PCS Ahead: Should We Rent or Buy?
PCS stress tops the list of military families’ most unavoidable situations. Adding the decision of whether to rent or buy a home makes the transition that much more difficult. Finances, emotions, and geography are just a few of the factors that go into making the choice. Couples need open communication as to what their long and short term goals are, so they can commit to a plan that accommodates those goals.
Here are a few rent or buy scenarios that may help you produce a solid answer for future real estate plans:
Should We Rent?
Despite advance research attempts, maybe you’re unconvinced the area you’ve initially chosen is a perfect fit. With a rental agreement, the comfort of knowing there is an end date in sight can be something to look forward to if an unavoidable situation like unruly neighbors occurs.
Renting could be more affordable, especially if living on the installation. There’s a strong possibility living there will save money or at least dictate a reliable cost of living. Due to the ease of maintenance and higher security, on-post living also allows the stay-behind spouse to make a decision whether or not to stay if the military member deploys for lengthy amounts of time.
If finding a quality school for children is not a priority, it’s likely that a rental can be found for under BAH rates, offering the option to put away money for a potential down payment for a home in the future.
Rentals are perfect for short-term duty stations such as 18 months of military schooling. Often, school affords the service member a less stressful and predictable schedule which could provide the opportunity to travel and explore the region you’ll live in temporarily without the restraints of homeownership.
What About Buying a Home?
Military homeowners should be comfortable with becoming landlords. A PCS can be unexpected with a short turn around. Families who do not want to separate or cannot quickly sell their home will need to hire a property manager or become familiar with what needs to be done to turn the house into a profitable rental.
In many cases, purchasing a house is a sound investment in the present and for the future. But, buying a home is expensive, even if you aren’t required to have a down payment through a VA loan. About 5-10% of the house’s purchase price is recommended to have on hand to cover closing costs and other related payments, like home inspections and VA funding fees.
Rented for a while? Then your family probably knows the area and is ready to commit to the local amenities and school options. Knowing friends, neighbors, and enjoying the routine of daily life is a huge benefit to buying a home without major uncertainties due to location.
A plan needs to be in place for the spouse who remains behind during deployments. Who will handle home repairs and take care of lawn and snow maintenance? Extra money may need to be set aside to accommodate these services. Maintaining a home, especially an older one, requires a lot of upkeep that will become an added burden to the parent who is already running the everyday needs of the family.
Other personal factors such as pets and commute times will also become points of discussion for you and your spouse when trying to determine if homeownership is doable. Continuing to whittle down what exactly is important to you both will lead to a solid rent or buy decision.
By Dawn Smith for MilitarybyOwner
