Should I buy a house with cash and save the rent money?

I like your plan and from the surface it might appear very viable.Are you speaking of the Military housing allowance you would be saving?

With the housing situation as it is today, I have reservations about it recovering in a 3 year period of time so you would be able to recoup the amount you paid.

Since you would be near a military base your investment might become a rental once you leave for another station on the main land or to an overseas assignment. You could afford a property manager to manage the place for you.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

Well technically speaking, that 75K you are saving up may or may not be worth 75K three years from now. First off, what are you going to be doing with that extra rent money? If you're going to spend it, then you will have an increased standard of living of about 25K a year. However, if you save it at a particular interest rate (ignoring inflation), it could be worth more than that. Let's say it's 10% that you can invest the money at. Over time, you can end up having over 87,000, presuming that the money you save will be accrued over the time in which you will not be paying rent (at about $2,083 per month, according to your 75K figure), and that you will instead be reinvesting all of that cash into a fund of some sort that earns an average 10% return per year.

As far as the housing market goes, many markets will see a slow but steady increase in activity after a major recession. I doubt your home will lose any value (barring extreme circumstances and assuming you maintain your home in good condition). Honestly, being able to buy a house outright now and then putting away the rent money into a savings fund is always a better option than having to pay some guy rent.

Edit to additional details: CDs I would not recommend. They tie up your cash and don't give you a good enough return to justify it. If you have a well-balanced portfolio with an investment fund, you're more likely to earn a better rate of return. Don't go throwing the money into volatile markets and the like. Look for funds that earn respectable returns and don't have the "roller coaster" going on (that is, that their annual performance is particularly marked by large ups and downs).

I don't know what the laws are in Hawaii- but in Texas a disabled veteran pays a lower property tax- but they still pay property tax. They call it an exemption here because you are exempted from part of the tax. Be sure you understand the law on that there.

Most people decide not to buy if they will be selling in less than five years because it may take that long to break even from closing costs and market ups and downs. I think I would also agree with that. Renting is not a great financial idea but it does give you the ability to move and not worry about sales prices.

A house (even small) can cost about $300K easily.

Also when you buy keep in mind that you will have to pay legal fees to a lawyer to do title searches, etc. Did not know military people did not pay property taxes (now I know).

You might also have to pay a realtor to help you sell the home.

Realtor commissions are about 6%.

You might also be stuck not being able to sell the house.

And as a home owner if anything goes wrong with a home you need to pay for repairs.

Bad plumbling, caved in roof, termites, bad foundation.

You will also have to pay for home insurance (including earthquake and flooding).

I conclusion: For three years - I would just rent and live problem free.

Invest the money in cd's or in the stock market..