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The Next Move: Renting versus Selling

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by Bianca Strzalkowski

There is an entire checklist that helps guide a military family through relocation, from organizing the movers to finding housing at the next duty station.

There are always unknowns, but proactive planning eases the stress of Murphy taking over. An equally important part of that PCS-prep is what to do with your current dwelling if you happen to be the owner of that house.

Service members and their spouses are often briefed on the ins and outs of researching where to live, but that big ticket item that has your name listed on the mortgage also requires attention. Home ownership can be a rewarding investment, and making a sound decision as to whether to rent out your home or sell it outright when you get those orders can have serious financial implications. Real estate agent Brian Alvarado, who is a Navy spouse in the San Diego area, says the decision-making process should start a few months out depending on the market where you live.

“Avoid putting additional stress on yourself before you need to,” he says. “Real estate is very much an industry that varies market to market so if we’re talking about 29 Palms Marine Corps Base, they might need a little bit more time because there’s less of a demand for housing than here in San Diego. I would say at least 3-4 months out, make sure you’re communicating with a real estate agent.”

Finding a property manager or real estate agent.

There are roughly two million active real estate licensees in the United States, according to the Association of Real Estate License Law Officials. That’s a lot of people to choose from, so how do you decide on who to work with? Alvarado, who has worked in the industry for eight years, recommends leaning on your network.

“So the majority of our business comes from our sphere of influence — our network of people,” he says. “I always tell people when talking about this — ask the people you know. Ask the people around you what their experiences have been, and if you’re in a situation where you don’t have that option, you can always use Google.

“Anybody who’s a good real estate broker is going to have a lot of information available on the Internet. You’re going to be able to get to know them, people like me have our social media accounts public for that purpose. If somebody is looking for someone to represent them in one of the biggest purchases of their lives, I want them to be able to get to know me. Ask for referrals or do your research online,” he adds.

The relationship between homeowner and property manager or real estate agent is one that will require setting expectations from the onset. Don’t be afraid to take an agent through the interview process to establish that they are the right fit for your needs. Examples of questions to ask are:

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What is their experience managing properties or selling homes in the area?

How much time do they have to commit to you? What methods of communication works best for the two of you – email versus phone, especially if you will eventually be out of the area.

Can they provide references for clients they have worked with in the past?

Establish savings for unforeseen costs

If you end up on the route of renting the home to tenants, it is necessary to create an account for costs. As the landlord, you will be directly responsible for making repairs that come up and emergency situations will require a quick turnaround. For example, if an air conditioning unit breaks in the summer that will need to be fixed immediately. Plus, there may be other fees associated with this choice, such as homeowner association dues, property manager fees, and any upkeep not charged in the rent (i.e. lawn care).

On the other hand, if you decide to sell the home, you’ll need to prepare for the possibility that it may sit on the market for a while — leaving you responsible for those monthly mortgage payments. A vacant home isn’t going to pay for itself. Either way, the financial aspect of selling or renting needs to be factored into the overall moving budget.

Weigh the pros and cons as they relate to your situation

As with any financial decision, it is a very personal choice that doesn’t have a straightforward path to an answer. Military families move, on average, every 2-3 years, making them resident experts on all things housing-related. There are plenty of success stories that support either path, but at the heart of achieving that is a well-thought out plan based off your needs, your finances, the area your home is in, and if you want to continue the investment of a property. Ask your real estate professional to conduct a comparable market analysis to give you an idea of if you can afford to sell your home, then build the plan according to your lifestyle.

Other tips:

  • Crowdsource on social media for recommendations of agencies to work with
  • Research reviews for real estate agents in your area
  • Ask other military families for their experiences in renting a home out versus selling it
  • Evaluate your finances for the next 12 months to see how either decision fits in your budget
  • Discuss with your partner any long-term goals with the property