When military personnel are deployed for six months or longer, what happens to all of the possessions left behind? Members of the military are big users of self storage because they either stay in government quarters or rent an apartment for a short period of time and usually do not own a home. Because they are constantly on the move, renting a storage unit often makes more financial sense than maintaining a residence to house possessions. But more military members are taking notice of the Basic Allowance for Housing (BAH) available to qualified service members, and turning an interested eye towards home ownership. This could have an impact on self storage companies that cater to the military.
BAH - a monthly stipend to cover shelter costs – are tax-free payments that are awarded at different rates depending on rank, status and location. And they can make buying a home possible. Scores of service members have access to BAH and are catching on to just how powerful it can be to build wealth and invest in a home. Military members, being constantly on the move, often don’t think of themselves as good candidates for home ownership, but that is changing.
When government quarters aren’t provided, BAH is awarded payments that change annually to ensure military members can keep up with real estate costs in the civilian world. An example for BAH payments to a married E-4 with dependents stationed in Fort Bragg, N.C., is $990 per month. While at Fort Bragg, Calif., the BAH rate for the same soldier is $1,161 per month to reflect the higher cost of living. During the course of a career, military personnel can accrue a large chunk of change to put toward a home.
If more military personnel decide to buy a home where their belongings can be stored during deployments, self storage companies like Moishe’s Self Storage which caters to the government and military will likely feel the effect. The company’s mobile storage component offers military personnel storage containers that are delivered to a home, stored in a secure, climate-controlled storage facility and then shipped to a new base location. The mobile units are made for long-distance travel and can be delivered anywhere and picked up whenever the customer is ready.
Home ownership is inherently difficult for military personnel because they live a transient life and can expect to move multiple times during their career. But the BAH is becoming more noticed as a way to build equity from home to home. It is also a powerful home-buying tool when coupled with the flexibility of low-and no-down payment mortgage programs for military members. Currently, interest rates are low, home prices are low, and BAH is high. Instead of living in housing or renting an apartment, military personnel can own their own home for the same monthly cost as living in base housing or renting an apartment. And homeowners can deduct the interest of their mortgage payment. This could mean a bigger refund check from the IRS or more money each month.
But as military personnel consider the benefits of BAH, the storage industry continues to court their steady business. Just this week, Door to Door, a national provider of portable storage and moving services, announced it is offering active military personnel a 50 percent discount on storage rates with no minimum length of stay required. Additional savings on moving services are also offered. Door to Door moves personnel to military bases throughout the United States and can provide free weight tickets for every move.
Sources Used:
Roth, J.D. “The Basic Allowance for Housing: Helping Military Members Afford a Home.” GetRichSlowly.org. May 30, 2011.
“San Diego Military? Use Your BAH To Buy A Home!” SanDiegoHomes.com. 2011.
“Door to Door Storage Provides Special Military Moving and Storage Rates.” YahooNews.com. May 26, 2011.
Moishe’s Self Storage. 2011.