Should You Sell or Rent Your House When You Get Military Orders?

If you’ve followed me on Instagram for a while, you probably know these two things about me: I am a military spouse, and we own and rent our home from our last duty station. As a military wife who has been there, done that, I know all too well the stress of deciding if you should sell or rent your house when you get military orders. I thought I would talk a little bit about what that decision has looked like for us and what our recent experience with being a landlord has looked like. Should you sell or rent your house when you get military orders?

should you sell or rent your house when you get military orders

For those of you who are new here, Jason was Active Duty in the Navy for 10 years. He was a submariner, and these were our duty stations: Charleston, SC (2001-2003), Kings Bay, GA (2003-2004), Silverdale, WA (2004-2008), and Charleston, SC (2008-2011). He made the decision to separate from the Navy at the end of his enlistment in 2011, and we began our civilian life. Shortly after our move “home” to Georgia, he decided he missed serving his country and decided to enlist in the Navy Reserves. He has been a member of the Navy Reserves since 2011 and is currently a Chief Petty Officer.

We have owned 3 homes since we have been married: one in Kingsland, Georgia, one in Moncks Corner, South Carolina, and our current home in Augusta, Georgia. We initially rented our home in Kingsland but decided to put it on the market after a year. We were so lucky with that house! Shortly after we bought, the market boomed, and we sold quickly and made an excellent profit.

When we got orders back to South Carolina in 2008, we decided we wanted to buy. Base housing in Charleston is older and was at that time unrenovated. Because we didn’t have kids at the time, we would have qualified for a 2 bedroom despite the fact that he was higher ranking. Jason was teaching and really didn’t relish living with the students he taught, so we began to look off base. It made sense money wise to buy, so we leaped.

We closed on our house in January of 2008, and within months the market tanked. This was the height of the mortgage crisis, and our home value dropped almost $25,000 within 3 months of our purchase. By the time we needed to move, it hadn’t recovered, and selling would have meant we had to bring thousands of dollars to the table. Other friends we knew were taking a $10,000 check to closing, some were short selling, but we were hopeful that if we could just hold on to it that our value would improve over time.

We decided to sign a contract with a property management company since we would be living over 3 hours away. It made sense to have someone else be our eyes and ears. Our management company takes 10% of our monthly rent. They charged a one time fee when we signed, and they charge us for advertising when it is empty. We also pay a “bonus” when they place someone in our home.

THE GOOD

We’ve been very lucky to get renters promptly. We’ve had 3 renters over the course of 6 years. Our current renter has been living in the home for 3 years.

We’ve had good renters. They’ve all paid their rent promptly (knock on wood), and we’ve never had to deal (knock knock on wood) with excessive damages caused by a renter.

We have had an opportunity to pay down our mortgage.

Since we take a loss on the house (more on that later), we get tax breaks. I’m not sure what that will look like this year when we pay our taxes since the tax law has changed.

THE BAD

We take a monthly loss on the house. The amount we are currently able to charge for rent doesn’t fully cover our mortgage and the fee from the property management company. We are not making a profit. This is due in large part to the fact that our taxes more than doubled when we moved out of the home. My biggest advice would be to check on this before you make the decision to rent your home — our property tax went from 3% as residents to 6% when we moved out of the county.

We’ve had some high maintenance renters. I won’t really say more about that for privacy, but be prepared for phone calls about things that are serious and are not serious. Once I got called because my renter wanted maintenance to go out and change a light bulb. (I get charged $80 per service call, so that was fun.)

You need to have a pocket of money ready for repairs/lost rent/damages/etc. At any moment your renter could stop paying. Guess what? You can’t get them out immediately, and you have to pay the mortgage until they are out and you get someone new in. You have to pay the mortgage interim when someone moves out until someone moves in. When the house is empty, it’s still being sold, so you’ll also need to cover the electric and water. And then let’s talk about repairs…

REPAIRS

This is by far the most stressful part of being a landlord, but it is something you MUST prepare yourself for. Repairs will happen. They happen in the home you live in. They happened when you lived in the home you plan to rent out. It doesn’t mean your renter is tearing things up. It just means the house is aging.

Be prepared for repairs. Have some money set aside for emergencies. Make contacts with reputable HVAC companies, electricians, and plumbers. Your property management may have a company they use, but I’ve found many times it is easier and cheaper for me to make the arrangements on my own.

Our most expensive repair by far has been our HVAC unit. It kept going out this past summer, and almost monthly I had to pay for repairs. My husband and I finally decided to call in a second opinion, and when we did, we realized that in the long term it would be better to replace the unit. That was a tough repair to swallow, but it was necessary.

Our current dilemma is something relatively small, but we do need to address it. We have granite-looking laminate countertops in our kitchen (that was the style at the time). There is a place right above our dishwasher and on our island where the laminate keeps separating. We’ve reglued several times, but again, it may be wiser at this point to consider new countertops. I have a friend who recently replaced her countertop through Premier Surfaces, so I’ve been browsing their website for ideas and am thinking about reaching out for a quote. Premier Surfaces fabricates and installs custom countertops and surfaces. I like the fact that they have three decades of experience!

FINAL THOUGHTS

I really wanted this post to be truthful and transparent about the real advantages and disadvantages of being a landlord. It’s a whole new ballgame when you are a military member or spouse, trying to manage the rental of a home that is miles away. We can’t go to the house in person to check on our renters. We can’t personally handle repairs. It’s hard and it’s tough. I didn’t want to downplay that in any way.

However, it can sometimes be our only option. We don’t often get to choose when or where to move, and sometimes rental is the best financial choice. I would highly advise you to start by researching rentals in your market. What are homes your size, with your specs, renting for? Will the rental price you are able to charge (don’t forget your management fee!) cover your mortgage?

If it will, I would then start asking for recommendations for property management companies. Facebook is a great resource for this! Most bases have an active Facebook group, and that would be a great place to solicit advice.

Interview with a few management companies until you find one that feels like a good fit.

I also highly recommend marketing the property yourself. Your management company should put out ads and place it on the “market” but you can help by promoting it as well. AHRN is a good place to start.

I hope you found this a helpful resource as you start to make the decision about if you should sell or rent when you get military orders. If you have any questions, please let me know in the comments and I’m happy to answer!

This is a sponsored post. All opinions are my own.

Comments

  1. We bought our home once my husband decided he was getting off active duty status. I didn’t want to buy then have to rent it out or sell it. He is seperating the end of June and going reserves. What has the impact been on your family with your husband being a reservist? I have no clue what to expect but assuming it won’t be too terrible.

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