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In this article, you'll learn:
Should I buy or rent a house?
It's one of the top questions military families repeatedly ask themselves during their active duty career. The situation is further complicated by the fact that the answer changes with every new set of PCS orders.
The only accurate statement about military members buying and renting real estate is there is no right answer for everyone. Somewhere between the logic of plain math and the emotional comfort of the person paying the bills lies the solution that best fits each member's needs.
Start with a Rent vs. Buy Calculator
If you're wondering how to begin the process of buying or renting a house, reputable online calculators are a solid way to start price comparisons, since not everyone is a math whiz. These tools can help users determine whether renting or buying makes more sense, given the current circumstances. They use figures such as location, purchase or rent price, and length of stay in the city.
Early in the research process, it can be hard to discern what a member's BAH (Basic Allowance for Housing) and personal finances can afford each month for housing, much less all the details of how to buy a house. Applying an affordability predictor (often found within a Rent vs. Buy Calculator) is a crucial first step to determine if homeownership or rental life is the best solution.
There are many calculators online. It's a good idea to try at least three because each is nuanced. Here are three to begin investigating possibilities:
Although these resources are a good start, they certainly do not replace a real estate professional who is deeply knowledgeable about the area you are moving to. Agents and mortgage lenders track the local housing trends and have a solid education on how the buyer and rental markets typically behave.
Buying a House While in the Military
Most people are familiar with traditional reasons homeownership in America is one of the top financial goals of military and non-military families alike: tax deductions, equity, predictable mortgage payments (unless using an adjustable mortgage loan), the likely increased value over time, and finally, the safety of outright ownership of a home after 15, 20, or 30 years. If a service member's overall financial goals align with real estate, these tried and true homeownership benefits make for a smart investment.
Some buyers overlook certain costs involved with buying a home. Especially for those wondering how to buy a house for the first time, the buying process begins expensively; upfront fees tally well into thousands of dollars. Down payments, closing costs, and various insurance premiums are due before the keys are dropped into your hands.
Later, homeowners encounter property taxes, maintenance and repair investments, HOA fees, and sometimes a decreased home value. These are all out-of-pocket costs for homeowners.
Active-duty military members tend to buy homes less frequently due to the military’s mobile lifestyle, which puts more stress on the rental market. In post-active duty life, however, homeownership among this group greatly increases.
How Military Homebuyers Are Unique
The VA Loan
Compared to the civilian population, military members have unique and cost-effective real estate perks, specifically, access to the VA loan. The U.S. Department of Veterans Affairs reported that, nationally, 416,373 total loans were granted in 2024 by VA lenders.
With zero down payment and zero private mortgage insurance required, the VA Loan is often the front runner as the most affordable loan with the least stringent financial benchmarks, such as credit score. Funding fees are also waived for service members who meet disability requirements.
The VA Loan is an amazing home buyer resource. Read more about your benefits in What Is a VA Loan?
It's hard to ignore the affordability and access of the VA loan. It's traditionally been a significant asset for potential military homebuyers. But, there are drawbacks to consider.
Not every mortgage lender is proficient in working within the constraints of the federal government. There are numerous details, and inexperienced lenders can create problems. Military members considering buying a home for the first time in a region without a prominent military population often find it challenging to find real estate agents and lenders who can work easily on their behalf.
VA loans are, by nature, cumbersome. From inspections to appraisals, homebuyers are often frustrated with the pace of progress. In housing markets where competition is fast-moving, these deterrents sometimes exclude buyers who prefer to use their VA benefits.
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Military Homebuyers Move Frequently
Since military buyers PCS regularly, it's challenging to secure an affordable home that allows them to recoup the initial investment before receiving orders to move again.
It's also common for unexpected orders to arrive. Early or late departures to revised locations are all possibilities. Homeowners scramble and find solutions to the question, “Do I sell or rent my home?” Either accidentally or purposefully chosen, a rental home business is time-consuming and requires plenty of planning to keep it profitable.
Learn more by downloading this free guide, PCS Ahead: Should I Sell or Rent My Home?
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What Military Members Should Know Before Renting a House
Perpetual rental life typically gets a bad rap, sometimes with good reason. Each month a military member sends rent to a landlord or property management company is another month their money doesn't go toward equity.
The landlord/tenant relationship can be challenging for those without experience and those without strong communication skills. Add the prospect of unexpected rent hikes and the restrictions on customizing the house to personal preferences, and rental life might not seem so appealing.
Learn more about renting:
However, rental home markets remain strong surrounding military bases across the country, mainly because of the aforementioned short timelines for living in a home and the ability to choose a home based on personal priorities, including public schools and transportation.
Although renters don’t build equity, many do not view rent as a waste. They are, after all, supplied month after month with the housing solution they’ve chosen, with fewer upfront costs and little to no upkeep and repair fees.
How Military Home Renters Are Unique
Because military families factor in inevitable PCS moves into their 5- or 10-year plans, renting a home may well be a purposeful part of their finances. Renting under budget allows for savings that could become a significant down payment or the money needed to cover closing costs and emergency funds for later home buying.
Another reason military members choose to rent is the undeniable unaffordability of real estate near military bases in expensive zip codes. It's widely known BAH doesn’t necessarily stretch enough to cover mortgage or rent payments in high cost locations.
This deficiency in BAH is in addition to the years-long trend of inflated rental prices across the country due to a lack of inventory and increased competition for rental homes because homeownership is unaffordable for many.
On-Base Military Housing
On-base housing is one of the most unique and beneficial lifestyle factors military life offers. Renters pay their monthly BAH to private companies contracted with the Department of Defense to provide housing.
Many military members and families choose to live on base due to affordability, square footage, lack of housing near the base, free maintenance, and built-in safety and security measures. These are reasonable factors to consider before renting on base, but unfortunately, there are some downfalls.
Quality and safety issues have plagued private military housing across the country for nearly a decade, and solutions are slow to appear. The fixes intertwine congressional oversight and the housing companies making the corrections.
Traditional complaints that stem from living in a rental property include little opportunity to customize the interior and exterior of the homes and the lack of privacy due to shared walls or small yard spaces. Although the disadvantages of military housing overlap with renting off base, the convenience factors into the overall decision to live there. Short commutes, direct access to food and gas, and military-only programs certainly provide benefits not typically found off base.
Learn more about military housing:
Reconsider Your Buy vs. Rent Formula Before Each Move
With each move, service members have many factors to consider before deciding whether to buy or rent their next home. The length of time spent in one duty station and the health of accessible finances are two of the principal considerations. Planning for unexpected circumstances, such as becoming a landlord or expanding their family, also drives the decision-making process.
Between each family's individual differences and the location change, there is little room to bank on using the Buy Vs. Rent formula that worked previously. This is when using an online calculator can shed light on your particular set of circumstances. This information, coupled with guidance from a real estate agent, will help your family assess a comfort level with buying or renting a home, while considering current financial and emotional strengths and weaknesses.
By Dawn M. Smith
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