PCSing? Rent First, Then Buy

My wife and I just sold our home and relocated 350 miles away from our old home. We made the move so we could live closer to family. We spent a lot of time preparing for the move and are relatively familiar with the area as we visited there several times each year – mainly…
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My wife and I just sold our home and relocated 350 miles away from our old home. We made the move so we could live closer to family. We spent a lot of time preparing for the move and are relatively familiar with the area as we visited there several times each year – mainly for holidays and other family events. Our long term plan is to buy a house, but even though we were pretty familiar with the area, we decided not to buy a house immediately.

Why Renting First is a Good Idea

There are a lot of reasons why renting before buying is a good idea. But basically it boils down to this: unless you are intimately familiar with the area, you probably don’t have enough information to buy a house right away and make the best decision.

How well do you really know the area? My wife and I are  familiar with the area. But we don’t know it intimately. We know the major roads and attractions. But we don’t know the best routes for commuting, the best schools, which neighborhoods have the best resale value, etc. We could do a crash course and attempt to buy a house in a 30 day window, but I would hate to rush to buy a home and make a couple hundred thousand dollar mistake because I was impatient.

How much time do you have to buy a house? We had approximately 30 days to close on our home once we received the offer sheet. 30 days is actually a good amount of time to move, but it’s not enough to coordinate a move and shop for another house 350 miles away. We still needed to coordinate a lot of things back home, such as the house inspection and some repairs, hiring the rental truck, packing, etc. (We did most of this ourselves, since we are no longer in the military and don’t have TMO to coordinate this for us). Trying to find and buy the perfect house in such a short time frame was stress we didn’t want or need.

Do you have time to apply for a loan and close on your house? Closing on a house can often take 30 days, even if you have already applied for your VA Loan. Sometimes the delay doesn’t come from your end either – you may find the perfect house, but the owners need more time to move out, leaving you in a lurch.

Plan on using a VA Loan? Be sure to apply for your get a VA Certificate of Eligibility before applying for VA Loan. Check here for VA Loan Rates.

Do you have to buy? You might think you need to buy a house right away, but shortly after you arrive, you may decide that buying is not the best personal or financial decision for you. Renting first takes away the stress of relocating and gives you the opportunity to make decisions at your own pace, instead of being forced to act for the sake of acting.

If you want to buy, sign a short term rental until you know the area. My wife and I were lucky enough to move in the middle of the slow season for rentals and there were several homes on the market in our budget. We negotiated with our landlord and instead of signing a 12 month lease, we were able to get a 3 month lease with a month to month option. This helps bot h parties – we get a house to use as a home base while we look for a home to buy, and the landlord gets a paying  tenant to occupy the house until the spring, when rentals generally pick up.

Take your time when buying a house

I’m not saying you shouldn’t buy a house. We are planning on buying one within the next few months. But I am recommending you wait a few months until you better understand your needs in the local area. Buying and selling a house is expensive, and it is probably one of the largest single financial decisions you will ever make. Take your time so you don’t make a couple hundred thousand dollar mistake.

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About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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  1. Romeo says

    Ryan,

    I totally agree. I’m actually going through a PCS right now and have decided to rent. Mainly, though, because I want to be able to sell my home in GA before tackling another $100,000 worth of debt. I signed a 12 month lease and am planning on drastically reducing the selling price of my GA home so that I can eventually pick up a home in Charlotte, NC.

    Not only will 12 months give me time to research the area, it will also give me time to research great deals on homes that may be REO.

    Romeo

    • Ryan Guina says

      Romeo, we weren’t in any rush to relocate, so we postponed our move until we could sell our home. We didn’t like the idea of carrying two mortgages either. Thankfully it worked out well for us. But I know a few people who had to relocate for work and decided to carry two mortgages for awhile. Sometimes it worked out well, and other times it didn’t. I know someone who has been paying on an empty home for almost a year and a half (they haven’t been able to rent it out either).

      My wife and I are going to look at REO homes as well, but we won’t limit our search to REO homes. We just want to be able to find a nice house at a good price, which we should be able to do in this market.

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