If you have received Permanent Change of Station (PCS) orders, you are not alone. Every year, nearly 700,000 service members and their families undergo a PCS move. While the term "permanent" might be misleading, as moves are often temporary, proper planning can help make the transition smoother and more cost-effective.
Understanding Your PCS Benefits and Expenses
While the military covers a significant portion of PCS-related expenses, there are out-of-pocket costs to be aware of. On average, service members spend around $2,000 on non-reimbursable moving expenses.
Determine Which Costs Are Reimbursable
Before your move, contact your installation’s family center to determine which expenses are covered. The military provides a commercial moving service to pack and transport your household goods at no cost. However, you should plan for additional expenses such as:
- Temporary housing costs: Hotels and meals during your move may be partially covered through per diem allowances.
- Utility deposits: Setting up utilities, phone, and internet at your new location may require deposits, typically around $100 per service.
- Replacement items: Budget for household items you may need to replace upon arrival.
- Personal travel expenses: If you choose to take leave and travel beyond the allowed reimbursement limits, those costs will be your responsibility.
Keep all receipts and document any non-reimbursable expenses. You never know when you might need to provide proof for reimbursement.
Call Your Insurance Provider
While government-hired movers have insurance, coverage may be limited. If you are handling your PCS independently, verify what your insurance covers for damaged or lost goods. If shipping a vehicle, confirm that your auto insurance covers transport-related damages.
Do-It-Yourself (DITY) PCS Moves
The military offers the option of a Personally Procured Move (PPM), commonly known as a Do-It-Yourself (DITY) move. If you choose this option, the government will reimburse you up to 95% of the estimated cost of using a contracted commercial mover.
For example, if your government-assigned relocation cost is $8,000, you could receive $7,600 in reimbursement if you move yourself. This option allows you to shop around for cost-effective moving solutions and potentially keep some of the reimbursement funds if you spend less than the allowance.
Reimbursement amounts vary based on rank and family size, so check with the Transportation Management Office (TMO) for an accurate estimate.
What to Do With Your Current Home
If you own a home, a PCS move presents several options:
1. Keep the Property and Rent It Out
If you plan to return to the area, renting out your home can generate passive income. Rental rates in many areas exceed mortgage payments, allowing you to cover your mortgage and possibly make a profit.
Consider hiring a property manager if you will be stationed far away. They can handle tenant screenings, rent collection, and maintenance, but their fees will reduce your rental income.
2. Sell with an Assumption
VA loans are assumable, meaning another buyer can take over your loan with its existing terms. If you have a low interest rate, this can be a great selling point.
However, your VA entitlement remains tied to the property until the buyer sells or refinances. This could limit your ability to use your VA home loan benefit for a future purchase.
3. Sell Outright
Selling your home before your PCS move allows you to restore your VA loan entitlement and use it for your next home purchase. Keep in mind:
- Selling costs: Real estate commissions, title fees, and excise taxes can add up to 6% or more of your home’s sale price.
- Time constraints: If your move date is soon, plan for a power of attorney or real estate attorney to handle closing on your behalf.
4. Keep the Home Without Renting
If you can afford it, keeping your home as a secondary property for future retirement or vacation use is an option. However, you will need sufficient income to cover two housing payments, which is often not feasible for most service members.
