PCS Buy vs Rent

Making the Buy vs. Rent Decision: A Guide for Active Duty Military

When you’re in the military, moving from one location to another is a part of life. With every new assignment comes the important decision: should you buy a home or rent? In this guide, we’ll explore a straightforward approach to help you make the best decision for your unique circumstances.

Timing Considerations

To determine whether you should buy or rent at your next duty station, start by asking yourself two key questions:

1. Do you intend to keep the property as a long-term rental?

   If yes, buying a home might be a wise choice as it can serve as an investment property in the long run.

2. Will you be at the location for at least three years?

   The three-year mark is a good rule of thumb because it allows you to pay down your mortgage and potentially benefit from market appreciation without going underwater on the home.

While staying for longer periods is even better, three years is a good benchmark to ensure your decision makes financial sense. If you plan to leave before three years and the property won’t become a long-term rental, it’s advisable to consider renting.

Key Market Considerations

1. Local Market Conditions:

   Pay attention to the local population. A growing or stable population generally leads to stable or rising housing prices. Conversely, a shrinking population may result in falling home values.

2. Major Employers:

   If you’re in the military, proximity to the base or fort is essential. Consider the growth or decline of major employers in the area, as it can affect your long-term prospects.

3. School Districts:

   The quality of nearby school districts often correlates with home values. Higher-rated schools tend to impact home values positively.

While these are three crucial market considerations, numerous other factors may influence your decision.

Time Frame for Buying

Understanding the time frame for buying is vital. Most military personnel start the process 60 to 120 days before a move. The actual home-buying process typically takes around 30 days from contract to closing. If you have at least 30 days before your move, you’re in good shape. If it’s less, you’ll need to plan accordingly.

Funding Options

When it comes to funding your home purchase, you have two primary options: cash or financing.

1. Buying with Cash:

   If you have the funds, purchasing a home with cash is straightforward and eliminates the need for a mortgage.

2. Financing:

   Financing options include VA loans, conventional loans, FHA loans, and seller financing. For military personnel, VA loans are a standout choice.

VA loans offer significant advantages:

   – 100% financing (no down payment required)

   – No private mortgage insurance (PMI)

   – Competitive interest rates

   – Streamlined refinancing options

There are certain scenarios where a conventional loan may be competitive with a VA loan. It all depends on your circumstances. 

In the buy vs. rent decision-making process, reaching out to professionals who understand the intricacies of VA loans and the real estate market is essential. Your unique circumstances may lead to different conclusions for each move. Remember, the key is to make decisions that align with your long-term financial goals.

Here at WeVett, we’re here to help you navigate the complex world of real estate and financing as a military member. Whether you choose to buy or rent, making informed decisions is crucial for your financial success. Reach out to us if you’d like to talk to a military specialist about your upcoming PCS move.