Should PCS Personnel Buy a House?
Military life can be a hectic one that changes quickly. However, that doesn’t mean you’ll be unable to make decisions like civilians do every day. One of those decisions is determining whether or not to buy a house while you’re on your permanent change of station (PCS). Sure, you could rent again—but nothing quite beats the feeling of coming to your own house, unlocking the door, and saying, “I’m home!”
Personnel currently on PCS can utilize their Basic Allowance for Housing (BAH) in combination with VA Loans to purchase a house they otherwise might not be able to afford. Once purchased, those personnel can build equity in their home or turn it into a rental property. However, houses present their own unique set of downsides, and purchasing one might not be a good move for every military member.
At StorageMart, we’re proud to assist military members in their quest for the perfect home through our military storage units. As a result, we know a thing or two about this important decision.
Benefits of Buying as Opposed to Renting
Whether you’re buying or renting, you can make use of your BAH to cover expenses including both mortgage or rent payments, as well as utilities and other costs. However, there are undeniable benefits to purchasing your own house as opposed to renting a home or an apartment.
You Get Your Own Home
There’s something special about your own house. It’s a big element of The American Dream. When you don’t have a landlord, you’ll get to do all sorts of things you couldn’t when you were renting. From simple things like painting and hanging pictures without a second thought to more in-depth things like enacting your own renovations, owning your own house is a freeing way to live how you want.
Take Advantage of VA Loans
For civilians, there’s a significant upfront cost to purchasing your own home. In both Conventional and FHA loans, the minimum down payment for a house is 5% and 3.5%, respectively. That’s thousands of dollars many families don’t have. Furthermore, PMI—or Private Mortgage Insurance—is required until a 20% down payment is reached. In even the most affordable markets, that can come out to $30,000 or more in cash.
As active duty personnel, you have access to the benefits of VA loans. Created as World War II was coming to a close to help military members like you purchase houses, VA loans have such benefits as:
● No down payment
● Loose credit requirements
● Availability to all active duty members
● Limited closing costs
Best of all, you’ll be able to use your BAH as income, qualifying you for a wide variety of homes. Just be aware your mortgage cost will be higher if you don’t put a down payment on the house.
Build Equity and Sell—or Rent
Perhaps the single biggest differentiator between home ownership and renting is equity. When renting, you are paying to live in a building. No matter how long you live there, you won’t have anything to show for it. However, when you’ve purchased and paid off a house, you own the house. Even if you never pay off a house, you can use the sale of that house to help you buy a new one or to finance other needs.
Alternatively, once you have moved to your next PCS, you can utilize your previous house as a rental property. This will generate passive income for you and will still afford you the opportunity of selling your home later.
Drawbacks to Owning Your Home
Of course, as with most good things, purchasing your own house has downsides. Home ownership is ultimately not for everyone, and depending on your PCS location, stage of life, or other factors, buying a house might not be the best decision.
Homes Are Expensive to Own
If your furnace breaks while you’re renting an apartment, it takes one call to the landlord to get everything squared away—at no cost to yourself. On the flip side, if your furnace fails in your own house, it’s on you to figure out what to do, what kind of unit you want, who you want to hire to replace it, and how to pay for all of that work.
You’ll be responsible for these costs and events, and they can add up:
● Emergency repair (HVAC, plumbing, electrical)
● Routine maintenance
● Tool acquisitions (drills, lawn mower, snowblower, etc.)
● Exterior repair and maintenance
In addition, even if you get a fixed rate mortgage—meaning your core mortgage payment stays the same—your monthly payment can vary due to property tax fluctuations. While it’s possible for your monthly taxes to go down, usually they go up throughout the life of the loan. Either way, it’s another thing you can’t control.
You Won’t Get to Enjoy It as Long
Relocation is a constant in most military households. If you’re one of the few whose potential deployment locations are limited due to a specific skill set, you’re in luck. Otherwise, you have to weigh whether or not you want to go through with the home buying process knowing you’ll move soon. The average military member relocates to a new PCS every two to four years. Even when you successfully make your home purchase, you just won’t have as much time in it as civilians do in their homes.
Military Storage for PCS Personnel
Purchasing a house is a big decision and a lot of work. Between finding a realtor, making offers, lining up the paperwork, moving in, putting your own touch on it, and probably spending more money on it than you would like, you may find it’s too much effort for too little reward. On the other hand, purchasing a house can be a sound long-term financial investment, and the pride in knowing you own your house is unmatched.
Whatever you choose, StorageMart is here and ready to help with your military storage needs. With month-to-month leases, exclusive discounts, and fantastic service and security even when you’re deployed, we’ve got the storage units that will help enrich your home, whether you’re renting or owning. Find your nearest location and reserve your unit today!