Housing is always a consideration when you’re on active duty. Your superior will approach you about PSC and ask where your family will live. He will offer you military housing on base or expect you to find a place somewhere else.
In addition, you and your partner have probably had conversations about how your housing situation affects your daily life. As much as you love your country, you all may agree your kids need space from the 24/7 base life. You may need healthy boundaries to continue serving your country with joy and to protect your children.
Veterans, military personnel, and active duty friends will give mixed opinions on both sides. However, our job is to present the pros and cons of buying a house in the military. We want to help you make the right decision for your family moving forward.
Housing Options in the Military
You and your partner could already be aware of the different housing options available to you and other active duty members. We want to review these with you for the sake of the blogs and websites you may have seen.
Sadly many only consider renting or buying from one angle, giving you an inaccurate picture of mortgage payments during military life. Fair representation of military families living on base vs. purchasing a home brings the most clarity.
First, you can rent a military-owned house on your duty station, which is a common option and the cheapest. The government covers utilities for you and their homes always fall under your monthly allowance. You can always rely on base housing to leave you extra cash for saving or spending on other family affairs.
Another option is to rent a home on your duty station that a private party owns rather than the military. These properties will keep service members like you close to your workplace and provide more residential styles and housing options.
If you’re looking to find a home away from the base without a buying commitment, your family can rent from an apartment complex or neighborhood. The home will have zero ties to the military, except your monthly allowance will cover some of the rent.
Purchasing a home is more straightforward than renting since you can’t buy properties on your military base. Ideally, you and your partner want to invest in a home near your base within your budget that has a low-interest rate.
You can opt for traditional home loans to fund your homeownership endeavor or apply for a VA Home Loan while on active duty. Having 90 days of continuous service and fulfilling other requirements, you can meet with a lender to receive a reliable home loan.
With zero down payments and no PMI (Private Mortgage Insurance), buying a home is much more accessible. Veterans Affairs will back your VA Loan in case of default, which allows lenders to be more lenient with credit score requirements and offer lower rates.
Renting vs. Buying on Active Duty
With all your military housing options in mind, it is imperative to look at the pros and cons of renting and buying while on active duty.
Again, videos and blogs of servicemen and women getting rich from PSC real estate fill the internet. But others will warn you of purchasing during your service and recommend safer options without the promise of cash.
We recommend reviewing the benefits and consequences of buying and renting during your military service for yourself.
Renting Pros for Active Duty
The biggest draw toward renting over buying is the simplicity and ease of renting. All you and your partner must do is pay your monthly payment, move your belongings in, and move them out. Your landlord pays for house maintenance and repairs, so you can have security if something unexpected occurs on the property.
Many military bloggers discuss the advantages of renting, especially on a military base where they cover your utilities. You’ll have excess in your monthly allowance to put towards savings, retirement, or mutual fund accounts.
They believe you should invest in more stable options rather than gamble your family’s future
Renting Cons for Active Duty
Various drawbacks come with renting and one of the largest is permanency and control. You have less ownership in a property that you and your partner pay someone else to live in. And your kids experience that tension by never believing they have security or stability in their home.
Military bases, private parties, and HOAs control what you do inside and outside your home. If another person dictates your family life at home, then are you actually receiving the boundaries you desire apart from the military?
Finally, passive income is impossible by renting. There’s no way you can turn a rental property into a money-maker for future military tenants, saving funds for a grand retirement after the military.
It’s no secret that the military doesn’t provide a generous income and your financial future can look gloomy after you retire.
Buying Pros for Active Duty
Unlike renting a home, buying one can dramatically increase your income with the equity you earn. Many active duty families purchase a property with their VA Home Loan, sell it when a PSC requires them to, and repeat the process.
Home equity will earn from the time they buy to when they sell and they can pocket thousands for their family’s future.
It can also be more economical in some cases to pay your mortgage each month instead of paying rent. And you can lower your taxable income when you’re paying on your home’s interest and property taxes each month. Purchasing a home can save you money in the short term, not just several years down the road.
You also have the option to rent your home to future tenants instead of selling if you feel the market is not ripe when your PSC arrives. There is incredible versatility when purchasing a home and the VA Home Loan makes it easier than ever before.
Buying Cons for Active Duty
No matter your military branch, the United States does not provide a generous income for serving your country. A strong tug may draw you into the military, but you must understand that investing in a home can put you in a financially unstable position. Housing market crashes could devastate your family’s future, including its housing situation.
Securing tenants into your rental home or selling your home through a realtor can be expensive and time-consuming. You could be in a different time zone several hours behind or ahead with irregular work hours. And it wouldn’t be great to stress out your partner with those responsibilities if they’re watching the kids.
Your family can reap massive income from home equity increases, but that process doesn’t occur overnight. It could take years to reap what you sowed and you must profit more than your closing costs and price for selling with a real estate agent.
What’s Best for My Family in Active Duty?
We understand purchasing a home is a big step for you, your partner, and your kids. And it is not wise to rush any decision, especially when renting might be more viable in your circumstances. It’s challenging to decide whether buying a house while on active duty military is the right choice.
Jimmy Vercellino is a veteran himself and leads our VA team. We’d love to talk about your options over the phone with your partner and assess what your best steps are forward.
You do not have to wrestle with these PSC questions alone: Jimmy has been there personally. And he can answer your questions on the home buying process for VA Loans and traditional loans.
You can reach his direct line by dialing (602).908.5849 and he will get back with you shortly. Another VA lender will respond if he’s serving another client and follow up with you as soon as possible.