Post from MilitaryByOwner
Among the laundry list of things you have to do, if you’re a homeowner, choosing whether or not to sell your home is perhaps the most cumbersome thing you have to do after getting orders to PCS.
It can be an emotional decision and hard to think about objectively. So while you’re preoccupied with filling out paperwork, transferring your children’s schools, scheduling goodbyes, and packing, I’ll give you these few basic questions to help you gain some clarity.
Answer These 6 Questions to Decide If You Should Sell or Keep Your Home
1) Will your BAH change drastically? If you choose to keep your home, you’d probably rent it out to cover the mortgage. But let’s talk about the worst case scenario.
Let’s say your home is in Hawaii, your current duty station, but your orders are sending you to North Carolina. The BAH is significantly higher on the island than out east. Now let’s say you can’t find a tenant. Can you afford the mortgage plus the cost of a new home or rental in North Carolina? For how long?
This is an extreme example, I know. But this is a situation you need to prepare for by deciding how much risk you’re willing to assume.
2) Is it a seller’s market? Understanding the current housing market in your area will help you decide if you should sell. If you’ll lose money by selling now, it’s probably best to consider renting for now and selling later when the market changes.
If it’s a seller’s market and you’ll have the opportunity to make money if you sell today, you may take advantage of the fortunate timing and sell before you move. Just be sure to factor in the closing costs, consider taxes, and find out if there are any penalties for an early pay off with your mortgage.
3) Do you have time to sell? If you don’t already know, selling a home can take a lot of work and time.
Necessary work can include things like structural, cosmetic, exterior, and secondary repairs. Once the house is ready to sell, then you’ll have to market the property, schedule showings, finder a buyer, and close.
The process takes time, and if you have a long list of repairs to complete and just a month to sell, you might consider not selling. In this case, it’s probably best to rent out the property and sell at a later date if you have a short-notice PCS.
4) Will you move back? If there’s a high probability that you’ll move back to the area, you might just keep the property and rent it out while you’re away.
There’s no sense selling a home just to return to the same duty station to buy another, unless you plan to upgrade or downsize upon your return.
5) Is there a strong military presence? If your home is near a large military installation and located in a popular area, it will likely rent easily. Bonus if your home falls in a popular BAH bracket!
Renting to fellow military families might mean a higher turnover rate, but you’ll likely find that it’s easy to find tenants. You’ll probably also find that renting to military assumes less risk, since you know they’re paid BAH.
6) Do you want to be a landlord? There’s great responsibility and risk when you decide to rent out property.
Entrusting your home to another individual or family can be stressful and emotionally taxing. If you’re not comfortable managing property from afar then you might consider selling, even if all other signs point to renting.
Whether these questions helped you decide to rent or sell your home, MilitaryByOwner has the tools to help you market your home and guide you toward a successful real estate transaction.