Well, good news, BAH rates have increased for 2015 across the board! Some by as much as $40, some as much as $115! And, by the way, BAH is the acronym most military personnel have become accustomed to using which simply stands for Basic Allowance for Housing. Military members who are assigned to a permanent duty station within the 50 United States, and are not furnished with government housing (whether due to availability or by choice) are eligible for BAH, based on rank, dependency status and permanent duty station zip code. Some units have local rules about eligibility as well.
Another fun fact, BAH is tax free income. Which means, for instance if your pay grade is E-4 or below and you're stationed aboard Camp Lejeune in 2015, you can receive $948 a month (unless you have dependents, then it's more!) to cover the cost of rent, tax free. Sometimes you may incur out of pocket expenses if your bills are more than your allowance. Budgeting can help alleviate that though!
So now, you're planning to live "out in town" or "off base" and you're receiving $948 every month (or $11,376 a year!) to cover your living expenses. What if you used this TAX FREE money to purchase a home, instead of renting? Let's face it, you're going to be paying someone's mortgage, whether you're renting or buying, right? So what would it look like, if you allowed the military to purchase your house for you? It's the same amount of money every month, except by purchasing, you're making your money work for you by investing it in your own home. With the current interest rates (as of today, December 22, 2014,) $948 a month will afford you about a $145,000 home, depending on taxes and insurance.
The reason I suggest this course of action, is mostly because I've done it, and I was able to invest, re-invest, and earn passive income (that's money I get every month without working, because someone is paying me to live in one of my houses!) ten years later, simply by buying a house using my BAH. (True Story!!)
If you are not living in the barracks or in base housing, you are getting at least $11,000 a year for living expenses. Use it wisely or pay someone to live in their house.
The choice is yours!
We'd love to help you, whether you decide to rent or buy and you can check out available homes here! Give us a call for a free consultation to explore your options and talk about the home buying process, the Jacksonville real estate market, or investing in real estate! 910.545.0450 Click here to see the new BAH Rates for 2015!
**Just an update- had some questions about who will be receiving an increase in BAH and some discussion about certain service members not because of time in service. According to this DOD bulletin, the BAH change is across the board. Obviously the amount is dependent on location, rank, and whether the service member has dependents or not.
