipped hunter green Formica kitchen countertops.  We did the painting and wallpaper removal ourselves, but my husband, while a great guy, does not have the skills or the time to install countertops, so we paid a contractor to do it.

We also had to pay for quite a bit of normal wear and tear on the house. Roof shingles needed replacing. The deck needed repairing. The sliding glass door broke and we had to buy a new one.

Then 2½ years later as our time to PCS drew near, we made the discovery that the real estate market, which was supposedly stable and on the rebound in our area had actually dropped a little.  A 10% drop in home value doesn’t sound too huge, but when you’re only paying the interest on your mortgage and haven’t built up any equity, that change in value makes a big difference. Not only would we not make any money on the sale of our home, we would have to take money out of our dwindling savings account to pay closing costs and Realtor fees.

Reluctantly, we made the decision to rent our house. It just didn’t make sense to do anything else. I did some research on the topic of becoming a landlord and since our orders were for Germany, we decided to hire a professional property manager. We were going to be 4,000-plus miles away and definitely couldn’t be involved in the day-to-day details of our real estate albatross.

Oh. My. Gosh. What a headache.

We have had our “professional” (notice the quotes) property manager forget to pay invoices and utility bills. We had a refrigerator break and had to replace it 2 DAYS before a new home warranty policy took effect. We ended up acting as the middle man between our tenant and the property manager instead of the other way around.

For the first time in years, we had to pay someone to help us do our taxes since I found the word “depreciation” to be particularly scary when taken in conjunction with the possibility of the word “audit.”

And lest you think that we are now real estate moguls living high on the hog, reaping profits from our “investment” (notice the quotes), after we pay our property manager his 10% cut, we barely cover our mortgage. And on the months when we have to pay for termite inspections, sprinkler repairs and new refrigerators, we definitely lose money.

We’ll try again to sell our house in 2 years, when we PCS back to the states after living overseas. We are crossing our fingers that the market will have rebounded enough to allow us to sell without going into debt.

But I think we have finally learned a lesson. A difficult, painful lesson.

I’m never buying a house again.**

**At least while we’re on active duty.

What are your experiences with homeownership as a military family? 

1 COMMENT

  1. Buying our first home was also THE BIGGEST mistake my husband & I have made throughout our 20 year marriage.
    1. Do not buy a home If there’s a chance you could PCS

    2. Buy less than you can afford so that you can keep a few mortgage payments in savings just in case.

    3. I will also never buy another house while my husband is active duty.

    It was 1995 and we were paying more for our tiny townhouse near Hurlburt Field than his Housing allowance. Friends were having new homes built in what was then the tiny beach town of Navarre, FL. We realized a brand new 3 BR 2 bath 1600sqft home would cost nearly the same as our apartment and the rent was going up! Everyone said he would be stationed here for at least 10 years. We purchased our first, newly constructed, beautiful home in July 1996. 3 years later, he had to PCS to Dover AFB and I was trying to sell our home alone with an 18 month old baby! The market was flooded with new homes..in addition, our contractor was making headlines for bad construction and facing multiple class action lawsuits. Our home was fine, but with only 3 years equity, we would have to pay a real estate agent $6,000 out of pocket. After doing all my research I tried to sell by owner. We could not afford the overhead to rent the house. After 9 months apart, we decided to leave the home with an agent & Moved to Dover together. We left the home in perfect condition, but the carpets were trashed by the agents showing the home. We had to use our BAH for base housing in Dover so paying the mortgage wiped out our savings. Trying to avoid foreclosure, we used advances on our credit cards. We finally had to resort to a quick sale. Our beautiful home sold for 10,000 less than we paid for it and we had no savings and huge credit card debt from mortgage payments. Although we were told that a quick sale would not hurt our credit… It wasn’t true. Every time we had a credit check for 7 -9 years, it wrecked us. We didn’t buy another home until 2007. I also regret that decision because it’s too small for our family and the location isn’t great. It needs all kinds of repairs & renovations and we can’t afford to do the updates we initially planned. I wish we had rented so we could have more flexibility. I live in fear that we will have to move the next time he makes rank (after 8 years of living in the house) even after 8 years, we’d barely break even if we sold the house.

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