Should I sell or rent my home after I reclass/ PCS?

2021-06-09T16:43:07-04:00

*Considering* reclassing or just finding somewhere I want to really go (NO CLUE) After I pick up my e-5 on July 1st. I've enjoyed my time as an 12B doing RCP, Dog Handler, etc. But I feel like there's more for me elsewhere (New job or new place). Ive been at Fort Leonard Wood since the very beginning, going on 4 years now. However, as a homeowner, once I were to finish a new AIT & PCS or just PCS in general, what did YOU do with your home? I want to rent it out but don't want the hassle... I want to sell but think ill come back eventually... Could just use a little insight.

Response by SFC Private RallyPoint Member made Jun 9 at 2021 4:58 PM

2021-06-09T16:58:49-04:00

You don't get to choose your follow on assignment when you reclass. You don't even get a say in it, actually.

Whether you keep or sell your home is a highly personally question that depends on what your circumstances are and how much risk you're willing to take. Look at whether or not you can afford to pay your mortgage out of pocket for months you don't have renters and that's usually your answer

Response by LTC Private RallyPoint Member made Jun 9 at 2021 4:58 PM

2021-06-09T16:58:50-04:00

In this market, you should consider selling. I only rented in a bad sellers market.

Response by CPT Private RallyPoint Member made Jun 9 at 2021 8:25 PM

2021-06-09T20:25:28-04:00

People may argue to hang on to it for the long haul, but I would consider selling at this time. The housing market is booming and houses are selling within days! Cash out, PCS with thousands of dollars in your pocket with no stress of renters damaging your property, finding a property manager, and yearly repairs.

Response by SSG Brian G. made Jun 9 at 2021 9:16 PM

2021-06-09T21:16:28-04:00

I would suggest you sell it. The reasons for this are fairly simple. You are going to reclass or at the very least PCS to a new duty station. You have a family and even picking up your E-5 it means that without selling you would still have a mortgage hanging around your neck. Add to this the hassle of renting. You could could find an agency that would rent, screen and upkeep the unit but again that is a hassle that you really do not need. Best course is to sell the unit, pay off the mortgage and possibly pocket some extra cash that you could use now for things that you and your family need or might want.

Homes are easily had. Maybe as you grow in your career you will find a place that in the future you will want to call home and you can buy another home. For now, cut it loose and journey unhindered.

Response by CWO3 Private RallyPoint Member made Jun 10 at 2021 11:44 AM

2021-06-10T11:44:50-04:00

Beware of renters, even if you have a good property manager. A friend leased his at Camp Lejeune while on Okinawa. They trashed the place to the tune of about $50K. Even took the fixtures and appliances. Rebuilt Harleys in LR, bred Dobermans in one BR. Used hardwood floor hallway for burn outs with bikes. Luckily he had a low deductible on insurance. New properties are selling before they are finished now, so your call.

Response by SFC Casey O'Mally made Jun 10 at 2021 4:20 PM

2021-06-10T16:20:59-04:00

I highly recommend renting if you can make it work financially.

In MOST markets, you can usually get a little more for rent than your mortgage is. You can also hire a property manager (standard appears to be 10% of rent, in my experience) so that it is actually NO hassle. Rent can probably cover mortgage + property manager (assuming you are on a 30 year mortgage).

Under that concept, you basically pay only cost of repairs - and any major repairs are covered by insurance. Meanwhile, the renter is (essentially) paying your mortgage for you. Low out-of pocket costs for upkeep, while you build equity.

This is what I am doing with my home. I can afford to do a 15-year mortgage instead of a 30 (and I still pay extra to pay down principal every month on top of that), so I *am* paying a bit out of pocket. If I were on a 30, I would be pocketing approximately $100 / month, which would completely cover the cost of upkeep. I lived in my house just under 2 years (got put on assignment when I had only been on station 7 months). I have rented it out since then. In about 5 more years, I will own my 1st house free and clear, while paying full mortgage for 2 years, and approximately $2500 / year out of pocket for a 12 years. Not an entirely bad deal, if you ask me.

House value (purchase): 174,000
House value (current): 195,000 (according to Zillow)
Down payment: 30,000 (I had deployment money)
Mortgage payments (self): 31,200
Out-of-pocket expenses while renting (estimated / projected): 30,000
Total investment: 91,200.

Also, keep in mind, that had I been paying the entire mortgage myself, total payments would have been approx 275,000

(these numbers, of course, include taxes and insurance for ALL figures).

There are a lot of variables to consider, chief among them current equity in the home, current financial need, and current rental market. But, all things being equal, generally speaking, renting it out is a GREAT way to build wealth for (almost) nothing. Especially since you can get a second VA loan (and even a third, sometimes)at your next duty station to buy a new house there.

Response by Lt Col John (Jack) Christensen made Jun 10 at 2021 6:40 PM

2021-06-10T18:40:26-04:00

All depends if you want to return to the area. If you do rent, if you don't, sell. As others mentioned, renters can be tough so find a property manager you trust before leaving the area if you go the rental route.

Response by Sgt Karen Schleif made Jun 10 at 2021 7:47 PM

2021-06-10T19:47:20-04:00

Best thing to do is contact a professional and get some real numbers on selling vs renting your house. This is vital for making quality, informed decisions. It's important to find someone who has your best interest at heart and not their own. A true professional will provide you with the data and insight that you need so you can do what's best for you and your family. Watch out for the person that just wants you to sell so they can get a commission.

This information shouldn't cost you anything except time, but it will be time well spent. Deciding what to do with your home is a huge decision and could lead to financial blessing or financial stress.

Every market is different, and everyone's financial situation, circumstances and goals are different so there is no straight generic answer.

If you need help finding someone, message me and I'll see if I can find someone in my network of associates in your area that can help you.

Hope it all works out for you!

Response by Sgt Private RallyPoint Member made Jun 12 at 2021 5:20 AM

2021-06-12T05:20:27-04:00

Just some basic food for thought in regards to renting. In an ideal world you are able to find a solid property management company and will have good income that can be mostly passive. However there can be a lot of headache that comes with it. Finding and keeping quality tenants, evictions, the loss of potential income of the property sits vacant and is not generating income. The list can go on and on with issues you’ll run into in regards to tenants. Property management companies can be hit or miss. They can either make your life easy or can create extra headache for you. There’s pros and cons to renting but like anything it’s best to gather all the information you can and decide which option ways out the other. Best of luck to you though!

Response by SP5 Andrew Jackson made Jun 25 at 2021 10:56 PM

2021-06-25T22:56:22-04:00

rent never sell it will always go up

Response by PO2 Mike Vignapiano made Jun 27 at 2021 2:09 PM

2021-06-27T14:09:12-04:00

Consider this, selling in this market would maybe get you a profit, but you're going to spend that elsewhere also. Renting it will show extra income if you're considering buying at your next location. To increase your odds of a your current place not getting ruined, I strongly advise you find a property manager. They usually charge about $200 to get a tenant then 10-15% of the rent monthly. They should perform at least quarterly inspections to ensure tenants are keeping the place clean and aren't destroying the place.