Buying a home under any circumstances has been identified as one of the most stressful situations that you can go through in your life time. It is a major decision that should not be entered into lightly. On the other hand, everyone dreams of owning their own home.
When we think of a home it signifies happiness, love, a family, and a sense of permanence. Everything will be alright if we have our own home. Stop the fantasy! If you are not prepared for owning a home and all the upkeep that goes with said home, you are courting disaster. This should be abundantly clear after the recent recession when millions of people faced foreclosures, short sales and bankruptcy. Millions more who avoided losing their home are underwater with their mortgages. Underwater is a term for owing more than their home is worth due to drastic declines in property values. Families who are permanently located and rooted in the area where they own their home can wait out their property value. Sooner or later it will once again rise in value. If you are in the military and own a home in an area where the housing market has drastically declined you don’t have the luxury of waiting it out if you get a permanent change of station (PCS) notification.
Nevada has been number one in the nation for foreclosures followed closely by California, Arizona and Florida since the start of the recession which began in 2007. An article in the Las Vegas Review Journal (May 12, 2011 section A) states that 1,000 military members stationed at Nellis AFB were facing military consequences due to foreclosures and bankruptcy directly related to owning their own homes, receiving orders and not being able to sell their homes in the downed economy. For them, the home ownership fantasy turned into a nightmare. Rank will likely be affected, security clearances are at stake, and personal finances are in shambles.
Think long and hard if you want to buy a home while on active duty. It takes between 3-5 years just to recuperate the costs associated with closing on a home. Are you sure you will be stationed at your current installation that long? Do you know the market where you live? You should never buy immediately upon arriving in the area. Spend at least three or four months renting so you can learn the housing market in the area you are assigned. How stable is the economy? On the positive side, you will receive your basic housing allowance whether you accept base housing or buy a home and that should cover your payment. But can you afford a loss on your home? Are you willing to leave your family behind if you receive orders and are having a difficult time selling you home? Renting out your home sounds like a good idea until the renters stop paying and you have to return to start legal proceedings.
This blog is not to say “Do not buy a home if you are in the military”. It is to say “Do your homework and act with caution.”