Should You Buy Or Rent With Your Next PCS?

The USAA Educational Foundation

Buying a house is a huge financial decision, and it’s even bigger for military families who could receive new PCS orders before the boxes are fully unpacked from the last move. So, if you’re in the military, should you buy or should you rent?

No One-Size-Fits All Answer

In short, there is no perfect answer. Each house, family, and real estate market will be different. But here are five questions that could help you decide if the timing is right for homeownership or if renting makes more sense:

1. Do you have an emergency fund?

Maintaining an emergency fund makes good sense for almost everyone. Still, it’s even more important for homeowners because of the possible magnitude, importance, and unpredictability of home repair and maintenance expenses. If you don’t have an emergency fund equivalent to at least three months worth of expenses, perhaps buying a home should wait.

2. Do you follow a budget?

For most people, homeownership and budgets should go hand-in-hand. The better you are at managing your cash, the better prepared you’ll be to handle the financial challenges associated with owning a home.

3. Do you have a down payment saved up?

A down payment provides instant equity that can be a real life saver if the housing market hasn’t cooperated by the time you need to sell. Plus, the very act of being able to save up a down payment is often a good indicator you’ve got the financial discipline that can help make owning a home easier.

4. Do you have strong future job security?

Household expenses consume more than any other budget category for most people. Add in the long-term commitment of owning a home and it becomes clear just how important your future earning ability is if you’re going to buy. If you’ve got two household incomes try to budget your housing costs around just one of them to give you more security.

5. Do you have the ability to keep the house for a long time?

Every housing market is different but if you can't plan on owning a house for at least three years (sometimes a lot longer), renting might be the better move. For military personnel with three- or four-year assignments, this is an especially important point to consider.

Now to be completely fair, it’s worth noting that plenty of people have purchased homes without ever considering these questions and everything worked out just fine. Still, with a financial transaction this large, it’s typically better to think about it from as many angles as possible.

The USAA Educational Foundation, a nonprofit organization, does not endorse or promote any commercial supplier, product, or service.


Tip of the Day

  • Written by | September 30, 2014

    Rounding #debt and #mortgage payments up to the nearest $100 will get you out of debt years earlier.

Saver Stories View all »

When You Start Small, Saving is Easy

Written by Lila Quintiliani | August 12, 2019

When Attiyya first got married, she and her Marine husband had just graduated from college and were focused on paying off student loan debt. They had both attended private schools and had sizeable loans. Then three months after the wedding, the couple found out they were pregnant with their first child.

The first year of their marriage, says Attiyya, was a balancing act between paying down debt and saving for the future.


Setting a Goal Leads to Success

Written by Super User | May 24, 2019

Growing up, Marisa’s dad had always talked about saving first, but she said she didn’t really internalize it until much later. “I was drifting along with no plan, carrying a little bit of revolving debt, saving some money here and there, but without a real plan for it.”


Building a Six-Figure Savings While Enjoying Life

Written by Jackie Toops | November 13, 2020

Does the idea of saving up hundreds of thousands of dollars seem impossible? How about doing it while still living an enjoyable lifestyle?

For military spouse Martina and her husband, an E-5 in the Navy, accumulating a six-figure savings has become a reality. One might think that in order to save this much, it would take a great deal of sacrificing and forgoing a certain quality of life, but Martina and her husband would disagree. “Over the past few years (about five), we've managed to save almost $120,000 while mostly living on one income. We've learned so much about easy ways to save money and live a good life,” shares Martina.