Should Military Buy Or Rent When PCS’ing to Oahu?
February 12th, 2009 categories: Military
Given the amount of the high amounts of Basic Allowance for Housing (BAH) available for military transferees to Honolulu, there can be a dilemma concerning whether it is better to rent or to buy. Having had the chance to sell homes for many veterans that purchased while stationed here, I can tell you that a Honolulu home or condo turned out to be one of their best investments.
Let me explain. While they lived here they purchased a home using the monthly BAH to cover their monthly mortgage payments. When it was time to move, a property manager was hired and the unit was rented out. Initially, the cash flow may have been negative, but overtime, because of raises in rents, the property began creating a monthly positive income. Most of these former military people kept the home 20 to 30 years and at the time I sold the home for them, their Hawaii property represented one of the largest assets in their retirement investment portfolio!
Here is the downside to renting versus buying. While you live on Oahu you will be able to rent a much nicer home than if you purchased (the rental dollar goes much further than the buying dollar). The BAH makes you the Federal Government your partner in your home carrying costs for the term of your PCS on Oahu! So why not use this money to your advantage? By using the BAH at each of your PCS locations, over a 20 year career you could own 5 or 6 rental properties upon retirement! By purchasing while stationed on Oahu and again at your other postings, you could own over a $1,000,000 in real estate when you return to the private sector.
So, should you rent or buy? I know I am biased, but my recommendation is that you absolutely should buy! If you would like to discuss purchasing, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net too.
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