Thursday, August 27, 2015

Cautionary advice for owning a house while in the military

Certainly owning a house is one of most everyone's dream. But military members are unique. They travel. They get transferred. Career military personnel can move quite a bit. Buying a home is a big step, and an even bigger one if done while on active duty.

First, your home is a huge investment. And it might not pay off. If you move in a couple of years, your house probably will not have increased that much. You could have little equity. The costs of selling your house might strip away any gains. If you can't sell it before you have to move, you will still owe payments. Trying to rent might be an iffy proposition. Will you get enough to cover the costs? How will you manage the place while you are overseas, or at best, a domestic base? It's hard being a landlord as it is. You could end up with a big headache. A house left alone without occupants is ripe for vandalism.

Military pay can be supplemented by housing and combat pay, along with other allowances. Those are tax free, so any tax break of owning a home might not be there. Just using the standard deductions, a military family might not owe any tax to begin with. Don't get snookered into buying a home because of some big tax break that might not be there.

On-base housing, if you get it, is the best way. Local rentals are the next option.

If you are in your last years and know for a fact that you have reached your final duty station at home, you might consider buying. But there is a great benefit for veterans. VA home loans.

The best advice perhaps is to just wait.