Military Nesties
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
housing?
Do most people in the military buy their homes or do they rent/military housing? We will be a military family soon and I know we will be getting BAH. I just would hate to waste 4 years of BAH on just renting if we decided to not continue with the military but at the same time if we stay with the military I would hate to be trying to sell a house while moving if we get a different duty station.
Re: housing?
H and I rent off-base and don't consider it a waste. We're paying to live in our target area, with everything we could want space-wise but with the luxury of no long term commitment.
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Renting is never a waste of money, IMO. You are paying for a roof over your head.
There are a lot of factors envolved with housing. KC mentioned most of them. You also need to figure out how long you will be in an area. To me, if you are going to be in an area for less than 5 years, buying a house is not a good idea. You will probably not gain enough equity in that amount of time to make it worth it. You have to factor in the repairs you'll make, the insurance, the taxes, the upgrades, closing costs at the time of purchase and sale and many more.
What are you going to do if you are told you'll be at a duty station for at least 3 years, buy a house and get orders to PCS a year later? What if you stay the full 3 years, decide to sell but it doesn't sell before you have to leave?
Depending on the cost of living in an area, you could choose to live in a house more modest than what his BAH is. You could put that extra money aside every month and have money saved up for a down payment when he decides to get out.
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H and I are financially getting to a point where we could buy, even here, but I don't think we will, even though there's a decent rental market if we couldn't sell, etc. I feel like renting is still the best bet for us. I don't want to own a property if we get stationed OCONUS or something.
BAH is not wasted by renting. It's an allowance for housing, which renting is. Wouldn't it be sad if you ended up losing more when you have to bring $$ to the table at closing when you sell than your H earned in BAH? That happens to people.
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At our last base, H had wanted to buy a house because property was cheap and we were "going to be there for four years." I didn't want to and I'm so glad we didn't. We were there for about two. We have a couple friends who bought and now can't sell their house. They're renting at a loss. I would hate to deal with all that, but that's just me.
I hate the sentiment that renting is wasting money. That mentality is one of the many factors contributing to the housing market problem, IMO.
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We bought this house because my H was also sick of "wasting money." He had to take financial classes to be a command financial counselor and was told there you should buy if its more than 5 years. We got a steal for our house for the area it is in, so I'm pretty sure we could probably easily get more than our mortgage payment in rent if we have to PCS and rent it out.
I agree with KC and TX though about the different factors to rent or buy. For us I was okay buying knowing that we are in the biggest Navy area in the country (or world), so there's a good chance that if H requests to stay around here we should be able to. But I know nothing is a definite, and we are just hoping to be here for at least 5 years.
It also depends on the rental market near whatever base you get stationed. Our current base is in the middle of a huge oil boom area, so rentals are nearly non-existent, and rentals that allow pets literally do not exist. Oil workers are living in hotels as if they're apartments, so even hotel availability is non-existent. Houses are on the market for an average of six (yes, six) days before selling.
We get two BAHs because we're mil-mil, and without kids, we qualify for a house smaller and crappier than the ones our subordinates live in, with a yard that isn't sufficient for playing with our dogs, so buying a house off base didn't take much thought.
On the other hand, when we lived in California, houses were going for $30k, so super affordable, but the trade-off is that the crime level in that particular area was super high, people were breaking in to steal stoves and refrigerators, civilian employment was scarce, etc. Homeowners aren't even able to sell their homes at a loss and people are just walking away from them when they get PCS orders.
We rent a house off base. I don't expect us to ever stay at the same base for long enough to make buying a house worth it (closing costs add up!). Additionally, we owned a home before DH commissioned (er, _I_ owned a home before we got married, so being a joint-property state, he owned it, too, when we married). Selling that house when we moved is one of the most stressful things I have ever done. It was on the market for 8 months, over 4 of which were after we had PCS'd away. Carrying costs to keep it kept up and show-worthy were expensive (landscapers to mow & weed, cleaning service to come in and dust periodically, utilities to keep the place decent, etc...) and were a huge hit to our budget. And when we finally did sell the place, we had to bring money to the closing table to make the deal (even though I had put 10% down on it, and had been paying extra on the mortgage for most of the length of the 4+ year mortgage).
Instead, we rent a place to live, and stockpile money in an account to pay for an eventual downpayment. We hope, once DH retires from the military, that we can settle down in one place, and use that money to pay a substantial downpayment, ideally over half of the cost of the home. By doing this, we don't lose out on earning equity in a home - that savings is accumulating interest.
It does somewhat suck to not be able to buy right now - historic low prices, historic low rates (unusual to get both at the same time), but we just don't know where we will be even 1 year from now, much less 5 or 10... Frankly, buying now feels like throwing away money.
When H and I first moved in together, he'd just bought a townhome since he was going to be there 5 years. It was a good bet since his job was at very few locations around the world.
Except, then he was cross trained, and we moved less than a year later. And lost money selling the house, since we had no equity and no desire to keep a home in that location and were overseas. I'll probably not buy again until he's out.
I'm a fan of renting. I get to call my landlord to deal with plumbing issues