When you live on base, your full base allowance for housing (BAH) is sucked away by Uncle Sam as the cost of "renting" the on-base housing. Some military bases are reducing how much BAH is paid; check with base housing. If you do your homework and find a home to rent or buy off base for a lower amount monthly than what Uncle Sam is charging you for housing, you get to pocket the difference each month instead of letting Uncle Sam keep it. More about doing your homework: remember to find out what utilities, gas, and extras will cost you monthly so you are comfortable with your analysis of how much better, if any, it is to buy or rent off base.
There are several factors to consider when trying to decide why to buy or rent. We'll give you the usual ones here. As always, please remember to do your own investigation regarding issues or factors that are important to you, whether renting or buying a home anywhere.
You may have heard of a Rent-Buy Calculator. This is a software program that lets you input how much it would cost you to rent versus how much to buy a similar home as well as how long you plan to stay, and it spits out the answer as to whether you'd make or save more money by renting or buying. Be careful: this does not consider the option of buying for your tour of duty while you're here, and then - instead of selling - going ahead and renting out the home after you PCS from here.
Imagine years 3 through 30 of the loan being paid by the tenant paying rental payments to you, with - at times - you having to throw a couple hundred or a few thousand dollars at repairs and maintenance. Is it a pain? Sometimes, though less if you use a property manager to handle the hassles. But consider this: those rents will go to paying off the bulk of a couple-hundred thousand dollar investment that has your name as the owner. Once you've retired, that cash flow from rents or the profit from the value of the home by that time in the market (less whatever is left as owing on the loan) is your profit for taking on some hassle. Being a landlord isn't for everyone, but having a good property manager handle it can make it palatable. And the payoff can be significant, again, thousands of dollars.
Buying a home is an investment, using your BAH to pay monthly into a savings vehicle; since your monthly payments go to pay off that loan, at some point when the loan is paid off, you are either saving yourself a housing payment, or you are renting the home out to someone else, whose rent payments to you are cash in your pocket. Note that this strategy requires that you make sure the note gets paid down/off. If you continually refinance the home and/or take cash out, it makes it less likely you'll achieve this goal.
Buying a home also gives you a place you own and can live in as you wish, rather than having to get your landlord's approval to change paint, carpet, landscaping, etc. Beware, though, if you buy in a home in a homeowner's association ("HOA"), the HOA may be able to tell you what exterior things you can do to the home and how you have to keep up your yard, trashcans, etc. On the other hand, if you like the whole neighborhood to be kept up by your neighbors, maybe you would prefer an HOA to be involved in making your neighbors take care of their yards. There is no one answer, other than the answer you prefer.
If the rent would be a lot cheaper for you than the monthly cost to buy, then this is a consideration as to why to rent. Again, factor in whether you want to take on an investment as described in the prior paragraph. If the hassle in time and having to pay for repairs and maintenance are too much for you compared to the possible up-side of long-term return, buying is not for you.
Another reason to rent is if you do not qualify in terms of your credit score or your debt-to-income ratio. Note that your credit score for purposes of buying a home is calculated by the credit bureaus differently than the credit score you'll see if you get a "free credit report." The latter is a consumer credit score, not a home loan credit score. A "consumer credit" score is typically higher than a home loan credit score.
For answers to questions about whether you qualify in terms of your credit and debt to income ratio, feel free to contact Lisa, with no hassle and no obligation.
Here is a map for reference:
Yucca Valley to Marine Corps Air Ground Combat Center front gate: approx 30 min.
Joshua Tree to MCAGCC: approx 20 min.
Twentynine Palms to MCAGCC: 5 to 10 minutes depending on location of home.
Several factors are mentioned by our clients as reasons to live farther than Oceanside for Camp Pendleton, or farther than San Diego for San Diego bases:
"Sand to Sea Properties, Inc. provided stellar customer service from beginning to end. Throughout the entire process Frank and Lisa guided us and were always available to answer any question or concern, and were prepared for any curve ball throughout the home buying process. Their expertise in real estate became such a comfort to know we were working with top notch individuals who were not just incredible at what they do, but also enjoyable to be around. We highly recommend Sand to Sea Properties for your home buying or rental needs."
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