Fort Belvoir/Pentagon Housing

Congratulations on your new assignment to Washington, DC. The DC metro area is diverse with lots of activities and housing options to suit everyone. Keep in mind that this is an expensive place to find housing, but your BAH compensates you for the higher costs.

Military personnel working at the Pentagon and Fort Belvoir are dispersed throughout the metro area. Singles and childless couples are more interested in lifestyle and convenience so they choose housing closer to cities. Families with school age kids are interested in school districts, larger housing and outdoor activities so they choose housing further out. You can find almost anything you are looking for within Arlington, Fairfax and Prince William counties in Virginia, Montgomery and Prince George’s counties in Maryland and the District of Columbia. I have a very informative community profile webpage to help you find the suitable communities.

In May 2005, the Base Realignment and Closure Commission’s (BRAC) recommended moving Army and DoD organizations from leased space within the I-95/495 Beltway to either Fort Belvoir in Virginia or Fort Meade in Maryland. Fort Belvoir is expecting a large influx of 5,000 military personnel and 16,000 civilian employees. Construction for new office space, medical facility and Fairfax County R7100 are ongoing. You should check with your command to determine whether your office location will be affected by the BRAC relocation. With so many people relocating to Fort Belvoir and Fort Meade, housing in southern Fairfax and Prince William counties of Virginia and Anne Arundel county of Maryland will be in demand.

Commuting to Pentagon is easy with Metro rail and bus service to the Pentagon. Check the Washington Metropolitan Area Transit Authority for bus and rail coverage in your targeted neighborhoods. One of my tenants in Burke walks five minutes to the Pentagon Express Bus stop for his daily commute, and the extra bonus is that the government offers $230 in monthly transit subsidy. For personnel assigned to Fort Belvoir, you will most likely drive to work so proximity is important. Alexandria, Burke, Fairfax, Lorton, Springfield and Woodbridge are close and popular locations.

For school district information please go to my School Information page.

Once you have selected potential neighborhoods, the next step is to decide on buying vs. renting. Here is the 2010 Washington DC BAH table to determine your monthly housing allowance:

	E-1/4	E-5	E-6	E-7	E-8	E-9	W-1	W-2	W-3	W-4	W-5	O1E	O2E	O3E	O-1	O-2	O-3	O-4	O-5	O-6	O-7
BAH with dependents	1794	1941	2265	2325	2394	2514	2265	2355	2436	2544	2670	2340	2424	2562	1977	2259	2433	2718	2919	2949	2979
BAH w/o dependents	1356	1551	1698	1803	2007	2106	1737	2001	2115	2280	2343	1941	2082	2265	1647	1890	2148	2334	2373	2436	2487

After figuring out your BAH allowance, you should consider how your BAH translates into purchasing power. I have created the following BAH Max Mortgage Calculator to help you determine the equivalent mortgage amount based on estimated monthly BAH, interest rate, mortgage duration, property tax and insurance. With interest rates still in the 5% range, you will be surprised with the purchasing power of your BAH allowance. Right now is a better time to buy because the government is offering $8,000 and $6,000 tax credits for first time and repeat home buyers, respectively. Call me for more details.

BAH Max Mortgage Calculator
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You do not need cash for down payment when using VA loan to buy your home. The 2010 VA loan limits for the DC metro area is $768,750. For Fort Meade, Anne Arundel County, the maximum is $487,500.

If you are willing to make a down payment, then you can increase your buying power even more. Check my Home Search section for available properties in your price range.

Since most military personnel are here for two to three years, you have to think about what to do with your house when it is time to PCS. Will you sell or will you become a landlord? We bought our first home in Burke from a colonel who was leaving the area for retirement in Utah. When we PCSed overseas two years later, we rented our house to a lt. colonel for four years. They were such great tenants that they expanded our backyard by clearing brush and trees. We had such a good rental experience that we decided to target military families for our rental properties.

Many would-be landlords are deterred by horror stories about bad tenants destroying properties and skipping on rent. If you buy in neighborhoods sought after by military families, then you will not have any problem finding a highly reliable tenant to take care of your house.

Looking for higher returns on investments? The pundits would tell you that over the long term, stocks return 2% above real estate’s 4% long term average. What they don’t tell you is that most people finance their real estate buys. So let’s say you put 20% down to buy a $400,000 property. If we use the long term average of 4% annual return and assuming neutral cashflow (rental income equals mortgage payments), your first year’s return with leverage (5 to 1 ratio) is not 4% but 20%. Let me explain with the following figures:

Buy a $400,000 property with 20% down payment of $80,000.
Year 1 appreciation: $400,000 * 4% = $16,000
Year 1 return on investment: $16,000 / $80,000 = 20%

Do you see the effects of leverage? It boosts the 4% returns to 20%. (Your return will vary based on your equity, but generally the lower your down payment the higher the leverage.) Most financial advisors do not want to tell you this fact. When pressed, they simply say that real estate investors are totally committed to real estate and do not invests in stocks. Besides the leverage effect, real estate investors have the additional benefits of saving taxes through depreciation. If the property is cash flow positive (rental income exceeds expenses), your rental income can be partially if not completely sheltered from taxes. Consult you tax advisor for more details.

Are you getting excited about property investing? If you buy now, you get the enjoyment of living in your property until you PCS. Buy at the right price and in the right location, your property will build wealth for you and your loved ones. Call me for details.

Fort Belvoir/Pentagon Housing

Anita G. Mason