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A Moving Predicament

Casey Campbell

EVERY TIME I HEAR the sage advice to pay off a mortgage before retirement, I wince. Not only will I have a mortgage in retirement, but also I won’t even make my first payment until after I retire—just as my salary plummets to zero.

I hate going against the conventional wisdom. But I really have no choice. As an active duty military officer who, for the past 20-plus years, has had to move every few years, it’s been difficult to build home equity. The upshot: Our family of seven will be starting from scratch—at least in the housing department—when I retire in a few years at age 51.

Back when I was in dental school and periodontics residency, my wife worked fulltime at a bioenvironmental firm in San Antonio earning $32,000 a year. That was just enough for us to buy a starter home in 2002 for $94,000. We sold it four years later for $120,000 and thought we’d struck gold. At my first military assignment in Colorado Springs, Colorado, we purchased home No. 2 in 2006 for $140,000, giving no thought to the fact that we’d likely be moving again just a few years later.

I hadn’t yet heard the recommendation to avoid buying a home unless you can see staying put for at least five-to-seven years, and preferably longer. Our departure from Colorado in 2008, during the housing market crash, meant bringing money to the closing when we sold our home. As a junior Air Force officer, the $25,000 check I had to write was devastating. Although my wife and I could have hung on to the house and rented it out, the idea of becoming long-distance landlords wasn’t an attractive one.

We assumed we couldn’t possibly be unlucky twice in a row, so we purchased our third home in 2009 for $225,000 at my next Air Force job in Texas. But four years later, I was again writing a check at closing—this time for $12,000—because we were selling for less than we’d bought. On my relatively low salary as a military periodontist, twice shelling out that kind of money was unwelcome and stressful, especially when combined with our student loans, two car payments and variable universal life insurance premiums—all rookie mistakes and stories for another day.

Those expenses, in turn, caused us unwisely to delay investing in the federal government’s Thrift Savings Plan and in our IRAs.  I swore I’d never buy a home again until I was out of the Air Force. We’ve stuck with that plan, for better or worse.

When I received orders for my next assignment in Albuquerque, there weren’t many suitable homes available for rent, so I wrote letters to the owners of homes I admired on Realtor.com, stating that—although I couldn’t afford to buy their home—I’d be glad to rent it for two years. A number of folks wrote back, enthusiastic to take me up on my offer, so we rented in New Mexico for two years. That was followed by another home rental for one year in Montgomery, Alabama.

Next, we had the pleasure of moving to Italy, where we rented for one short year in Aviano, not too far from Venice, before I received orders to head to South Korea, where we lived in a home on Osan Air Base. Now, we’re finishing a four-year lease on a home in the Washington, D.C., area, and preparing to move back to San Antonio. There, we plan once again to rent for four years, before I’ll pull the plug and retire after 24 years of active duty.

If you’re doing the math, the numbers are:  nine homes (three owned, six rented), three continents, two foreign countries and… home equity of exactly zero dollars. Perhaps unsurprisingly, this is not unique for those of us who move every few years, although I’ve known many military colleagues who have taken the opposite approach. Not only do they purchase a home at every new location, but also they keep each one and maintain an inventory of real estate as long-distance landlords. They’re probably smarter and more financially savvy than I am for doing it that way. There’s a part of me that’s a bit jealous and regretful that I never followed that strategy, but I just don’t have the stomach for it.

To make up for our lack of home equity, my wife and I have taken the approach of living far below our means—a difficult task in a family like ours with five children—and pouring roughly 40% to 50% of my income into our investments. We have a fairly simple three index-fund portfolio, with a total U.S. stock market fund, a total international stock fund and a total U.S. bond market fund. We also have 529 college-savings plans, which are similarly invested.

Between our investments, my military pension and our eventual Social Security benefits, we should have enough to pay for the kids’ college and our other expenses. The Post-9/11 G.I. Bill and Texas’s Hazlewood Act will cover two kids’ college, plus my oldest received a full-ride scholarship. That means our 529s will only need to cover two of our five kids.

While my projections suggest we’ll be on solid financial ground when I retire, there remains that frustrating future expense—our looming home purchase. Sure, we could be lifelong renters. But like most Americans, we dream of finally owning a home that’s truly ours for the long term. Even the three homes we’ve owned never quite felt like our own because we always knew we’d be moving soon, so we never took the time to update, remodel or make them uniquely ours.

By the time I retire, we’ll have about $100,000 set aside for a house down payment, although part of me is enamored with the idea of paying for the home in its entirety, despite the huge tax bill that a large withdrawal from our taxable brokerage account would trigger. Will we go that route? It’s something I need to look into.

When does it make sense to buy a home? Offer your thoughts in HumbleDollar’s Voices section.

Casey Campbell is an active duty military periodontist and a homeschooling father of five. He and his family currently live in Northern Virginia. The views expressed in this article are those of the author and shouldn’t be construed as official or as reflecting the views of the U.S. Air Force or Department of Defense.

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