On Base or Out in Town? To buy or not to buy….

It is PCS season again for the military.  Everyone is scrambling to get orders as soon as possible so they can get their name on “the list” for on base housing…you know the list where there is a 6 month wait but somehow miraculously your name gets drawn three weeks later – and three weeks into your off base lease!  One way to relieve the stress of waiting for on base housing is to buy or rent out in town.  We always recommend purchasing a home because that is the route we took over the last 17 years of our military service.  So the pros and cons of…to buy:


  1.  You get to choose the house you want!  The school district you want!  You get to choose when you can move in and when you can move out.  You can air condition the neighborhood.  They joys of home ownership are many, but the main one is that the house is your to do what you want and when you want (within HOA rules and county ordinances of course).
  2. The military will pay you tax free BAH to live out in town.  Essentially, they are paying you to invest your money in real estate…and income tax free!  BAH will pay you to generate equity in a home.  If you stay on base, you may not have the expenses of home ownership, but at the end of your tour, you will turn over your house with nothing to show for it.  Over the course of 3 years, a service member who makes a BAH of $1800.00 will have put $64,800.00 into a house (equity and interest) which brings us to #3…
  3. Long-term investment strategy: It is becoming increasingly common for military members (ourselves included) to purchase a home at each duty station, keep the property when they PCS and rent it out.  As properties accumulate over the years and each move, military members turned landlords create a portfolio of properties, reap the tax benefits, and create equity in each home while their tenants pay down their mortgages.  Now in military retirement, rent received from our accumulated properties pay the mortgage of our current dream home and we hold significant equity.


  1.  Home ownership is not always easy.  There are repairs that need to be made, real estate tax burden, and loan processes to endure.  The days of filing a 1040 EZ are gone.  The simplicity of moving on base then off base in three years just isn’t there.  There is no self-help center that you can borrow lawnmowers and weed-eaters.  Your neighbors may not be military and the kids in the area may have know each other for years.  The safety blanket of having that armed guard at the front gate is gone.
  2. Just like any other investment, there is a risk involved.  You know what they say, “no risk, no reward”.  If you buy poorly, you may find yourself under water in the house like during the housing crisis in 2008.  Significant research should be done on the home, the neighborhood, the area to ensure you are investing wisely in your new property.  This may be difficult with one week of house hunting leave.  Hint: Do your homework before househunting and consult a professional in the area.  It costs you nothing for a real estate agent to show you properties.
  3. Long-term investment strategy: Being a landlord can be difficult.  Of course, we recommend getting a good property manager to help you take care of your investment.  What happens when your tenant doesn’t pay the rent and you’re on the hook for your mortgage?  What happens when the HVAC needs repairs?  The longer you own your home, the more affected you will be by local real estate markets.

At the end of the day, each individual needs to assess their tolerance for risk.  Risk is inherent in any investment, whether it be the stock market, gold, or real estate.  Where you want to be financially or are satisfied with financially in 20 years will determine what you need to do NOW to get there.