Renting vs. Buying: Pros and Cons for the Service Member

Exploring the choice:

One of the critical decisions that active duty military personnel often face is whether to rent or buy a home. With the transient nature of military life, coupled with the desire for stability and investment opportunities, weighing the pros and cons of each option becomes as essential as overwhelming. In this blog post, we'll delve into the some of the considerations the service member and their families should take into account when deciding between renting and buying a home at their current or next duty station.

Pros of Renting for Military Personnel:

1. Flexibility: Renting provides flexibility, allowing military families to easily relocate with minimal financial and logistical burdens. Given the nature of military assignments, the ability to move without the hassle of selling a property can take a load of stress off during your PCS season.

2. Maintenance Responsibilities: Renting typically means that the landlord is responsible for maintenance and repairs, relieving the service member and their family of the financial burden and time commitment associated with upkeep. This can be particularly beneficial for military personnel with demanding schedules or frequent deployments. Less work to do outside of work is a big incentive for most service members.

3. Lower Upfront Costs: Renting often requires less upfront costs compared to buying a home. While purchasing a home may involve a down payment if you decide to use something outside of your VA loan, closing costs, and other expenses, renting typically requires a security deposit and possibly first and last month's rent.

Cons of Renting for Military Personnel:

1. Lack of Equity Building: Renting does not offer the same opportunity to build equity in a property versus owning a property. Instead of investing in an asset that may appreciate over time, renters essentially pay for temporary housing without accruing ownership benefits. You are paying somebody else's mortgage and getting nothing out of it when you leave.

2. Limited Control and Stability: Renting means living in a property subject to the landlord's rules and decisions. This lack of control can lead to uncertainty regarding lease renewals, rent increases, and potential changes in living arrangements that may not align with the preferences or needs of military families.

3. Potential for Rent Increases: While renting can initially seem more affordable than buying, renters are susceptible to rent increases imposed by landlords, especially in competitive rental markets. These increases can impact budgeting and financial stability over time. If you go to renew a lease and you are expected to pay an increased monthly rent, you are backed into paying it or immediately figuring out where you have to move within a short window of time.

Pros of Buying for Military Personnel:

1. Long-Term Investment: Buying a home allows military personnel to build equity over time, potentially leading to financial gains when selling the property. This can serve as a long-term investment strategy and provide a sense of stability and security for military families. Bell county home prices appreciate 2-3% every year, over the span of a typical 3 year assignment that can be a quite profitable and almost passive investment. If you can swing a stabilization because you like where you are, you're talking even more potential for profit.

2. Personalization and Control: Home ownership offers the opportunity to personalize living spaces, make renovations, and establish roots in a community. Military families can have greater control over their living environment and enjoy the pride of home ownership, making a home for the duration of your assignment

3. Utilization of VA Home Loan Benefits: The Department of Veterans Affairs (VA) offers eligible service members access to VA home loans, which often feature competitive interest rates, no down payment or private mortgage insurance (PMI) requirements, and flexible qualification criteria. These benefits can make home ownership more accessible for military personnel. Getting into a house without a down payment will save you thousands up front.

Cons of Buying for Military Personnel:

1. Potential for Financial Risk: Buying a home involves financial commitments such as mortgage payments, property taxes, insurance, and maintenance costs. Military personnel facing frequent relocations or uncertain deployment schedules may encounter challenges in selling or renting out a property, potentially leading to financial strain. I want to hit on buying your house at what it's actually worth and not what the seller thinks it's worth, overpaying can lead to a huge issue down the road on a short term investment.

2. Market Volatility and Appreciation: The real estate market is subject to fluctuations, and home values may not always appreciate as anticipated. Military families purchasing a home in a volatile market or during a period of economic uncertainty may face challenges in realizing returns on their investment. I want to add that purchasing next to a base can completely counteract this, the service members will always need a house and the base housing is usually on a back log, and rent increases well above BAH.

3. Limited Time for Research and Decision-Making: Military assignments often come with tight timelines for relocation, leaving little time for thorough research and decision-making when purchasing a home. Rushed decisions may lead to regrets or unforeseen complications down the line. You have to find an agent who is going to work with you and give you a no bullshit answer to the hard questions.

Conclusion:

Deciding whether to rent or buy a home is a significant consideration for military personnel, with implications for financial stability, lifestyle preferences, and long-term goals. While renting offers flexibility and lower upfront costs, home ownership provides the opportunity for equity building, stability, and personalization. Military families should carefully weigh the pros and cons of each option in light of their unique circumstances and priorities, seeking guidance from financial advisors, real estate professionals, and fellow service members to make informed decisions that align with their needs and aspirations. Do your research, ask the hard questions to knowledgeable agents, lenders, and trusted friends who've been in this world before. 

Visiting the Temple National Guard

 

You visited a bunch of National Guard, so what?

First things first, a big thank you to the command team that allows us to go and visit their Soldiers and gives us the opportunity to engage within their unique community. The Command team out there is rock solid from what the joes tell me, and it is apparent upfront just by watching how their ranks interact with the troops that they are focused on their Soldiers, their well-being and training them the right way the first time. It is a breath of fresh air coming off Active Duty and seeing Soldiers enjoying being in the uniform and just going about their taskings without seeing dread and misery all over their faces.

The "So what?".

The men and women who serve at the Temple armory are built different, I saw something I haven't seen for a few years that was lacking on AD side, serious talent and knowledge. I found myself talking to countless Soldiers and Leaders from all levels and they all had different reasons for serving, a lot of them were GWOT Veterans that had CIB's, CAB's and had multiple deployments under their belts. I felt like half of the Soldiers were making a 3+ hour drive to come to Drill, but they all chose to be at the Temple Armory. Weird right? Well, get this, they all had a positive mindset and everyone who talked to us seem to know exactly what they wanted for their careers and had their personal goals established.

Real Estate and the Troops.

The more we talked to the troops I discovered a surprising truth: many service members are unaware of the full extent of their VA Home Loan benefits. Whether due to misinformation, lack of awareness, or simply not knowing where to begin, countless Soldiers are missing out on an opportunity that could transform their lives for the better. The majority of these Soldiers are Texans or have come to Texas and set down roots in order to provide a better life for their families.

I got into real estate to help Soldiers and their families with their PCS, ETS, Retirement and make an impact on our community where it matters most, the home front with their families. Providing resources and information can be as sharp as the tip of a spear, because taking care of the Soldier and their family is the flip side of the wars we trained to fight.

 We train for the chaos of war, we are bred to fight and serve at the call of our country, but we never really got the training that helps us set ourselves up for being in the world after our part of the war is over. A large part of that is a home, the place you take off your boots and hang your uniform, the place you decompress and get ready for whatever comes next.

Leon the Great.

I have a client in the Austin area that is an Army vet who told me something that has stuck with me, and it really applies to all aspects of being a veteran. He said, "What do you know?", I was confused, and I had no idea what the hell he was talking about. He proceeded to tell me "The only way we learn as veterans and Soldiers is to ask those around us what they know, we share the information about these programs and benefits that aren't advertised or talked about outside of our community". Leon was right, it starts with education, empowerment and a commitment to helping our brothers and sisters out through spreading the word about what resources we have and the different programs available. 

Wrapping it all up.

I had a great time handing out drinks to the Temple National Guard, and I really enjoyed all of the conversations I had with the awesome Soldiers they have over there. A lot of really good men and women serve there, and they have a real sense of comradery amongst their ranks. I really enjoyed being the guy at the booth handing out resources and information to the Soldiers, it feels good to be able to help educate Soldiers and provide them resources to do their own research. Success to me is being able to give any Soldier all the information they need to start asking the right questions, identify verified resources and motivate them into doing their own research so they can make an informed decision on their largest financial transaction.

If you have any questions, you can call, text or email me without having to worry about me trying to push a sale. I want you to have everything you need to be able to take you and your family to your new home while understanding what you've earned through your sacrifice and selfless service.