Should You Rent Out or Sell When You PCS?

Sell it, unless you have a specific reason to keep it. That is the honest default for most Fort Bliss families who get orders, and I know it is the opposite of what you hear at the gym and in the unit, where everybody has a friend who kept three houses and now owns a small empire.

Keeping the house can absolutely be the right move. I have helped clients do it and I have watched it work. But it works when four things line up at once: the rent covers the real cost, you are inside the tax window, you can absorb a bad month from a thousand miles away, and you do not need your Department of Veterans Affairs entitlement back for the next duty station. Miss one of those and you are usually better off closing the chapter cleanly.

Here is how I would actually work through it.

Does the Rent Cover the Payment, or Does It Cover the Cost?

Those are two different questions and almost everyone answers the first one and stops.

In El Paso, rent generally does cover principal, interest, taxes and insurance on a house bought at or under the median. That is not true in most of the country, and it is the single strongest argument for keeping a house here. Rents near post are anchored by housing allowances, so demand does not evaporate, and Fort Bliss keeps sending new families into the same rental pool you would be listing into.

But covering the payment is not the same as covering the cost. Your real annual cost as a landlord includes:

• The mortgage payment, taxes and insurance
• Property management, if you use it
• Vacancy between tenants
• Maintenance and the appliance that dies on a Tuesday
• The tax filing that now has a Schedule E on it

Run it as an annual number, not a monthly one. If rent beats the payment by $150 a month, that is $1,800 a year, and a single water heater, one turnover, and three weeks of vacancy will erase it before you notice. A house that "cash flows" by a small margin does not cash flow. It just has not sent you the bill yet.

Also, be honest about your insurance. A landlord policy is a different product than the homeowners policy you have now, and it usually costs more. Tell your carrier the truth about occupancy. If you do not and something happens, you find out that the policy was the cheapest part of the mistake.

The Tax Clock That Is Genuinely in Your Favor

This is the part where military families have a real advantage, and it is the thing most likely to change the answer.

Normally, to exclude the gain on the sale of your home from federal capital gains tax, you have to have owned and lived in it as your primary residence for two of the last five years. That is $250,000 of gain excluded if you are single and $500,000 if you are married filing jointly. If you rent your house out for three years and then sell, the two out of five test fails and the exclusion is gone.

Service members get an extension. If you are on qualified official extended duty, generally orders of more than 90 days at a duty station more than 50 miles from the home, or living in government quarters under orders, you can suspend that five year test period for up to ten years. In practice that means you can rent the house out for years, still come back and sell it, and still take the exclusion.

Two cautions, because this is tax law and I am a REALTOR, not your certified public accountant. Depreciation you claim while it is a rental is recaptured when you sell regardless of the exclusion. And the suspension is not automatic paperwork magic. Talk to a tax professional who has actually handled a military client before you build a plan on it. I go deeper on the general Texas version of this in the guide to avoiding capital gains tax when you sell in Texas.

The practical upshot: the tax clock is rarely the reason to sell for a military family. It is usually the reason you can afford to wait and see.

What Property Management Actually Costs

Budget 8 to 10 percent of collected rent for monthly management, plus a leasing fee when they place a tenant. The leasing fee is commonly half a month's rent to a full month's rent. Some companies add a lease renewal fee, a maintenance coordination markup, and an inspection fee.

Put a realistic version of that on paper. If a manager takes 10 percent of the rent every month, and takes most of a month's rent every time a tenant turns over, and your tenants stay an average of two years, you are giving up something in the neighborhood of 14 percent of gross rent across the life of the arrangement. That is fine if the property still works. It is fatal if your margin was $150.

Self managing saves that money. It also means you are the person answering the phone at 9pm from a different time zone, screening applicants, understanding Texas landlord obligations on repairs and security deposits, and eating the legal cost if you get an eviction wrong. I have seen people self manage successfully. Every one of them had family in El Paso.

Being a Long Distance Landlord Is a Job

Renting out your house is not passive income. I want to say that plainly because the internet says otherwise.

It is a small business with one customer, one asset, and a fixed obligation to a lender. Your tenant will not call about the good months. You will make decisions about a $4,000 repair based on photographs. You will get an appraisal notice in the spring and have to decide whether to protest from Fort Campbell or Fort Carson. You will replace flooring you never see.

Some people are wired for that and genuinely enjoy owning something. Some people are already handling a permanent change of station, a spouse's job search, school enrollment, and a household goods shipment that arrived broken, and the last thing that marriage needs is a rental in another state. That is a legitimate reason to sell, and it is not a financial failure.

Your Veterans Affairs Entitlement Stays Tied Up

If you bought with a Veterans Affairs loan and keep the house, that entitlement stays in use. You are not automatically shut out of a second Veterans Affairs loan, because remaining entitlement can often be used at the next duty station, but the amount available is calculated against county loan limits and you may need a down payment on the second purchase. Full restoration generally requires selling the property or having a qualified buyer assume the loan with substitution of entitlement.

That matters a lot if you are heading somewhere expensive. Keeping a $230,000 house in El Paso to protect a small monthly margin, and then discovering you need $40,000 down in your next market, is a bad trade. I walk through the mechanics in can you use a Veterans Affairs loan twice, and if you have a low rate that a buyer could take over, read how Veterans Affairs loan assumptions work in El Paso before you list, because that low rate is a selling feature.

One more thing on the loan side: renting out a house you bought with a Veterans Affairs loan is allowed once you have satisfied the occupancy requirement, and orders are an accepted reason to move out. Nobody is going to accuse you of anything for renting it after a permanent change of station.

When Selling Is Simply Cleaner

I would sell when:

• You have owned it two or three years with little or no money down and the equity barely covers the cost of sale. Selling now is painful, and it will be just as painful in five years if the rental drained you. Get a real number first with the what is my house worth in El Paso walkthrough.
• You need the proceeds for the next purchase.
• You are separating from service and about to change income structure.
• The house has deferred maintenance you have been carrying. A tenant will find every bit of it and you will fix it at retail from far away.
• You would lie awake about it. This is a real criterion. Money you make at the cost of never sleeping is not a good return.

I would keep it when the rent clearly beats the true annual cost, the rate on your loan is low enough that the loan itself is an asset, you have three to six months of reserves that are not your emergency fund, and you can imagine coming back to El Paso. Plenty of families do come back to Fort Bliss.

If the answer is sell, do not try to do it in the last three weeks before you report. The timeline pressure of a permanent change of station is exactly how people leave money on the table. I lay out the sequence in selling a home during a permanent change of station, and the broader El Paso rental picture is in the El Paso rental and investment property guide. If you want a person to talk it through with, that is what the military and veteran page is for.

Frequently Asked Questions

Should I rent out my house or sell it when I get PCS orders?

Sell unless the rent clearly beats the true annual cost, you have reserves, and you can stand being a landlord from a distance. In El Paso rent usually covers principal, interest, taxes and insurance, which makes keeping it more viable here than in most markets, but a thin margin plus one turnover is not income.

Can I rent out a house I bought with a Veterans Affairs loan?

Yes, once you have met the occupancy requirement, and a permanent change of station is an accepted reason to move out. The loan stays in your name and the entitlement stays in use until the property is sold or the loan is assumed with substitution of entitlement.

How long can I keep the capital gains exclusion if I am on active duty?

Service members on qualified official extended duty can suspend the five year lookback period for up to ten years, which lets you rent the house out and still meet the two out of five year test when you sell. Confirm the details with a tax professional, because depreciation recapture still applies.

How much does a property manager cost in El Paso?

Plan on 8 to 10 percent of collected rent monthly, plus a leasing fee of roughly half a month's rent to a full month's rent each time they place a tenant. Renewal, inspection and maintenance coordination fees are common additions.

Can I get another Veterans Affairs loan if I keep my current house?

Often yes, using remaining entitlement, but the amount available is calculated against county loan limits and you may need a down payment at the next duty station. If the next market is expensive, that constraint alone can decide the question.

What if I do not have enough equity to sell?

Then renting may be the practical choice rather than the strategic one, and that is fine as long as you go in knowing it. Get an honest valuation and a written cost of sale estimate before you decide, because the gap is sometimes smaller than people assume.

The Bottom Line

The rent versus sell question is not really about real estate. It is about whether you want to run a small business in a city you no longer live in. El Paso happens to be one of the better places in the country to try it, because rents hold up against our prices, and the military tax rules give you room to change your mind for up to ten years.

If you have orders and want the real numbers instead of the barracks version, send me your address and your timeline. I will give you a current value, a realistic cost of sale, and an honest read on what the house would rent for, and you can decide from there.