As a military service member, you have several options when it comes to finding housing at your new assignment. You can apply for government quarters on base, or you can rent, or you can buy a home. Each option has its benefits, but which one is right for you?
Home Ownership and the Military Service Member
Official quarters used to be the best option at most military installations, particularly for a military service member who wanted the convenience of living on the installation where they worked. Recent changes to DOD policies, however, have changed things, and not for the better. Following the privatization of military housing in 1996, nearly 99 percent of all quarters on military installations are now run by civilian contractors. Where this impacts you most directly is in your Basic Allowance for Housing (BAH). Under current DOD regulations, the entire amount of a service member’s BAH is now paid to the company contracted to manage the quarters, even if the cost of the rent is less than the full BAH. Also, when your BAH increases when you are promoted, that increase is absorbed by the contractor landlord, even if you do not move into larger or newer quarters. Basically, your military rent goes up whenever your BAH goes up. If you reside in quarters on base, you unfortunately receive no direct benefit from increases in your purchasing power. Additionally, the waiting list for 3-4 bedroom quarters on Joint Base Lewis McChord is currently averaging six months to a year before move-in.
Renting in communities near to military installations has the appeal of requiring less long-term commitment or financial obligation, particularly since military personnel usually expect to be transferred every several years. If your BAH can completely cover your rent, this option might seem both sensible and attractive, but is it, in the long term? One way to look at it is that if you rent for three or more years, at the end of that time you’re no better off in terms of financial growth or investment than you were when you started. Renting may cost you very little out of pocket, but the money spent will have done nothing to improve your financial position.
Home ownership, on the other hand, is a solid investment in your future, one that allows you to use the full power of your income and BAH to benefit you and your family instead of a government contractor or landlord. For most military service members at the mid-career level, the monthly BAH for the Seattle/Tacoma area is more than enough to cover the mortgage payments on a property purchased for $350,000 or less. Rental rates in this area tend to run higher than mortgage costs for comparably sized properties, so when you buy rather than rent, your BAH actually gets you more house for your money. Additionally, owning your home in this area gives you the option of selling when you’re reassigned, or having an investment property that you can rent out in a highly competitive rental market.
Buying a home allows you to invest your money in your own future and maximize the benefits that you’ve earned through your service to our country. Home ownership is part of the American dream, and the Fornerette Team is excited to show you how you can reach it.