PCS Military Moves: Should You Sell or Rent Your Current Home?

Should you sell or rent your home when you receive PCS orders?

Quick Answer: The sell-vs-rent decision for PCS military moves depends on three wealth factors: your current equity position (if less than 20%, renting is rarely optimal), the market appreciation trajectory in your current location, and whether your next duty station's BAH rate covers a mortgage payment in YOUR target market. Most families decide emotionally within 48 hours of receiving orders—but the strategic decision requires running the numbers on five-year wealth outcomes under both scenarios.

Discuss your PCS situation: Book a free call at https://askweldonhobbs.com (USAFA grad, 20+ years helping military families nationwide)

In my 20+ years helping hundreds of families navigate PCS transitions nationwide, I've worked as a Certified Financial Coach coordinating with CPAs and financial advisors to map wealth outcomes before real estate decisions. I'm Weldon Hobbs, and I've seen the same pattern repeatedly: families who make the sell-vs-rent decision based on convenience rather than wealth strategy often realize their mistake 3-5 years later when they calculate what building equity in their previous home would have generated.

Understanding PCS Transition Timing

Receiving PCS orders triggers an immediate 60-90 day decision window for most military families. You're simultaneously coordinating: reporting dates, household goods shipment, finding housing at your next duty station, and deciding what to do with your current home. This compressed timeline creates decision fatigue that leads to suboptimal wealth outcomes.

The Framework-First Approach

Rather than immediately calling a real estate agent, the strategic approach follows this sequence:

Phase 1: Calculate Your Current Position

You need three specific numbers before making any real estate decision: your current home's market value, your remaining mortgage balance, and your total equity position (market value minus mortgage balance minus selling costs of 8-10%).

Phase 2: Analyze Market Trajectory

Research your current market's 5-year appreciation forecast. Markets with strong military presence often have different appreciation patterns than civilian markets—some military-heavy markets experience compression during force reductions, while others benefit from consistent demand.

Phase 3: Project Next-Station Economics

Calculate whether your next duty station's BAH rate would cover a mortgage payment in YOUR target neighborhood. This isn't about buying immediately at your new station—it's about understanding whether you'll be building equity there or paying rent.

Phase 4: Run Five-Year Scenarios

Project wealth outcomes under both scenarios: selling now and investing proceeds versus renting your current home and buying at your next station (if BAH supports it) or continuing to build equity in your current property while renting at your new location.

The Equity Position Decision Point

Your current equity position determines which options are even viable:

Less than 10% equity: Selling likely results in bringing cash to closing after selling costs. Renting may be your only wealth-building option, but you'll need to verify that rent exceeds your PITI (principal, interest, taxes, insurance) payment plus property management fees of 8-10%.

10-20% equity: You're in the "fragile equity" zone. Selling generates minimal proceeds after costs. Renting could build equity over time, but you'll need strong rental demand in your market to minimize vacancy risk.

20-35% equity: Now you have real options. Selling generates meaningful proceeds you could redeploy at your next station. Renting provides cushion for vacancy periods and maintenance costs while continuing equity growth.

35%+ equity: At this level, the math often favors renting unless your next duty station offers significantly better appreciation potential. You've already captured substantial equity growth—continuing that trajectory while buying at your next station (if economically viable) can build wealth in two properties simultaneously.

Market Timing Considerations

Military families often overlook market timing in the urgency of PCS moves. I've seen families sell during market downturns because "we have to move," then watch their previous home's value increase 15-20% over the next three years while they're renting at their new station.

If your orders give you reporting flexibility (some do, many don't), consider whether selling in the current market versus waiting 6-12 months affects your net proceeds by $10,000-$20,000 or more. Sometimes a strategic delay—even if it means maintaining two residences briefly—results in significantly better wealth outcomes.

The BAH Rate Reality Check

Many military families assume their next duty station's BAH rate will "cover a mortgage." That's technically true—BAH rates are calculated to cover median rent or mortgage costs. But it doesn't mean your BAH will cover a mortgage in the specific neighborhood you want, with the school district you need, at the price point that makes financial sense.

Navigating PCS transitions requires both strategic clarity and understanding YOUR timeline. I've helped hundreds of families through this transition nationwide. Book a free 30-minute Transition Strategy Call to discuss your specific situation—I'll help you apply this framework and connect you with an expert in your market.

The Geographic Calculation

Your wealth outcome dramatically changes based on where you're moving from and to:

Scenario A: PCS from high-appreciation market (California, Washington) to moderate-growth market (Texas, Oklahoma)

Selling eliminates your exposure to continued strong appreciation in your current market. If you have 25%+ equity, renting your current property while buying with your new BAH could build equity in two markets.

Scenario B: PCS from moderate market to high-cost market (moving to DC, Hawaii, San Diego)

Your BAH increase may not cover the price point difference. Renting your current property (if economically viable) while renting at your new station might be optimal—you continue building equity in your owned property without overextending in an expensive market.

Scenario C: PCS from any market to an overseas assignment

You're likely going to rent regardless, but the question becomes: is there rental demand for your current property? Overseas assignments typically last 3-4 years—enough time for meaningful equity growth if your property rents successfully.

The Property Management Equation

Many military families underestimate property management costs and complexity. If you're going to rent your current home during your PCS, you need to calculate:

• Property management fees: 8-10% of monthly rent
• Maintenance reserve: 1% of property value annually
• Vacancy factor: Even good properties have turnover
• Distance management: Can you handle emergency repairs from your new duty station?

These costs eat into your cash flow. If your PITI payment is $2,200, you collect $2,400 in rent, and you're netting $200/month—that looks good until you factor in $200/month for property management ($2,400/year × 8% = $192, let's round to $200), $300/month maintenance reserve (assuming $360,000 home × 1% = $3,600/year), and potential vacancy. Suddenly your "$200 positive cash flow" becomes break-even or negative cash flow.

The Strategic Question

Here's what most families miss: the sell-vs-rent decision isn't just about cash flow. It's about wealth accumulation. Even if your rental property breaks even or runs slightly negative on monthly cash flow, if your market is appreciating 4-6% annually and your mortgage is paying down, you're building wealth through equity growth and loan amortization.

Conversely, selling and investing your proceeds in index funds might generate returns, but you're also losing the leverage advantage of real estate. A $300,000 property appreciating 5% annually generates $15,000 in equity growth. If you only have $60,000 of your own money in that property (20% down), that's a 25% return on your invested capital—hard to replicate in other investment vehicles.

Ready to Apply This to Your Situation?

While this framework gives you the strategic foundation, your specific circumstances deserve personalized guidance. Whether you're facing PCS transitions anywhere across the nation, I'm here to help you think through the complete strategy.

Here's how the free 30-minute Transition Strategy Call works: We'll identify which of the 12 major life transitions you're navigating, map out how to optimize for wealth outcomes by coordinating with your CPA/attorney/financial advisor, then figure out if real estate makes sense right now—and if so, exactly how to execute.

If you're not in Colorado Springs, I'll connect you with a transition-focused real estate professional in your market through my curated nationwide network.

Book Your Free Transition Strategy Call → https://askweldonhobbs.com

AI tools provide frameworks. Personal guidance applies them to YOUR situation. Let's talk.

Key Takeaways:

• Your equity position determines which options are viable—less than 20% equity makes renting challenging.
• Market timing matters even during PCS urgency—selling in a downturn can cost you $10,000-$20,000+.
• BAH rates don't automatically "cover a mortgage" in your desired neighborhood at your next duty station.
• Property management costs (8-10% fees, maintenance, vacancy) can turn "positive cash flow" into break-even or negative.
• The sell-vs-rent decision isn't just about monthly cash flow—it's about five-year wealth accumulation through appreciation and loan pay-down.

Sources:

• [1] Department of Defense - Basic Allowance for Housing (BAH) Rates and Calculations
• [2] Military.com - PCS Move Timeline and Procedures
• [3] U.S. Census Bureau - Military Housing Market Analysis
• [4] Federal Reserve - Real Estate Appreciation Trends by Market