Should Military Families and Active Duty Members Buy a House or Rent

Should Military Families and Active Duty Members Buy a House or Rent

          There is a great debate among active duty military regarding renting vs,buying a home. Because these military members may be called upon to deploy or change duty stations at any moment, numerous active duty families choose to rent. Still, others have determined that despite an unpredictable lifestyle, it is better to invest in real estate by purchasing a family home.

        The decision whether to buy or rent a home following what is called a Permanent Change of Station (PCS) move is highly personal, and numerous factors play into the decision. These factors include financial and career based decisions as well as practical and emotional concerns.

Financial and Career Consideration:

If you are a military family with PCS orders, consider the following before making the decision to rent or buy your next home:

1. Cost and Monthly Payments:

         An obvious consideration for most families will be the cost to rent versus the cost of a monthly mortgage. If your family is moving to a part of the country in which this has occurred, and you have determined that a monthly mortgage will be cheaper than the cost to rent, the temptation to buy may win out. But before you start visiting open houses.

2. Market Consideration and Pricing:

        Home buyers must consider numerous factors in addition to the mortgage and down payment, such as the price of the home versus the average price within the local area, the rate of foreclosure, and health of the local market. Other factors to take into account include real estate taxes, home ownership association fees, and the cost of insurance, all of which will increase the monthly cost of your home.

3. Tax Benefits:

         Don’t forget that when you own a home, you get to deduct the mortgage interest you pay on your loan from your taxes. This effectively decreases your monthly home expenses (which include mortgage payment, real estate taxes, home owner’s insurance, and any association fees) and should be taken into account to determine the true cost of home ownership.

4. Ability to Rent or Sell the Property:

         Let’s be honest. Most military families are not typically stationed in one location for their entire career. Because of this, they need the ability to move on without substantial, or ideally any, investment loss. Therefore, it is important that a purchased home be one that is very marketable. A home can be marketable for the purposes of selling or renting.

5. Military Home Loan Eligibility:

       If you choose to finance your home using the Department of Military, be aware of eligibility requirements and how they may impact a future relocation. Military loans are only permissible for the purchase of your family’s primary residence. Moreover, if you move away from your primary residence without selling it, you will be restricted from using another Military Loan for a subsequent home purchase until the first mortgage is paid off.

6. Expected Time in Current Duty Station:

       If you know beforehand that you won’t spend long in your current duty station, you should have a compelling reason to buy instead of rent. Most importantly, are you willing to hold onto the property as a rental after you move? These days, it can take many months, even years, to sell a home.