If you are a veteran or active duty military person concerned about rental property investments, this blog is for you! Investing in Poquoson rental properties can be an excellent way to secure your financial future and build equity. However, there are a few things you should be aware of before beginning. The following will explain the fundamentals of buying rental properties as a veteran or active duty person. We’ll also cover a few suggestions that will make it easier to find and purchase investment properties. This guide has something for everyone, whether you’re just getting started or are already familiar with rental properties!
Invest with a VA Loan
If you are a veteran, you might be qualified for a VA loan. With no down payment and lower interest rates, this loan type is a great option for buying rental properties. You must be eligible and earn enough money each month to pay your mortgage, among other requirements. If you meet the criteria, a VA loan can be an excellent way to finance your investment in rental property.
VA loans have a few downsides you should be aware of. 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. Therefore, if you are considering rental properties in high-cost areas, you may not be eligible for a VA loan.
You should be aware of the occupancy requirements as well. After purchase, you or a qualified tenant must occupy the home as your main residence for at least one year. You can then lease it to tenants after that. But if you move out before the year is up, you might have to pay a penalty or have the loan terms changed.
Use BAH to Secure Financing
The Basic Allowance for Housing (BAH) is a superb benefit for investors who are in active duty military. BAH is a housing allowance that is used to defray some of the cost of renting a home. It depends on your pay grade, where you are assigned to work, and whether you have dependents. BAH can be used to help with monthly mortgage payments if you’re looking for a rental property close to your place of duty.
To be exempted from BAH, you must be a member of the armed forces and have instructions for a permanent change of station (PCS). Additionally, you will need proof of income and sufficient funds for a down payment on the rental property in order to qualify for financing. In contrast, if you are already receiving BAH, you might be able to put that money toward the purchase of a single-family house, a townhouse, or a condominium. Before submitting an offer on a rental property, you should consult with a housing counselor or real estate agent about the BAH restrictions.
Go Multi-Family
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 have the potential to increase rental rates and attract 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.
It’s crucial to do your research before investing in a multifamily rental property. Determine if there is a demand for rental units by conducting market research. You should also figure out the property’s potential rental income and associated costs. A Poquoson property manager would be a tremendous resource to help you locate all of this information. You can proceed with submitting an offer for the property if all is well.
The main weakness of multi-family homes is the rising maintenance and repair costs. To avoid problematic tenants, you’ll also need to thoroughly screen potential tenants. However, if you are up for the task, a multifamily rental property can be an excellent way to build equity and generate income.
Veterans and members of the military on active duty have several options for financing rental properties. 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 for military personnel on active duty or veterans to invest in rental properties. To find out more about the numerous services we provide to investors and potential investors like you, get in touch with Real Property Management Dominion! You can contact us online or call 757-395-4274.
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.
