Too often, military families feel like home ownership is out of reach. Maybe they’ve heard of friends being upside-down on a house in a bad market, desperate to sell. Or perhaps they struggle to find and keep renters in their home once they move away. Because of horror stories like this, many military families choose to be long-term renters until they can put down permanent roots.
Because military families often have compressed timelines and additional stresses to consider when buying a home, such as an unfamiliar city or upcoming deployments, they are at additional risk of making critical errors early on in the process. Fortunately for prospective military home-buyers, these worst-case scenarios are preventable, and home ownership can be a personally and financially rewarding experience if approached properly. Here are the top five mistakes to look out for if you are a military family considering a home purchase and, more importantly, how to avoid them!
Mistake No. 1 — Starting the Process Too Late
While some people are apt to wait until they arrive at their new installation to start house hunting, this rarely works out well.
On average it takes between 30 and 40 days to close on a home. But the military only offers you ten days of “free” temporary lodging. That means you have to account for 20-plus days of out-of-pocket living expenses. That can get expensive, stressful, crowded, and frustrating in a hurry.
Solution: As soon as you have an inkling you’ll be PCS’ing, start looking for a new home. Once the official orders arrive, you’ll be able to begin the process of buying or renting a home. That way, when you finally arrive at your new base after spending 50 hours driving across the country, you can skip temporary lodging and move straight into your new place.
Mistake No. 2 — Buying a House When You’re Not Financially Ready
The VA Loan is a benefit that makes home ownership a real possibility for many military families. But buying a house means you’re also buying into a lot more responsibility.
Air conditioning units break and water heaters tend to explode. Natural disasters CAN happen to anyone, and kids sometimes hit baseballs through windows. That’s life. And it’s pretty expensive sometimes. Putting all those home expenses on credit probably isn’t the best choice.
And then the military will ask you to move once again, and you could suddenly find yourselves paying a mortgage on two homes because your old one hasn’t sold yet.
Solution: Before you buy a home, make sure you have a robust emergency/rainy day fund built up. That financial cushion will allow your family to take care of home emergencies without your finances spiraling out of control.
Mistake No. 3 — Not Buying a House for the Long Game
This is probably the biggest mistake military home buyers make. Homes appreciate (gain value), but it takes years to see the value increase. Location impacts this significantly. But buying a home with the expectation you’ll be able to sell it for a profit in just a couple years when you get new orders isn’t very realistic. If you’re selling after only a few years you’ll be lucky to break even, and you’ll be more likely to lose money on the transaction.
Solution: When buying a home, buy it with the long game in mind. That means being prepared to become a military landlord the next time you PCS. Selling too soon might result in the loss of thousands of dollars, whereas renting the property ensures that the mortgage is covered by tenants and you can continue to build equity. Military homeowners have to think beyond the two or three-year planning horizon that is typical for military families.
Mistake No. 4 — Buying in the Wrong Market or Neighborhood
You always hear real estate agents talking about “location, location, location!” There’s a good reason for that. A home that’s in a desirable neighborhood for your family doesn’t mean it’s desirable to everyone else.
You also have to consider the market. Are there enough people moving to and from the area to support you being able to rent or sell your home? Is the market over-saturated with homes, making yours just one of the thousands up for sale? Not enough demand can be bad, but too much supply can be worse.
Solution: When buying a home, think beyond your family and your circumstances. You might love living out in the country, but many other families might not want to live so
far from the installation. A downtown loft might be ideal for your family, but too expensive and too cramped for many other families. Think about your potential buyers and renters before committing to a new place.
Mistake No. 5 — Buying the Wrong House
Yes, that is a thing. Just because you like a house, doesn’t mean other people will. When buying a home at your new installation, keep in mind that it’s not going to be your forever home. Even if you plan on coming back to it in the future, you need to have a plan for what you’re going to with it in the meantime.
Solution: When buying a home, think beyond your family and your circumstances. You might love having a split level home with only two bathrooms, but that could be an absolute deal breaker for many other families. Ask yourself, “What is desirable about this house to the general population? What is undesirable about it?”
Considering what would be desirable to other families before committing to a house will help your chances of selling or renting out your home when it comes time for you to PCS again.
Buying a home while still serving in the military can be risky, but when done properly it comes with the reward of long-term financial stability. Do your homework, keep the potential hazards in mind, and find a savvy agent. So long as you avoid the common mistakes that military families sometimes make, you too can own your very own piece of the American Dream!