Military families can be very quick to dismiss home ownership as a viable option until they’re ready for their forever home. But with the help of a real estate agent, you can find a “right-now” home that serves your family well.
You can potentially pay less to own than to rent. Don’t assume that it will be less expensive to rent than to own. You won’t know if that is true or not until you run the numbers. You should speak with a trusted financial advisor who can help you factor in variables such as income, anticipated length of time you are likely to stay in the area, size of your family, tax consequences, and more.
You may be surprised to find that a mortgage payment can cost less per month than rent. This is particularly true if you have a larger family and/or any specific accommodations that are necessary in terms of accessibility. It can be more challenging to find rental properties with more bedrooms and bathrooms. Should you find such a property available, you’ll obviously pay more for the space. And if you’re in the middle of PCS season and competing with other large military families seeking out rentals, the supply and demand situation can be even more tricky.
When you consider that a VA loan does not require a down payment or mortgage insurance, then you’ll also realize that you won’t find yourself in a position where you must come up with two months’ worth of payments (first and last month’s rent) at once. And don’t forget to factor in tax breaks. You can deduct property taxes and mortgage interest from your federal income tax. Make sure to speak with your financial advisor for guidance on how these breaks would impact you.
Appreciation—the increase in a home’s value over time—can work to your advantage. Anyone who tells you that your home will increase in value from the purchase price is either a liar or a psychic. But your real estate agent is knowledgeable about market trends over time and can give you some great insight into what you can expect in terms of potential return on investment from your home purchase. In the right market, and with the right guidance, it is not unreasonable to expect you might end up ahead (or at least even) on your purchase.
That scenario, however, will not ever be the case with a property you rent from someone else. When you rent, all you’ll have to show for your investment is that you had a roof you had over your head for the duration of your rental agreement. When you buy a home, however, you’ve begun to build equity, even if there’s no appreciation and even if you end up selling your home long before you have paid off your mortgage.
You can do what you want to a home you buy. You don’t need anyone’s permission to change wall colors or to tackle repairs and/or renovations. (You’ll of course need to check with your local township regarding permits for renovations first.) You are free to change your home to suit your needs and preferences.
As a homeowner, you can also modify your home to make it more appealing to potential buyers or renters if/when the military has other plans for where you call home. And those home upgrades mean you can ask for higher rent or a higher asking price when you’re ready to rent or sell. Remember to speak with your real estate agent about any renovations you have in mind with the intent to make your home more marketable. Your agent will be able to provide you with relevant feedback regarding your local market, current trends, and buyers’ preferences.
You can bring your beloved family pets with you. The reality is that, for many military families, moving into a rental property can mean having to make other lodging arrangements for family pets. It can be difficult to find rental properties that accept pets. Those landlords who do often enforce stipulations about the size and type of pets you can have. Not popular even among landlords who are open-minded about pets? Big breed dogs or dogs who’ve gotten a bad rep, like pit bulls for instance. And there’s likely to be added expenses you’d need to factor in if you were incredibly lucky and allowed to move your pet in. Many rental properties require animal securities and/or monthly fees for the privilege of having your pet with you. If you own your home, though, then you get to decide who lives there—humans and animals alike.
You’ll have more flexibility if there’s a sudden change in orders in the middle of a tour or deployment. Yes, you’ll still be responsible for making your regular mortgage payments until you can find tenants or sell the property. But nobody will make you move all your belongings out immediately or charge you for the three months of a year’s lease that you can’t get out of. While there are protections in place that should make it possible for you to break such a lease if you are an active duty family whose orders change, you may find yourself in a heated and prolonged argument—or court battle—before it all gets straightened out (particularly if you live off post). As a homeowner, you’ll be able to list your property for rent or for sale when you want or need to.
The best decision about whether to rent or to own is the one that factors in what works for your family. With your real estate agent on your team, you can trust that your next home, whether you rent or buy it, will be the right home for you.