In the military, we are faced with the same dilemma every few years: should I buy or rent a home in my new location? While I can not make that decision for you, I have put together a few questions to ask yourself to help you decide.
- What are your future financial plans? Have you considered using real estate to build wealth?
- Is this a place you would like to come back to after you retire?
- How is the housing market in your new location? What kind of house can you afford with your budget?
What if, at your new location….
- Rent for off-post housing is very high: In some areas, living on post is a much better option than to buy or rent off post/base. You might just want to wait until you have to move again to consider buying a house. In the meantime, you can save up more money, pay down debt, improve your credit score, and work on other financial goals.
- Rent is very high, but a mortgage payment is doable and reasonable: Are you staying at your current duty station for at least 3 years? Are you able to get a great deal on a house that can cash flow very nicely as a future rental? Is the housing market good in case you need to sell later? Then I would Go For It! Buy a house!
- You can rent off-post for less than living on post: If you are not sure that you are staying for more than 2 years, then rent a home for less than your BAH and set aside the extra housing allowance for a down payment on a house during your next assignment.
It all comes down to cash flow! Utilize your BAH to your benefit. I highly encourage you to find housing less than your allowance and then set aside extra funds to invest in a home purchase that can lead to rental property. This creates a second stream of income that is passive.
Sometimes it is wise to rent for awhile to set yourself up for the best possible financial scenario for a home purchase. Use wisdom and don’t hesitate to consult with a local Realtor® to help you make smart choices.
Are you moving to the Colorado Springs area? I am part of a military family and understand the particular nuances of PCSing. I would be honored to help you and your family make your transition to our area. Contact me at firstname.lastname@example.org.
Interested in having my complete PCS Guide? Pop me an email and I will be happy to send you my free guide!