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Renting vs Buying After a Relocation

For members of the military, deciding whether to rent or buy is a financial decision not to be taken lightly. Part of mastering your move is finding the best place for you and your family — and your budget — in your new location.

Understanding your legal rights

Before you begin exploring housing options, it’s important to know your legal rights to protect yourself. Keep these in mind:

  • The Servicemembers Civil Relief Act, or SCRA:
    • Renter’s rights: Under SCRA you can terminate your lease without penalty if you are entering active duty or being reassigned. If you’re unable to pay your rent because of reasons related to your service, this law prohibits your landlord from evicting you.
    • Homeowner’s rights: When buying a home, this act allows active-duty service members to limit the interest rate for their mortgages to six percent. In some situations, you may be protected from foreclosure if you can’t maintain your mortgage because of your military service.
  • Military clause: Depending on where you live and your property manager, many leases have an additional clause that provides further protection for military families who rent and may need to break their lease. Before signing a lease, read any existing clause and consider asking for an additional clause if there isn’t one already.

The pros of renting

If you move frequently, you may want to consider renting. Renting allows you the flexibility to move without the hassle of selling your house.

  • Low maintenance responsibilities: Your landlord or complex manager should handle any repairs or upkeep, which is one less thing on your to-do list. Check your lease to understand your responsibilities versus the complex manager.
  • Lower up-front costs: Most rentals require a security deposit and two months’ rent — first and last — but that’s typically less than a down payment and closing costs on a house.
  • Lower monthly costs: Though it depends on where you live, rent may be cheaper than a mortgage, but your basic allowance for housing will be the same. If your rent is less than your allowance, you can automatically save money each month.
  • Greater flexibility: You won’t have to worry about selling your house when it’s time to move again.

The pros of buying

Buying a home is a big financial decision, but it’s a rewarding choice. Here are some benefits of having a place to call your own:

  • Renovation: You have the flexibility to personalize your own house and make it suit your tastes.
  • Tax breaks: You could be eligible for certain tax breaks that allow you to deduct your mortgage interest and real estate taxes.
  • Equity opportunity: As your home value increases over the years, you have the potential to make money after you sell it.
  • No landlords: You have the freedom to make renovations and changes without having to get approval from a landlord. However, you may want to check to review any Homeowners Association (as applicable) rules and regulations.

If you’re not sure what you can afford or need help creating a budget, a Military OneSource financial counselor can help you weigh your options. Military OneSource provides relocation assistance as well as personalized support to help you master your move.

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