When your PCS orders come in, the first thing many military think about is where they are going to live. This means that one of the first questions that has to be answered is whether to buy a home or rent. The standard advice given to civilians is to decide if you’re going to live in an area for more than five years, and if so, buy a house. Unfortunately, no one in the military gets to decide or even knows if they’ll live in an area for that long.
Instead, it makes sense for military families to consider the following questions before deciding whether to buy or rent.
- 1. How much is housing? In many areas, renting can be significantly more expensive than paying a mortgage. Around Cannon AFB, for example, a shortage of rental housing due to a recent base expansion has caused rental prices to jump by hundreds of dollars in the past several years. Around NS Mayport, the recent housing crash has caused prices for homes to drop sharply while demand for rental housing has increased due to a high number of foreclosures and short sales in the area. Even if you’re fairly certain which option you want to go with, it makes sense to check out prices for both rentals and house purchasing.
- 2. Is this an area I would ever want to come back to? It’s impossible to know when you will move again, but consider if you would try to volunteer for another assignment at the base you’re going to. If you’re near the end of your career, think about whether you would want to retire in the area. If you don’t see yourself ever wanting to go back, it probably makes more sense to rent. When you leave, you’ll have nothing tying you to the area. On the other hand, if you think you might come back, buying can make a lot of sense. Purchase a home to live in for a few years, then rent it out while you go to another base. When you move back, you’ll already have a home.
- 3. Would the home I’m thinking about buying make a good rental property? Of course, if you’re planning on renting out the property (or even if it is a possibility), you have to consider if it will be appealing to renters. Start by comparing the price you could rent the home for to your monthly carrying costs. Ideally, break even on renting out the home, or at least don’t lose so much that your financial security will be in danger. Next, think about how a renter would do in the home. Avoid properties that are too far from base, have major and/or ongoing maintenance problems, or properties that are hard to care for.
- 4. Do I have the resources and time to take care of a home? If your upcoming assignment comes with long hours and/or a long deployment, it may not make sense to buy a house. Think about who will care the house while you’re away. If you have no family or close friends in the area, renting might be the better option.
Deciding whether to buy or rent a house is a major decision, so it makes sense to take time. Do not hesitate to call realtors in the area and ask for their opinion. Many realtors are familiar with their markets, and can give you a good idea of its condition.