To rent or to buy at your next location, our favorite question that has no definitive answer, haha!!

While we are firm believers in buying real estate at every duty station to build generational wealth, we DO NOT believe that buying is right for everyone. 

Wait, what? You two are real estate agents and you actually said that not everyone should buy a home? 

Yup, you read that right, and we sure did!

Contrary to popular belief, many real estate agents care more about their clients success in the home rather than a sale. If you find that statement to be false, then you’ve been talking with the wrong agent. 

It’s more important that we find our families a place to call home that they can AFFORD and maintain a comfortable lifestyle, rather than finding them a house that they can afford only on closing day.

Cutting the budget too tight leads to serious struggles when the HVAC needs to be repaired or the refrigerator needs a new part.

That can trigger a downward financial spiral, forcing families to live paycheck to paycheck or to forgo important things like activities for children, a flexible grocery budget, or even trips to local places for entertainment. 

Are you debating between renting or buying at your next duty station? Here are some things we always consider and review with our clients. Let’s get started! 

1. Talk with a lender.

We always suggest talking with your lender at the very least to get an idea of what you can afford on a monthly basis. Some will say whatever BAH may be, while others are able to contribute a little more. 

Realistically, families that are only willing to contribute BAH towards owning a home should seriously consider living on post – the current market, economy, and mortgage rates do not match what is needed to purchase (or even rent) what you’re looking for.

Never say never though, some families are able to only spend BAH BUT they may sacrifice size or interior finishes in order to become homeowners.

2. Create a realistic budget…keyword being realistic!

Although painful, review your spending habits for the past several months and see where your money is going. Take into account the cost of living at your new duty station. $200 is not a reasonable grocery budget for the month.

Don’t skimp because you feel you overspend – if going to Starbucks makes you happy and is something you will not give up, account for it! 

3. Do you WANT to be a homeowner?

If something breaks or needs replacing in your house does that irritate you? Are you prepared for routine home maintenance?

Are you able to save a little bit of money for estimated home repairs? 

4. Create a game plan for when it’s time to leave.

Rental- If you are able to turn your home into a rental, will it be profitable in the long run? Our recommendation is to open a separate account for your rental and save about 6 months of mortgage payments (from rent collected) for protection. That way if something needs repair or if the home isn’t rented, you will have a safety net to fall back on. 

Selling- It is against the law for your real estate agent to tell you that your home will be profitable in several years. It’s YOUR job and responsibility to review the market and take calculated risks. No one can predict the future, but if you’re comfortable with your pricing, then selling on a quick turn around could be worth the gamble. Generally speaking, it’s best to own your home for 3-4 years at a minimum to gain equity. 

Walk away- If you’re in a rental or living on post, you essentially need to clean the place, pay any damages and walk away! 

To Recap: 

If you have the financial flexibility to save a little bit of money each month while paying your mortgage…and you like the house enough to fulfill your WANT for being a homeownership, we support you!

Go for it!

Connect with a vetted agent and find a piece of real estate that will build generational wealth for your family. 

On the flip side, if… 

-your budget is too tight 

-the house in your price range is just dreadful 

-you don’t mind living on post 

-your cash flow is one home repair away from heavy debt 

…then we highly recommend living on post. The gamble of owning a home just to check a block is NOT WORTH IT!

Live on post and enjoy the short commute to work. Train yourself to save money, build credit, and get into a better financial position.

Homeownership is not going out of style, you can revisit the idea at a later date. Your opportunity is coming, just don’t rush it! 

In the end, you are ultimately the one making the choice to buy or rent. YOU must be comfortable with your path forward, as it’s not your agent’s job to set your budget.

As Denis Morton at Peloton always says,

“I make suggestions, you make decisions.”

Your agent and lender can map everything out for you, but you are the ultimate decision maker. Choose wisely!

*For MORE tips and advice, visit the PCS HOMEGIRLS! You can also visit them on their M:M author page.