Military Real Estate Investing: Leverage VA Loans & Relocation Benefits

Military Real Estate Investing: A Unique Advantage

Military real estate investing offers a unique set of opportunities and challenges. As service members, we have access to exclusive benefits like the VA loan, experience with relocation, and a strong pool of military tenants. Let’s explore how these factors make military real estate investing a powerful strategy for building wealth.

The VA Loan: A Game-Changer for Military Investors

The VA loan is one of the most significant benefits available to military personnel. With this loan, you can purchase a 1-4 unit property as your primary residence with no down payment required. This strategy, often referred to as the “VA house-hack,” allows you to buy up to a four-plex without putting any money down.

This benefit is particularly valuable for those just starting in real estate investing. It allows you to enter the market without needing a large amount of cash upfront. By living in one unit and renting out the others, you can have your tenants cover the mortgage payment. This setup can help you save a substantial portion of your Basic Allowance for Housing (BAH) and build investment capital for future ventures.

Relocation: A Double-Edged Sword

The military lifestyle often requires frequent relocations every 2-3 years. While this can be challenging, it also presents significant advantages for real estate investing. Moving to different locations allows you to:

• Explore Various Markets: Exposure to different real estate markets broadens your knowledge and helps you identify promising investment opportunities. Whether you're moving from a coastal city to the Midwest or vice versa, each market offers unique opportunities and challenges.

• Utilize the VA Loan Multiple Times: Relocation provides opportunities to use the VA loan more than once, enhancing your ability to build a diverse real estate portfolio.

The Benefits of Military Tenants

Investing near military installations often means you’ll attract military tenants. Generally, these tenants are known for being:

• Reliable and Professional: Military tenants tend to be clean, responsible, and professional, which can reduce the likelihood of property issues.
• Guaranteed Rent: If a tenant encounters payment issues, their command can dock their pay and redirect it to you, providing an extra layer of financial security.

Additionally, the presence of a large military installation typically means a stable local economy, which is a positive indicator for property investments.

Embracing Long-Distance Investing

Long-distance real estate investing might seem daunting, but it can be a blessing in disguise. When you invest far from your location, you’re forced to:

• Build a Strong Team: You’ll need reliable property managers, realtors, lenders, and contractors to oversee your properties. This necessity helps you establish a robust team that ensures your investments are well-managed.

• Create Efficient Systems: Investing remotely encourages you to implement effective systems and processes. My own experience with long-distance investing has resulted in truly passive income. For example, my first 13 units have only required three hours of my time this quarter. I receive monthly reports and handle accounting, but otherwise, the properties run smoothly on their own.

Knowing When to Rent

Sometimes, renting is a better option than purchasing property. For instance, in high-cost markets like Hawaii, where median home prices are around $800,000 and rental income doesn’t cover the mortgage, renting might be a more viable option. The local market may not always be conducive to positive cash flow, and investing in such a market might be more akin to gambling than investing.

When considering an investment, always evaluate whether the numbers make sense. If they don’t, it may be wiser to hold off on purchasing and explore other opportunities.

Conclusion

Military real estate investing offers distinct advantages and challenges. From leveraging the VA loan to dealing with relocation and military tenants, these factors create a unique investing landscape. By understanding these dynamics and implementing effective strategies, you can make the most of your military real estate investments and build a successful portfolio.

For more tips and insights on military real estate investing, stay tuned to our blog and connect with us at Jazmin Cantley Realty.