When Should Active Military Personnel Rent vs. Buy? 3 Things to Consider
Deciding when to take the home-buying plunge can be tough. For military members and their families, the unique nature of their service often adds a new layer of consideration.
On the flip side, many military buyers have access to big-time home-buying benefits, from the no-down payment VA loan to monthly housing allowances and more. Ultimately, the right time to buy is when you’re financially and emotionally ready.
But here are a few key things to consider.
1. Frequent relocation
Active-duty military personnel move frequently, often once every two to three years. Prospective buyers should be comfortable with the idea of turning around and reselling a property or renting it out—and the possibility of neither of those coming to pass.
Talk with real estate agents and other experts to get a feel for the local housing market and near-term trends. You might have no problem selling the home or finding renters in your particular community, but there are no guarantees.
Even if your Permanent Change of Station (PCS) moves you across the country, you’re still on the hook for that new mortgage payment. Short sales and foreclosures can wreck your credit and put home buying out of reach for years. So it’s not a decision to take lightly.
2. Costs of renting vs. buying
Do your homework, and get a clear sense of what’s likely to cost more. Paying a mortgage is still cheaper than renting in many U.S. markets, but every buyer’s situation is different. A good lender can help you get pre-approved and run realistic affordability numbers.
Military buyers using their VA loan benefits won’t typically need to spend years saving for a down payment. VA loans do not require pricey mortgage insurance and feature the lowest average interest rates on the market.
In addition, active-duty military members who receive basic allowance for housing can count it toward qualifying for a home loan. This monthly housing stipend could cover some or all of your monthly housing costs.
But keep in mind home ownership comes with costs that renters don’t typically face, like maintenance, lawn care, appliance repairs, and more. And buying with $0 down means you’ll start life as a homeowner with little to no equity.
3. Wants and needs
Home ownership offers a lot of freedom, but it also comes with significant responsibility. Take stock of your priorities to see where you land. How important is it for you to personalize your space? Do you enjoy home and yard maintenance? How do you feel about paying for them?
Owning a home means you can’t call the landlord to fix a broken pipe or replace the water heater. Renting means you’re building equity for someone else.
In the end, there isn’t a one-size-fits-all answer. Buying a home evokes thoughts of long-term stability that are sometimes at odds with the unpredictability of the military lifestyle.
Still, there’s something to be said for the sense of pride and independence that come along with homeownership. Think long and hard about what’s right for you, and get good information from real estate and mortgage experts you trust.
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