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Thinking About Buying a House? Read This First!
If you’ve been watching the housing market, you may be thinking of buying when your next PCS orders come through. But housing and personal finance professionals argue that renting may still be the best move for mobile military families. Here’s why.
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Statistics Say:
According to Trulia® a company that provides housing-market analyses, buying a home is 35% cheaper than renting in all of America’s 100 largest metro areas.
The Real Deal:
Trulia’s methodology of comparison includes at least one assumption that may not apply to military families. “The numbers are based on a seven-year ownership period,” says JJ Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA. “That’s probably not realistic for most military families.”
Statistics Say:
Zillow®, an online real estate database, reports that in Tucson, Ariz., home to Davis-Monthan Air Force Base, it only takes 2.6 years for a homeowner to reach the break-even point (the point at which it’s less expensive to own than to rent).
The Real Deal:
Zillow isn’t factoring in the costs that military families incur when they have to move. They will still have to pay the mortgage, taxes, and insurance while their home is on the market.
Statistics Say:
In September 2013, Trulia reported that Detroit came in at 65% cheaper to buy than to rent—the biggest savings in the country.
The Real Deal:
Don’t jump into buying a home near Selfridge Air National Guard Base just because it’s cheap. Even if your home were to sell quickly, you would have to be able to overcome added costs, like real estate commissions and other fees, that can amount to 6% of the sale price—that’s more than $10,000 on a $170,000 home.
The Bottom Line:
When deciding whether to rent or buy, look beyond statistics and focus on the realities of military life. Take your personal finances and how long you think you’ll be there into consideration, plus ponder some ‘what if’ scenarios—major repairs, factors like snow removal and landscaping, or orders for an unexpected PCS. If you can’t balance the everyday responsibilities and occasional pressures of home ownership with your spouse’s ongoing service duties, then buying probably isn’t the right choice for you.
Whether you’re looking to find, finance, or insure a home, or get renter’s insurance, USAA has help for all your home-related needs. Call 1-800-531-USAA (8722) or click here to get started.
According to Trulia® a company that provides housing-market analyses, buying a home is 35% cheaper than renting in all of America’s 100 largest metro areas.
The Real Deal:
Trulia’s methodology of comparison includes at least one assumption that may not apply to military families. “The numbers are based on a seven-year ownership period,” says JJ Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA. “That’s probably not realistic for most military families.”
Statistics Say:
Zillow®, an online real estate database, reports that in Tucson, Ariz., home to Davis-Monthan Air Force Base, it only takes 2.6 years for a homeowner to reach the break-even point (the point at which it’s less expensive to own than to rent).
The Real Deal:
Zillow isn’t factoring in the costs that military families incur when they have to move. They will still have to pay the mortgage, taxes, and insurance while their home is on the market.
Statistics Say:
In September 2013, Trulia reported that Detroit came in at 65% cheaper to buy than to rent—the biggest savings in the country.
The Real Deal:
Don’t jump into buying a home near Selfridge Air National Guard Base just because it’s cheap. Even if your home were to sell quickly, you would have to be able to overcome added costs, like real estate commissions and other fees, that can amount to 6% of the sale price—that’s more than $10,000 on a $170,000 home.
The Bottom Line:
When deciding whether to rent or buy, look beyond statistics and focus on the realities of military life. Take your personal finances and how long you think you’ll be there into consideration, plus ponder some ‘what if’ scenarios—major repairs, factors like snow removal and landscaping, or orders for an unexpected PCS. If you can’t balance the everyday responsibilities and occasional pressures of home ownership with your spouse’s ongoing service duties, then buying probably isn’t the right choice for you.
Whether you’re looking to find, finance, or insure a home, or get renter’s insurance, USAA has help for all your home-related needs. Call 1-800-531-USAA (8722) or click here to get started.
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