Should Military Members Rent or Buy Their Next Home?

After being in the military for almost 15 years, my wife and I have seen almost everything in the form of housing. We’ve lived on bases and off post. We’ve been homeowners and have rented homes.

Each choice has many advantages and disadvantages, whether you and your family are living on post, buying a home, or renting a house. No one choice is right for every family.

You may find that different choices are right at different points in your life and career. You also may find yourself backed into a corner, having to choose one housing option over another.

Buy, Rent, or Live on Base for Your Next Home?

Here are a few things to consider about each choice, including living on base or deciding to rent or buy. We’ve included both the good and the bad aspects of each decision.

Buying a House

Buying a home is still part of the American dream. It allows you to build equity, provides you with tax deductions, and gives you a more predictable housing payment.

But buying a house is tricky for members of the military and their families.

Pros

Equity: Even with higher interest rates, housing prices are still rising nationwide. Purchasing a home is a great way to build equity over time.

Tax benefits: One of the biggest advantages of owning a home is the tax benefits. For most people, mortgage interest and property tax deductions are an excellent way to reduce their taxable income as long as they itemize their taxes.

Your mortgage could be less than rent: In some parts of the country, you may find that you can purchase a home and have a lower mortgage payment than what you’d pay for rent.

Income potential: Not only does owning a home allow you to borrow against it if necessary, but it can also help you generate income if you decide to rent it out after a PCS. The rental income you earn could become a great source of passive income.

Sense of belonging: Owning a house gives you a sense of belonging in the neighborhood. You establish roots in the community. Renters have a feeling of belonging but not like a homeowner.

Cons

Buying and selling is difficult: It’s rough for a member of the military to buy a home and sell it during a duty assignment. In many cases, staying in one place for an average of three years isn’t very conducive to owning a home, especially if you have to sell the home when it’s time to PCS instead of renting it to a tenant.

The cost of ownership could be higher: When you factor in homeowners association fees, taxes, and maintenance, owning a home can cost you more, even if your mortgage payment is less than what rent would be.

Monthly costs can fluctuate: As a renter, you know exactly how much your monthly rent payment will be. As a homeowner, your monthly costs can fluctuate significantly. You might only need to worry about your mortgage payment one month, but the next month, you might be paying an electrician and handyman to fix an issue. Your costs can be unpredictable as a homeowner.

You could lose money: Even though homes have appreciated significantly in recent years, the average annual appreciation rate is only 2%- 3%. If you’re buying and selling every few years, making money could be difficult considering you’ll need to recoup the closing costs and realtor fees you’ll incur as a seller.

Your home could sit on the market: If you’re in a position where you need to recoup the seller fees, you might end up listing your home too high. If the comparables in the neighborhood don’t justify your listing price, the home could sit on the market.

Buying and selling can add extra stress for a servicemember: Buying and selling a home can each take months, which can be tricky for a military member who has orders to report on a specific day to his or her next duty station.

Renting a House

Members of the military are pros at renting homes around bases in America. After years of renting, many know the tradeoffs involved with being renters.

Pros

Fewer costs: Unlike owning a home, renting has few costs. Beyond your monthly rent payment, security deposit, and utilities, your landlord is responsible for most other expenses related to the home.

A larger selection of homes: Renting a home also gives you a greater choice of homes or apartments that suit your needs in the neighborhood you want. Renting provides you with flexibility and the ability to pick the community that you would be happiest living in with your family.

Monthly costs are predictable: When renting, you know exactly your monthly expenses. If your landlord decides to increase your rent, you’ll receive notice ahead of time so you can plan accordingly.

Cons

Renting means you’re not building wealth: One of the most significant downsides to renting is that you have no ownership in the home. Your rent payments simply go to help another person pay off their mortgage.

After you’re done renting, you don’t have any equity in the home that you’ve been paying for years to rent.

You need to deal with property managers and landlords: Another downside that I personally hate is dealing with landlords and property managers. It never fails. I always find property managers who must typically deal with deadbeat tenants who don’t pay their rent on time.

I always feel that those property managers treat me with so much disdain and contempt. They always seem to be on the homeowner’s side in any dispute. The property manager typically only considers any issues I raise or requests I make with a healthy dose of skepticism and immediate distrust.

Limited changes can be made: I also hate the limited number of changes you can make to a rental house. My wife and I were forced to sign a very strict lease at our current duty assignment. The lease limits what we can do in the yard, our ability to paint the walls, and other updates, so we must first seek permission.

You might be forced to move during your tour: If your landlord decides to sell the home, you could be forced to find a new one during your tour.

Reverse Military Clauses: These are becoming increasingly popular with military landlords. If the landlord returns to the area for a tour, you could be forced to leave the home even if your lease hasn’t expired.

Living on Base

When it’s time to move to another duty assignment, living on base is one of the biggest points of contention between my wife and me. There are so many tradeoffs that families have to make when living on the base.

Pros

Short commute: For the past seven years, I’ve had a 45-minute commute to work. My wife didn’t care about my miserable commute. She only cared, rightly so, about good schools for our children.

I loved living on post, where my commute was five minutes or less. Just think of all the savings on gas and time in the morning spent with your family when your commute is the same time it takes to listen to a single song on the radio.

Similar community: Living on the base provides you with an incredible community in the neighborhood. Everyone is typically the same rank as you are, in the same units, has the same aged kids, and a lot of similarities built right into the neighborhood.

You usually can’t find that in civilian neighborhoods, especially in such a concentration as on post.

Close to amenities: Living on post also helps keep you close to childcare, medical facilities, shopping, and other amenities.

Cons

Reduced value: In my opinion, the homes on bases are typically not worth your housing allowance. Even the new privatized houses on bases often cannot compete with the rental prices of similar homes in areas off base.

For example, I currently pay $1,650 for a 2,486 square foot, four bedroom, two and a half bath home about 15 minutes from the base. The only comparable home on the base is 2,270 square feet, and the privatized housing office would take my entire basic allowance for housing (BAH) of $2,061 for the privilege to live on post. The math of living on post simply doesn’t add up in many cases.

Housing might not be available: You may find that housing isn’t always available. After years of a 45-minute commute, I was adamant about wanting to live on base at my next assignment.

However, I sat on the waiting list for three months prior to PCSing before the housing office told me that there wouldn’t be a home available before we arrived at my next assignment.

Poor schools: Many service members choose not to live on the base because of the poorly rated schools. It’s also common for bases to not have schools at all, and parents are forced to bus their children into the community.

And, like homes and businesses right outside the gate of a military base, the schools are not always the best immediately outside of a military base’s gates.

The Bottom Line

It’s a tough choice to find housing in the military. It’s a constant struggle with tradeoffs. What will you and your family give up to live on the base? What are you willing to give up to be a homeowner or to live in an incredible school district?

Will your commute suffer as mine did? Will you spend a 20-year career in the military as a renter and forgo the benefits of homeownership?

There’s no right answer for you and your family’s housing choice. Every family and every assignment is different. You have to make the best decision for you at the time. Sometimes, timing is everything.

Which is your favorite housing choice when moving to a new duty assignment? Did you decide to rent or buy?