PCS move (Permanent Change of Station) orders are part of the military lifestyle, but no matter how many times you’ve moved, the question of what to do with your current home doesn’t get easier. Should you sell the home and cut ties? Or rent it out and potentially build long-term wealth?
The decision isn’t one-size-fits-all. It depends on several key factors that are worth weighing carefully before determining the fate of your home.
Financial Considerations
When orders for a military move drop, the financial side of the move is usually top of mind. Your current home might be one of your most significant assets—or your biggest financial stressor. Whether selling your home or renting it is smarter often comes down to your equity, local housing prices, and how comfortable you are managing the costs of a rental from afar.
Selling Your Home
- Equity and market conditions: If your home has appreciated and you have solid equity, selling can unlock cash for your next home or boost other financial goals.
- Avoiding landlord responsibilities: Selling allows you to move forward without the complications of property management or tenant issues.
Renting Out Your Home
- Income potential: Renting can provide a steady stream of income, potentially covering your mortgage and even yielding profit. Hello, passive income!
- Long-term value: Holding onto the home may mean future appreciation, especially if the current market is soft.
- Tax advantages: As a landlord, you can deduct certain expenses like mortgage interest, insurance, maintenance, and property taxes.
Emotional Attachment and Future Plans
Your house isn't just a roof over your head; it's a home full of memories. But nostalgia alone shouldn’t drive your decision. Consider whether your current location will be part of your plans to return to the area one day or if you're ready to make a clean break.
Selling Your Home
- Sense of closure: Selling gives you a clean slate, especially if you don't plan on getting orders to return or can't see yourself retiring in the area.
- Letting go: Emotional detachment can be challenging, but may be necessary to reduce mental clutter and stress during your military move.
Renting Out Your Home
- Option to return: Keeping the home gives you a place to return to if the military sends you back.
- Emotional comfort: For some, holding on to the home offers a sense of continuity and peace of mind.
Housing Market Dynamics and Timing
Real estate is all about timing and location. Whether it's a buyer's or seller's market could determine your decision. A "sell my home calculator" can help estimate how much you make when you sell, but military moves often come with tight deadlines, which can affect your options.
Selling Your Home
- Favorable market conditions: If it’s a hot housing market, you might walk away with a great sale price.
- Time pressure: PCS orders rarely leave wiggle room for strategic selling. You may have to move fast, even if the market isn’t ideal.
Renting Out Your Home
- Strong rental demand: Military-heavy areas often experience a consistent demand for rentals as servicemembers are constantly coming and going.
- Market patience: Renting buys time until the market improves for you to sell later at a better price.
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Legal and Tax Implications When Selling or Renting a Home
There are legal and tax considerations that come with both selling and renting. Understanding capital gains tax exclusions and landlord responsibilities can help avoid any unwanted surprises.
Capital Gains Tax
- If you’ve lived in your home for two of the past five years, you may qualify for a capital gains tax exemption. The good news is military members can suspend that five-year rule for up to 10 years during extended duty.
Landlord Responsibilities
- Renting comes with legal obligations, including security deposits, tenant screening, maintenance timelines, and more.
- If you’re not local, hiring a property manager can help—but it will cut into your profits.
Fair Housing Act (Sellers and Landlords)
- Both sellers and landlords are required to follow federal Fair Housing laws, which prohibit discrimination based on race, color, national origin, religion, sex, familial status, or disability.
- How you advertise your property, interact with buyers or tenants, and handle offers or applications must comply with these laws. Violations, whether intentional or accidental, can lead to serious legal consequences.
Personal Readiness and Lifestyle
Even if the numbers work out in favor of renting, not everyone wants to be a landlord. And even if selling feels like the easiest option, you could miss an opportunity to grow wealth through real estate. Ultimately, your lifestyle, stress tolerance, and goals are all factors you can't afford to overlook.
Selling Your Home
- Simplicity: Selling frees you from long-distance property concerns and gives you a fresh start.
- Mobility: Without a property tying you down, you’re more flexible to buy or rent at your next duty station.
Renting Out Your Home
- Landlord mindset: It’s a business. Being a landlord requires attention to detail, communication with tenants, and handling problems in a timely manner as they arise.
- Investment strategy: Renting can be a smart long-term play, especially if your home is in a growing or stable market.
Deciding whether to sell or rent your house during a military move is personal—and, unfortunately, it’s rarely cut and dry. Weighing your finances, your attachment to the home, the real estate market, legal implications, and your long-term goals is the only way to make the decision. Take your time and don’t hesitate to consult with a real estate professional who understands the military lifestyle.
To dig deeper into this decision, check out our free guide below, PCS Ahead: Should I Sell or Rent My Home? It’s packed with practical advice tailored to military families facing this crossroads.
