Military Buy vs Rent Calculator
Make the right housing decision for your next military move. Use our Military Buy vs Rent calculator to get some objective numbers to help make your choice to buy a home or rent.
Military Information
Enter your military details to auto-fetch BAH rate and base pay
Rent
Buy (VA Loan)
Tax Information
Note: Military base pay is not subject to federal income tax. Only additional taxable income affects capital gains rates.
This affects the calculated capital gains tax rates used in this analysis. The tax bracket values are based on 2025 capital gains tax brackets, pulled on 1-22-2026.
Opportunity Cost
This calculates the potential growth of: (1) the down payment amount, and (2) monthly savings differences between renting vs buying, if invested instead.
Disclaimer: This calculator provides estimates for informational purposes only and is not financial or housing advice. Results are based on assumptions and user inputs and may contain errors. Do not rely on this tool as your sole decision-maker. Consult a qualified real estate, mortgage, tax or financial professional before making any purchase or rental decision.
*Beta Notice: This calculator is currently in beta testing. We are actively refining its logic, assumptions, and usability, and we welcome your feedback to help improve it. If you notice unexpected results or have suggestions, please let us know, using the feedback button.
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Table of Contents
Military Buy vs Rent Calculator: Should You Rent or Buy with a VA Loan?
Deciding whether to buy or rent as an active duty service member is one of the most important financial decisions you’ll make during your career. Frequent PCS moves, fluctuating BAH, deployment timelines, and VA loan eligibility all change the math.
This military buy vs rent calculator helps you compare the true cost of renting versus buying with a VA loan based on your pay grade, duty station, BAH, appreciation assumptions, taxes, and even opportunity cost.
Whether you plan to own for 2 years or 10, this tool shows you the real numbers behind the decision.
What Makes the Military Buy vs Rent Decision Different?
Unlike civilians, service members must consider:
- BAH that adjusts by duty station and dependency status
- PCS cycles that shorten ownership timelines
- VA loan benefits including 0% down and no PMI
- Tax-exempt base pay
- The ability to convert a home into a rental after PCS
This calculator accounts for all of these variables, including:
- VA funding fee
- Capital gains tax considerations
- Opportunity cost of invested savings
- Estimated appreciation
- Selling costs
How to Use the Military Buy vs Rent Calculator
Step 1: Enter Your Military Information
This section pulls your estimated BAH and base pay.
- Select your pay grade
- Choose dependency status
- Enter your duty station (base, city, or zip code)
Your BAH impacts your effective housing cost. Buying below BAH can create a monthly surplus. Renting above BAH increases out-of-pocket cost.
Step 2: Enter Your Rental Details
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Step 3: Enter Your VA Loan Purchase Details
This is where most errors happen.
Important fields:
Home Price
Use realistic local comps, not aspirational numbers.
Down Payment
VA loans allow 0% down. If you plan to put money down, include it accurately.
Interest Rate
Use current VA rates. Small changes here significantly impact results.
VA Funding Fee
First-time use with 0% down is typically 2.15%. Adjust if you qualify for exemption.
Length of Ownership
This is critical. A 3-year hold behaves very differently than 7 years.
Property Tax %
Use your local rate, not a national average.
Home Appreciation %
Be conservative. 2–4% is reasonable long term. Avoid 6–8% unless you fully understand risk.
Selling Costs %
6% is common when factoring agent commissions and transaction costs.
Maintenance %
1% of home value annually is a common planning benchmark.
Step 4: Tax Information
Base pay is not federally taxed. Only additional taxable income affects capital gains.
If you expect significant taxable income outside military pay, enter it here. This determines whether you owe capital gains tax if you sell.
Step 5: Opportunity Cost
This section answers:
“What if I invested the down payment and monthly savings instead?”
If enabled, the calculator assumes:
- Your down payment could earn X% annually
- Any monthly cost difference could be invested
- Investment gains are taxed at your specified rate
This is critical for analytical users who want a full capital allocation comparison.
How to Interpret Your Results
After calculating, focus on:
- Total Net Cost of Renting vs Buying over your ownership period
- Estimated Equity Built
- Projected Net Proceeds After Selling Costs and Taxes
- Break-even timeline
- Impact of opportunity cost
Key Insight:
Short ownership periods amplify transaction costs. Longer ownership periods amplify appreciation and principal paydown.
Common Mistakes When Using a Military Buy vs Rent Calculator
1. Using Unrealistic Appreciation Rates
Home appreciation has an outsized impact on long-term ownership projections. Even a 1–2% increase in assumed annual appreciation dramatically changes projected equity and net proceeds after selling.
For example:
- 3% annual appreciation over 3 years produces modest equity growth
- 6% annual appreciation compounds significantly and can make short ownership appear artificially profitable
National long-term appreciation historically averages closer to 3–4%, but markets move in cycles. Some duty stations experience rapid growth near build-outs or military expansion, while others remain flat for extended periods.
An analytical approach looks like this:
- Run one conservative scenario (2–3% appreciation)
- Run one moderate scenario (3–4%)
- Avoid building your decision on peak-cycle numbers
If buying only “wins” at aggressive appreciation assumptions, that signals higher market risk exposure during your PCS window.
2. Ignoring PCS Timing
Ownership duration is one of the most important variables in the model. Transaction costs, funding fees, and selling expenses are front-loaded. Appreciation and principal paydown compound over time.
Short ownership periods magnify:
- Selling costs (often ~6%)
- Closing costs
- VA funding fee impact
- Market volatility risk
Military careers are not always predictable. Orders change. Deployments shift timelines. Career moves accelerate.
A disciplined approach includes running multiple hold periods:
- Best case timeline (5 years)
- Expected PCS timeline (3 years)
- Early orders scenario (2 years)
If buying only makes sense in the longest timeline, you should clearly understand the downside exposure if plans change.
3. Forgetting Maintenance Costs
Homeownership includes costs that renters never directly see.
The 1% of home value per year maintenance rule is a planning benchmark, not a guarantee. Some years may cost very little. Other years may require:
- HVAC replacement
- Roof repairs
- Plumbing issues
- Exterior work
- Appliance replacement
Additionally, ownership includes:
- Property taxes
- Insurance
- HOA dues
- Utilities that may exceed apartment costs
- Lawn care or pest control
If maintenance is set too low, ownership projections will appear artificially favorable.
An apples-to-apples cost assumption means asking:
“What would I realistically spend per year maintaining this property type in this climate?”
Conservative modeling protects against optimistic bias.
4. Comparing Properties That Aren’t Equivalent
One of the most common distortions in a buy vs rent analysis happens when the properties being compared are not truly comparable.
If you are evaluating the purchase of a 4-bedroom single-family home with a yard and garage, but comparing it to rent for a 2-bedroom apartment with shared amenities, you are no longer making a financial comparison. You are making a lifestyle upgrade decision.
That difference matters because:
- Larger homes have higher utility costs
- Single-family homes typically have higher maintenance expenses
- Property taxes scale with value
- HOA fees may apply
- Insurance premiums differ
- Appreciation potential can vary by property type
An apples-to-apples comparison means aligning as many variables as possible:
What a True Apples-to-Apples Comparison Looks Like
Property Type
- Single-family home vs single-family rental
- Townhome vs townhome rental
- Condo vs condo rental
Size and Layout
- Similar square footage
- Similar number of bedrooms and bathrooms
- Similar garage or parking setup
Location
- Same neighborhood or comparable school district
- Similar commute time to base
- Similar access to amenities
Condition and Age
- Newly built home vs newly renovated rental
- 1980s home vs similar-era rental property
Lifestyle Assumptions
- If you want a yard for your dog, compare against a rental with a yard
- If you value low maintenance, compare against similar low-maintenance housing
If your purchase option represents a material upgrade, that’s fine. Just recognize that the calculator will reflect both financial and lifestyle expansion, not purely investment performance.
A good discipline is to ask:
“If I could rent this exact home instead of buying it, what would the rent likely be?”
If that number is significantly higher than your current rent, then part of the “buying is more expensive” result may simply be because you are upgrading your housing standard.
5. Leaving Rent Increase at 0%
Rent rarely stays flat over multiple years. Even in stable markets, lease renewals typically reflect inflationary pressure.
Setting rent growth to 0%:
- Understates long-term rental cost
- Favors renting in longer-term comparisons
- Ignores compounding
A reasonable assumption is 2–4% annually, depending on local market conditions.
More sophisticated modeling involves:
- Running a flat rent scenario
- Running a 3% annual increase scenario
- Evaluating how sensitive the outcome is to rent inflation
If buying only outperforms when rent rises aggressively, that’s a meaningful insight.
6. Ignoring Opportunity Cost
Capital has alternatives. A down payment invested elsewhere may grow over time. Monthly cost differences can compound if invested consistently.
When opportunity cost is enabled, the model evaluates:
- Growth of the down payment at the assumed return rate
- Investment of monthly savings differences
- Taxation of investment gains
The key variables here are:
- Expected return rate (conservative long-term equity assumptions often fall between 6–8%)
- Investment tax rate
- Behavioral discipline to actually invest the savings
If you would realistically invest surplus funds, this matters. If surplus cash would be consumed by lifestyle spending, the opportunity cost model may overstate the investment alternative.
The analytical question becomes:
“Where does my capital generate the best risk-adjusted return over my expected PCS window?”
Military Buy vs Rent FAQ
It depends on:
- Appreciation in your market
- Entry price and down payment
- Selling costs
- Whether you might convert it into a rental
Not automatically. BAH offsets housing cost, but it does not eliminate market risk or transaction costs.
The goal is not to “use all your BAH.” The goal is to allocate housing dollars efficiently.
This calculator assumes you sell. If you plan to hold as a rental, that requires a separate analysis including:
- Rental income
- Vacancy rate
- Property management
- Depreciation
- Long-term appreciation
Check out our rental specific resources for more guidance: The Military Guide to Real Estate Investing and Growing Your Passive Income.
Short-term ownership exposes you to market volatility. Longer holds reduce this risk statistically, but not guaranteed.
Run conservative scenarios.
The VA loan is a powerful leverage tool because of:
- 0% down
- No PMI
- Competitive rates
However, leverage magnifies both gains and losses. Short timelines require disciplined analysis – talk with our VA loan experts about your specific purchase.