Skip to main content
PCS Pal is not affiliated with the U.S. Department of Defense or any government agency.
© 2025 PCS Pal. All rights reserved.
Pricing Strategy & BAH Rates Last updated: 1/15/2025
9 min read
Pricing BAH Strategy Market Analysis Revenue
Understanding Military Housing Allowance BAH (Basic Allowance for Housing) is the primary method by which military members pay for housing. Understanding how BAH works is essential for setting competitive rental prices.
Key Facts:
BAH is tax-free income
Varies by rank, location, and dependent status
Updated annually (usually January 1st)
Paid directly to the service member
Not guaranteed to cover 100% of rent
How BAH is Calculated Three Key Factors 1. Pay Grade (Rank)
E1-E4: Junior enlisted ($800-$1,500/month typical)
E5-E6: Mid-level enlisted ($1,200-$2,000/month typical)
E7-E9: Senior enlisted ($1,500-$2,500/month typical)
O1-O3: Junior officers ($1,500-$2,500/month typical)
O4-O6: Senior officers ($2,000-$3,500/month typical) Ranges vary significantly by location
Based on ZIP code of duty station
High cost areas (CA, HI, DC) have higher BAH
Rural areas have lower BAH
Updated annually to reflect market
"With dependents": Spouse and/or children (higher rate)
"Without dependents": Single service member (lower rate)
Typical difference: $200-$500 more with dependents
BAH-Based Pricing Strategy The 95-105% Rule Optimal pricing is 95-105% of target BAH rate
Why this range works:
Below 95%: Money left on table, may signal problems
95-100%: Highly competitive, fast rental
100-105%: Premium justified, still accessible
Above 105%: Significantly limits applicant pool
Finding Your Target BAH Rate Identify Nearby Military Installations List all bases within 30 miles of your property. Most service members commute 15-30 minutes.
Research BAH Rates Use our BAH Calculator
Calculate Your Sweet Spot Average the BAH rates across nearby bases and common ranks. This is your target rent price.
Adjust for Property Features Premium features can justify 5-10% above average BAH. Dated properties should price 5-10% below.
Example Calculation
Competitive Market Analysis Research Your Competition What to Analyze:
Properties within 2 miles
Similar size (±1 bedroom)
Similar age/condition
Similar amenities
Currently available listings
Key Metrics to Track:
Listed rent prices
Days on market
Features and amenities
Photo quality
Included utilities
Pet policies
Creating Your Competitive Matrix | Property | Beds/Baths | Rent | Features | Days Listed |
| ----------------- | ---------- | ------ | ---------------------- | ----------- |
| 123 Main | 3/2 | $1,595 | Pool, garage | 45 days |
| 456 Oak | 3/2 | $1,650 | Updated, fence | 12 days |
| 789 Elm | 4/2.5 | $1,750 | Large yard, shed | 8 days |
| Your Property | 3/2 | $1,650 | Garage, fence, updated | New |
Analysis:
Properties at $1,650 are renting quickly (12 days)
Property at $1,595 sitting too long (45 days) - may have issues
Your features justify $1,650 pricing
Pricing Strategies by Property Type Standard Properties (3BR/2BA) Target Tenant : E5-E7 families
Price at 95-100% of E5-E6 BAH with dependents
Focus on "good value" positioning
Highlight included utilities
Emphasize family-friendly features
Example : If E5-E6 average BAH is $1,500:
Rent : $1,425-$1,500/monthStrategy : Fill quickly, low vacancy Premium Properties (4+ BR, Upgraded) Target Tenant : E7+ or dual-military couples
Price at 100-110% of E7+ BAH
Target officers (O3-O5)
Highlight luxury features
Emphasize recent renovations
Example : If E7 BAH is $1,800, O3 BAH is $2,100:
Rent : $1,800-$2,200/monthStrategy : Wait for right tenant, justify premium Budget Properties (2BR, Older) Target Tenant : E3-E5, singles or young couples
Price at 80-95% of E5 BAH without dependents
Be competitive on price
Highlight location/convenience
Note any updates
Seasonal Pricing Adjustments Peak PCS Season (May - August) Market Characteristics:
Highest demand
Multiple applicants common
Less price sensitivity
Quick decision-making
Pricing Strategy:
Price at 100-105% of BAH (full rate)
Less need for concessions
Shorter time on market
Can be selective with tenants
Off-Peak Season (September - April) Market Characteristics:
Lower demand
More price competition
Longer decision processes
More negotiation
Pricing Strategy:
Price at 95-100% of BAH (competitive)
Consider move-in incentives
Be more flexible on terms
May take longer to fill
Holiday Periods Thanksgiving - New Year:
Very slow market
Consider holding unit if possible
Or offer significant incentives
January - February:
Pricing Add-Ons and Fees Security Deposit Standard : 1 month's rent
E.g., $1,500 rent = $1,500 deposit
Some states limit deposit amounts
Consider lower for military (good payment history)
Alternative : 0.5 month's rent + insurance
Lower upfront cost
Security deposit insurance policy
Growing trend in military markets
Pet Fees (If Pets Allowed) Pet Deposit : $200-$500 per pet
Refundable based on damage
Covers potential cleaning/repairs
Some states limit pet deposits
Pet Rent : $25-$50 per pet per month
Non-refundable monthly fee
Covers wear and tear
Standard in most markets
Utilities Included in Rent (higher rent, easier sell)
Water/sewer/trash: Add $50-100/month
Gas: Add $50-150/month (varies by season)
Electric: Generally not included
Tenant Pays (lower rent, standard approach)
Provide average monthly costs
When to Adjust Pricing Price Too High Indicators
No inquiries within 7 days
Fewer than 5 views per day
Showings without applications
Feedback: "Price is too high"
Sitting longer than 30 days
Action : Reduce by 5% ($1,600 → $1,520)
Price Too Low Indicators
10+ inquiries within 24 hours
Multiple applications immediately
Offers above asking price
Competitive bidding
Friends/family suggesting higher price
Action : May have missed value, price higher next time
Market Change Indicators
BAH rates updated (annual in January)
Base closure/expansion announcement
Major employer moves in/out
Housing market shift (buyer/seller)
Competition adjusting prices
Action : Research new comps, adjust accordingly
Advanced Pricing Tactics Psychological Pricing
$1,595 feels significantly less than $1,600
$1,499 vs $1,500 threshold effect
Round numbers ($1,500) feel simpler
Odd numbers ($1,497) can feel calculated
Recommendation : Use round numbers for military (simpler is better)
Incentive Pricing Instead of lowering rent, offer incentives:
First month free (amortized over lease)
Reduced deposit ($500 instead of $1,500)
Waived application fee
Free month of utilities
Move-in date flexibility
Math Example :
Rent: $1,500/month
First month free on 12-month lease
Effective rent: $1,375/month ($16,500 ÷ 12 months)
Perception: "$1,500/month with first month free!" sounds better than "$1,375/month"
Premium Positioning Justify above-BAH pricing with:
Professional staging
Smart home features
Recent renovations (photos of before/after)
Energy-efficient (lower utility bills)
Concierge services
Flexible lease terms
Long-Term Pricing Strategy Annual Rent Increases Standard : 3-5% annual increase
Keeps pace with inflation
Lower than turnover costs
Reasonable for good tenants
Factors to Consider :
BAH rate changes
Market rent growth
Tenant quality
Property improvements
Vacancy costs vs. increase
Example :
Current rent: $1,500
3% increase: $1,545
5% increase: $1,575
Turnover cost: $3,000+ (vacancy + prep)
Decision : 3% increase retains good tenant Renewal Incentives For Great Tenants :
No increase (first renewal)
Below-market increase (2%)
Property upgrades (new appliances)
Flexible renewal terms
Why it Works :
Vacancy costs $3,000-5,000
Good tenants are valuable
Stability reduces stress
Positive reviews help future rentals
Common Pricing Mistakes to Avoid
❌ Pricing without researching BAH rates
❌ Not adjusting for property features
❌ Ignoring competition
❌ Staying firm on unrealistic price
❌ Frequent price changes (signals desperation)
❌ Hidden fees not disclosed upfront
❌ Not adjusting for seasonal demand
❌ Forgetting to update after BAH changes
❌ Overpricing based on personal attachment
❌ Underpricing based on fear
BAH Calculator Zillow/Rentometer : Check comparable rent pricesPCS Pal Analytics : Track views and inquiries on your listingLocal MLS : Research recent rental comps Annual BAH Changes
BAH rates typically update January 1st
Watch for announcements in December
Adjust pricing before peak PCS season
Grandfather current tenants or adjust moderately
Market Reports
Track average days on market in your area
Monitor rent growth trends
Follow base expansion/reduction news
Join local landlord associations
Property
Step 1 : Identify BAH rates
E5 with dependents: $1,440/month
E6 with dependents: $1,620/month
E7 with dependents: $1,800/month
Step 2 : Calculate average
Average: ($1,440 + $1,620 + $1,800) ÷ 3 = $1,620
Step 3 : Apply 95-105% range
Minimum: $1,539 (95%)
Target: $1,620 (100%)
Maximum: $1,701 (105%)
Step 4 : Adjust for features
Property has garage, fenced yard, updated kitchen
Recommended rent: $1,650 (102% of target BAH) Example
Rent : $880-$1,045/monthStrategy : High volume, quick turnover Luxury Properties (High-end, Exclusive) Target Tenant : Officers O4+, dual-military
Price 110-120% of O4-O5 BAH
Premium location and features required
Professional marketing essential
Patient approach to finding tenant
Example : If O4-O5 average BAH is $2,400:
Rent : $2,640-$2,880/monthStrategy : Target quality over speed
Winter PCS surge (secondary peak)
Price normally
Good demand from winter movers
Include utility company contact info
Note if any utilities are shared
Application fee: $50-75 per adult
HOA fees: Pass through or include
Lawn care: $50-100/month if included
Snow removal: $30-50/month if included (winter)