If you are a veteran or active duty military person concerned about rental property investments, this blog is for you! Front Royal rental properties can be a great way to build equity and secure your financial future. However, there are a few things you should be aware of before beginning. This guide will lead you through the essentials of investing in rental properties as a military veteran or while on active duty. We’ll also go over some pointers to make finding and purchasing investment properties simpler. This guide has something for everyone, regardless of your experience level with rental homes!
Invest with a VA Loan
Those who have served as a veteran might be qualified for a VA loan. This kind of loan is excellent for buying rental properties because it requires no down payment and has lower interest rates. You must meet certain qualifying conditions and have sufficient monthly income to cover the mortgage payments. A VA loan could be a great way to finance your investment in a rental property if you are eligible.
With VA loans, there are a few drawbacks to take into account. For instance, if you put less than 20% down on the property, you might have to pay for private mortgage insurance (PMI). Additionally, there are borrowing limits based on the county in which the property is located. As a result, you might not be able to use a VA loan if you’re considering renting out a property in an expensive area.
Likewise, there are occupancy requirements you must be aware of. After purchasing the property, you or a qualified tenant must live there as your primary residence for at least a year. Following that, you can lease it to tenants. You might have to pay a penalty or have the loan terms changed if you leave the property before the year has passed, though.
Use BAH to Secure Financing
The Basic Allowance for Housing (BAH) is a superb benefit for investors who are in active duty military. A housing allowance known as BAH is used to defray some of the expenses of renting a home. Your duty station’s location, pay grade, and the presence of dependents are taken into consideration. If you are searching for a rental property close to your duty station, you can use BAH to help cover the monthly mortgage payments.
You must be on active duty in the military with valid orders for a permanent change of station (PCS) in order to be eligible for BAH. Additionally, you will need proof of income and sufficient funds for a down payment on the rental property in order to qualify for financing. However, if you are currently getting BAH, you may be able to use it to buy a single-family home, condo unit, or townhouse. Be sure to consult a housing counselor or real estate agent before making an offer on a rental property as there are some limitations on how BAH can be used.
If you are searching for a rental property that will generate more income, you may wish to consider a multifamily property. These dwellings may be duplexes, triplexes, or fourplexes. They provide the possibility of increased rental rates and more tenants. Veterans may finance a multi-family building with VA loans as long as they intend to live in one of the units themselves.
Before investing in a multifamily rental property, it is important to conduct research. To determine whether there is a demand for rental properties, first, analyze the local market. The potential rental income and associated costs for the property must also be calculated. A Front Royal property manager would be a great resource to help you find all of this information. You can start with submitting an offer for the property if all is in order.
The main drawback of multi-family homes is the increased maintenance and repair costs. You will also need to conduct a thorough tenant screening to avoid problem renters. However, if you’re up for the challenge, investing in a multi-family rental property can be an excellent way to increase equity and make money.
There are several ways for veterans and active-duty military personnel to acquire rental property financing. Utilizing unique advantages such as VA loans and BAH, building a portfolio of investments is a great option for you. With a little research and planning, you can become a successful landlord regardless of where you live or the type of rental property that interests you.
Working with a local rental market expert is one of the best ways to invest in rental properties as a veteran or active military member. To find out more about the various services we provide investors like you, please contact Real Property Management Elevation! You can contact us online or call 540-409-5857.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.