9 Things to Consider When Deciding to Live On or Off Base

Do you buy or move on base?

I had a question the other day from someone regarding the buy or base housing question. They were looking at orders to a small remote military town (aren’t many of them) and wanted to know what they should do. She knew many people there who were having trouble with their rentals.  So the question was  really were their issues because of the lack of great systems (lease, deductible, reverse military clause, and not treating it like a business) or was it because of a non-changing issue like location.

Here are the tips that I would advise for anyone on the fence on the base/buy decision:

1. House Price to BAH Rate Ratio– Remember you want “oh shoot” money for cushion money. So your house needs to be $200-300 under the rental amount at a minimum. Make sure that you can cover your mortgage plus about $200.
2. Incoming Personal Preference– Do people moving to the area want to live on base, or in offered accommodations if you are not military?
3. What’s your competition? Are you offering a lesser quality home, at a higher cost and it’s further away? There is a great chance your house is going to have issues. The key is to have something in the house that the offered housing does NOT have. Therefore look at buying a house that would have qualities that are not be offered in base housing:
   • Larger Yard
   • More Bedrooms – At a minimum the military provides housing based on number of children. Therefore if you are able to offer a larger product at the same price than base you will get people who want the space.
   • Pool/3 Car Garage- In some areas these are must haves and in many more they are just nice. So having these items at the same cost as housing is a great bonus.
4. Utility Rates – How much are electricity and other utilities?  I know during our first summer my utility costs were half of my mortgage.  We still made money since we had such as great deal and high BAH to cover our costs. If your market is a known areas with high utility costs then there is a higher chance that people are going to live on base.
5. House Prices compared to BAH– If the BAH is very low then it is going to be hard to make the numbers work because houses are only “so” cheap in most areas. Often time areas with smaller BAH’s don’t make sense.
6. Location – How close are you to where the service members work? What is the commute from base housing? In some locations base housing is actually off base so this is an important question.  Commute time is important.  If your house is the same commute and cheaper then great! If your house is a longer commute and more expensive than base housing than that may be an issue.
7. Reputation of Base Housing– We spouses all gossip to get the “down low on the base” before we move. I know we didn’t even look at base housing at some of our previous duty stations because of the gouge or gossip. While I don’t suggest that because it has burned us in the past, if the reputation for one is better than the other, that can make a difference.
8. Appreciation– It is important that your area will appreciate over time to keep up with inflation. Costs go up therefore so does your rent. If it doesn’t you could have an issue over time as things will break and need to be replaced on the new price but your won’t have the emergency funds.
9. Age-  Everyone loves new fresh and clean homes with all the upgrades. If your house is older than most then the cost of maintenance will be significant. If the market does not go up in value then it will be hard to have these upgrades count.

YES I am an avid advocate of buying but it won’t make sense everywhere. Even if it does make sense at one house type it probably won’t at another. Therefore it is important to do your research. Here are my building blocks on what I look for in order to make the buy or rent decision.

Am I missing any factors one should compare between provided housing and using the stipend to buy a house?