Investing in rental real estate may seem daunting to active members of the military, but it may be an appealing option. In fact, moving from post to post may even give active-duty service members a distinct advantage over investors tied to one location. You will need the right information and the right people to help, though.
Real Estate Financing
When it comes to buying investment properties, active-duty service members have several advantages. From a financial standpoint, the two most important advantages are VA home loans and a Basic Allowance for Housing (BAH). VA home loans are designed to help active and retired military purchase homes and made at competitive interest rates. Active-duty members of the military also receive a Basic Allowance for Housing (BAH), which varies based on the service member’s rank, location, and dependency status. Still, the BAH is a nontaxable stipend that can be used to pay a mortgage, making it possible for many active members of the military to qualify for one (or more) VA home loans. When used together, a VA home loan and the BAH may offer active military an opportunity to invest in rental real estate.
Build Your Team
Still, financing an investment property is only one part. To invest in more than one rental house, service members will need to have the right people to help them. For most, this means hiring a trustworthy property manager. Trying to manage your own property from a distance can be a difficult and frustrating experience. But not with the right property management professional on your team. For example, Real Property Management is a highly-ranked professional property management company with over 300 independently owned and operated franchise offices in North America. This means no matter where your military service takes you, chances are good there may be a Real Property Management office nearby. A quality property management company can manage every aspect of your investment once you move to your next post; you simply collect the rental income every month.
Real Estate Agents
Other important members of your investment team will be a military-friendly real estate agent and a lender with expertise in VA loans. These real estate professionals can help you realize your dream of investing in rental real estate while still serving. They can also help you answer the key questions every potential investor should ask, such as whether you can cover a mortgage payment with your BAH, whether you are willing to rent out your home once you move, and whether you could rent your home at a rate high enough to cover the mortgage and other expenses.
After careful analysis of your specific situation and an honest discussion with the right people, you can better know whether investing in rental real estate is a good option for you.
*Real Property Management is not a financial advisor. This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice
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