Owning a home is often touted as an essential part of the American dream, but in the real world, many families struggle to decide: Should we buy or rent a home? This dilemma is especially challenging for military families. On one hand, Permanent Change of Station (PCS) orders are a fact of military life and often require frequent moves. On the other hand, access to VA loans and their borrower-friendly terms can make purchasing property an attractive prospect and an excellent investment. Every reassignment raises the question of housing. How do you decide what to do?
Should You Buy or Rent a Home?
As AASA notes, the average military family moves three times more often than the average civilian family. With so many moves to make, having a strategy to determine whether you should buy or rent a home at each new posting is smart. To do that, you’ll need to have an understanding of how the potential advantages of buying stack up to renting’s likely benefits. You’ll also want to consider specific factors before making the call.
Buying Versus Renting: How Do They Compare?
The decision to buy or rent is a personal one that depends on your priorities, your resources, and your circumstances. As Military OneSource indicates, both strategies offer certain advantages:
- Buying is an investment that allows you to build equity and capitalize on certain tax breaks.
- Renting generally comes with lower up-front costs than buying.
- Buying delivers the freedom to decorate, remodel, and renovate to suit your own tastes.
- Renting means that most maintenance issues are the responsibility of the landlord.
- Buying provides an opportunity to become a landlord and earn rental income when you move to your next posting.
- Renting eliminates the hassle of having to sell or find tenants when it is time for a PCS.
Important Factors to Consider
What factors should you weigh when trying to determine whether it’s best to buy or rent? MoneyCrashers suggests several things to think about:
- Cost: Cost is an obvious concern. Can you afford to buy a house if you want to? While many believe that renting is cheaper than buying, that’s not always true. In areas where rental housing is in high demand, a monthly mortgage payment might be more affordable than rent. Don’t assume. Research the real estate market in your new location to discover what it is really like. Run the numbers to determine whether buying or renting is a better option for your wallet.
- Livability: Some homes are more desirable than others. Think about the qualities that make a home appealing to you. Do you want a great school district? Is it important to be close to work, stores, and entertainment venues? How much space do you need? Then, look at the housing that matches your preferences. Is buying a home in the area the only way to secure it? Would renting allow you to afford a more livable location?
- Timing: Both buying and selling a home involve certain costs, so experts generally suggest that you should only buy a property if you plan to own it long enough to be worthwhile. If you expect to be in the area for several years or are interested in keeping the house as a rental after you move to your next assignment, buying may make sense. If you only plan to be in the area for a brief time and have no desire to become a landlord, renting may be a better fit.
- The Health of the Local Housing Market: Is the local housing market thriving? If numerous properties are sitting unoccupied, renting might make the most sense. After all, a weak housing market can make it hard to sell or rent out the home after your next PCS.
- Your VA Loan Eligibility: VA loans are a popular choice for military families because they offer such favorable terms. You can have more than one VA loan, but your entitlement does have its limits. If you have already used some or all of your entitlement, take care when deciding whether to use it at this location or a future home.
- Personal Preferences: Do you want to become a homeowner? Does renting seem more comfortable? Do you have friends or family nearby? Are professional obligations likely to bring you back to the area in the future? Could you see yourself living here after you retire? When trying to decide whether to buy or rent, your preferences should be part of the equation.
Whether you’re currently on active duty or a veteran, PrimeLending: Manhattan, Kansas, would be delighted to serve you. We take pride in providing military members and their families with top-notch service. If you’re considering using a VA loan to buy a house, we’ll work diligently to make the process as hassle-free as possible and help you get the maximum benefit from your housing benefits. Contact us today to explore the possibilities.
