Deciding between buying or renting can be a dilemma, especially for military personnel who face frequent relocations. In this video, Dave and Rachel Ramsay address this issue, providing guidance to a soldier named Adam.
For individuals like Adam, who will be stationed in one location for only three years, Ramsay recommends renting. The reason for this is twofold: low appreciation rates and high days on the market (DOM) in military communities. Military communities often see a high turnover of residents, making it difficult to sell a home quickly and recoup the investment.
To determine if buying is a viable option, Ramsay suggests considering the average appreciation rate and DOM in the specific market. In areas with high appreciation rates (7-10%) and low DOM (less than 30 days), buying may be a worthwhile investment, potentially leading to a profit upon resale. However, in areas with low appreciation rates and high DOM, renting is a more prudent choice.
Ramsay also highlights the responsibilities associated with homeownership. Unlike renters, homeowners are responsible for all maintenance and repairs, which can add stress and financial burden, especially for those in demanding military roles. Renting offers a level of convenience and reduced liability, freeing up time and resources.
Ultimately, the decision between buying and renting depends on individual circumstances and market conditions. For short-term assignments like Adam’s, renting is generally the more practical option. However, for those with longer-term assignments or who are willing to navigate the potential challenges of homeownership, buying can be a smart investment in the future.