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Should You Rent Out or Sell Your Home During a Permanent Change of Station?

Many in the military end up moving thanks to a permanent change of station (PCS). If you own your home, you have two choices: sell your home or rent it out for extra income. Here are the pros and cons for these two options.

Should You Rent Out Your Home When You PCS?

There can be a lot of benefits to choosing this path. First, you are creating a second income stream for yourself. It may not be very big right now, but it will grow over time. If you keep the home for a few years and then refinance, your monthly payment will be lower. This frees up more of the rental income to go towards whatever you want – buying another property, investing in stocks, paying bills, or just having fun.

Second, you are leveraging something you already own. It’s generally easier to rent out a home you already own and get a second one you’ll move into than vice versa. Just keep in mind that if you currently have a VA Loan on the home, you’ll need to refinance before you start renting it out. VA Loans can only be used for a house you’re living in.

Third, you know the community will have a constant flow of renters. Military bases have people coming and going all the time, so it should be fairly easy to find someone to rent your home.

There are downsides though. For example, you either have to manage your property from far away (since you’ll be at your new base) or pay a property management company to do it. Neither is fun.

Another thing to consider is you will have two mortgages. Assuming you can keep a good tenant, this may not be an issue. But you should have the savings to cover yourself if you have a vacancy for a few months.

Before you decide for or against this route, let’s talk about selling.

Should You Sell Your House When You PCS?

Similar to renting, you have some pros and cons here.

The biggest advantage is that your life becomes a bit simpler if you choose to sell. You don’t need to worry about dealing with a property management company or tenants, which can be a pain sometimes.

Another advantage is you don’t have two mortgages to pay. You just have to make sure you can cover the house you’re living in.

The downside is mainly the opportunity cost. By choosing to sell your home, you’re giving up an investment opportunity in one of the most proven ways to wealth. Real estate has made a lot of people financially independent.

Obviously you can still choose to invest in a rental in your new area, but it’s generally easier to rent a home you already own than have to buy a new rental.

Conclusion – Should You Rent or Sell?

At the end of the day, there are advantages to both selling and renting your home when you PCS. It comes down to a personal decision and what you think is best for your situation. And when you’re ready to buy your next home – whether it’s a rental or for yourself – shoot us an email at sal@arcusvamtg.com. We look forward to helping any way we can.

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