The Tale of Two Rentals: How to compare your rental options during a PCS

By Corrinne McKenna, AFC®

I’m often asked by my military clients, “should I buy or rent a home?” In many cases, renting is the best option due to inadequate savings funds to handle unforeseen home repairs, uncertainty about how long the home will be occupied and unwillingness to become a landlord or sell the home at a loss if a sudden PCS causes the service member to relocate.

Once a servicemember determines that renting is the best choice for them, the next question is “how do I choose the best rental?” There are many, often overlooked factors, that play a role in making the best decision. Below is a process to help you consider all of these factors.

  1. Compare monthly rent price. Your rental costs should be kept below BAH and less than 32% of your take-home pay. The rent price will make up the biggest portion of this amount. You can keep rent prices as low as possible by searching for rentals that address your needs versus your wants.

  2. Compare estimated monthly utilities. Ask the property owner or manager what the average utility costs have been in the past. Additionally, you can contact the electric, water and gas companies that service the area and ask them for the recent utility bills of the property. Keep in mind, your actual utility consumption could be more or less than the historical average. You can find tips on how to reduce monthly utility costs here. Many rentals, especially those located on military bases, include utility costs in the rental price. If you live in a very warm or very cold climate, this could be a huge incentive due to high costs of cooling and heating. 

  3. Compare upfront fees and incentives. There are many additional fees, such as application fees and pet fees, which are involved with renting a property. Always ask if certain fees can be waived due to your active duty military status. Inquire as to whether you can save on application fees by providing your own credit report and FICO score. Your installation financial counselor should be able to provide this to you for free!

    If the rental owner or property manager provides incentives (e.g. first month’s rent free), divide this amount by the number of months in your lease to arrive at the monthly value of that incentive.

  4. Compare commuting distance. The cost of commuting can equal a huge portion of your monthly budget. First, you must determine how many miles you’ll need to drive from your home to work and back. Once you have this figure, check your vehicle manual for your average miles per gallon (MPG). Divide the total miles by your MPG to determine how many gallons of gas you’ll need for your daily commute. Then, take a look at gas prices in your area (you can do this via mobile apps such as Gas Buddy). Multiply your daily gas consumption by the average gas price to find out how much you’ll pay each day in gas. Multiply this by the number of days you work each month to arrive at your monthly gas costs.

    Don’t forget, gas isn’t the only cost of commuting! You must consider wear and tear on your vehicle. You can look up the average maintenance cost per mile for your particular vehicle. Once you have this cost, multiply it by the number of miles in your daily commute and multiply that number by the number of working days to arrive at your monthly wear and tear cost.

  5. Consider value of additional factors. Not every factor of your rental choice can be calculated, but that doesn’t mean these factors don’t have value. If you have to pay a little bit more in commuting costs to live in a home that better fits the needs of your family, this may be worth it to you. If you place a high price on the value of your time and don’t want to spend that time commuting, perhaps you may choose a rental with higher costs but a closer location to work. After you compare the monetary costs of your rental choices, you must then consider if the non-monetary factors are worth whatever difference there may be between the two options. This amount would be your opportunity cost; the amount you give up when you pursue one course of action over another.

Here is a table to help you compare two hypothetical rentals based on the info above:

Monthly Costs

Rental A

Rental B

Rent Price



Average Utilities




Application fee = $5 ($60 ÷ 12)

$250 incentive = $20.83 ($250 ÷ 12)

No fees and no incentives

Commuting Costs:

Distance ÷ MPG x cost of gas x working days

(MPG = 32, Gas = $2.80 per gallon, working days = 20, wear/tear per mile = $.35)


Distance = 40 miles

Cost in gas = $70

Cost in wear/tear = $14

Distance = 22 miles

Cost in gas = $38.50

Cost in wear/tear = $7.70

Additional non-monetary factors

Larger home

Shorter commute

TOTAL Monthly Cost                     

Rental $1000.00

Utilities + $200.00

Fees + $5.00

Incentives - $20.83

Gas + $70.00

Wear/Tear + $14.00



Rental $1200.00

Utilities + $.00

Fees + $.00

Incentives - $.00

Gas + $38.50

Wear/Tear + $7.70



Opportunity Cost



In this example, you must ask, is the $21.97 difference worth the non-monetary factors found in Home A? What else could you do with $21.97 every month (pay down debt, build savings, fund your retirement, etc.)?

Remember, when it comes to evaluating rentals, you must go beyond comparing the rental prices and dig deeper into the real costs of your options. Don’t forget to consider the value of incentives, the cost of commuting, the non-monetary factors, and the opportunity costs.


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