If you are a veteran or active-duty military member interested in rental property investments, then this article is what you need! Building equity and securing your financial future can both be accomplished with Cambridge rental properties. 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 cover a few suggestions that will make it easier to find and purchase investment properties. This guide has something for everyone, whether you are a novice or a seasoned investor in rental properties!
Invest with a VA Loan
If you are a veteran, you might qualify for a VA loan. This type of loan may be utilized to purchase a rental property and comes with numerous advantages, including no down payment and lower interest rates. 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.
There are also some VA loan disadvantages to consider. For instance, if you put less than 20% down on the property, you might have to pay for private mortgage insurance (PMI). Furthermore, there are borrowing restrictions based on the county in which the property is situated. 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. You or a credentialed tenant must possess the property as your main home for a minimum of one year following the purchase. After that, you can find tenants to live there. However, if you vacate the property before the one-year mark, you may be required to pay a penalty or modify the loan terms.
Use BAH to Secure Financing
The Basic Allowance for Housing (BAH) is an added advantage for investors who are active duty military personnel. BAH is a housing allowance that helps offset the expense of renting. It varies on your duty station, your pay grade, and the number of dependents you have. BAH can be used to help with the monthly mortgage payments if you’re looking for a rental property close to your place of employment.
You must be serving in the military on active duty and possess valid orders for a permanent change of station (PCS) in order to be eligible for BAH. Additional requirements for obtaining financing include having sufficient savings for a down payment on the rental property and providing proof of your income. However, if you already receive BAH, you might be able to use it to pay for a single-family house, a townhouse, or a condominium unit. Before making an offer on a rental property, be sure to consult a housing counselor or real estate agent because there are some limitations on how BAH can be used.
A multi-family building might be something to think about if you’re looking for a rental property that will bring in more money. These residential properties may be duplexes, triplexes, or fourplexes. As a result, there may be more tenants and higher rental rates. 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. Determine if there is a demand for rental units by conducting market research. Additionally, you will need to calculate the property’s potential rental income and expenses. A Cambridge property manager would be a wonderful resource for determining all of this information. You may proceed with making an offer on the property if everything checks out.
The primary disadvantage of multifamily dwellings is that they require more upkeep and repairs. 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 service members can finance rental properties in a variety of ways. Utilizing unique advantages such as VA loans and BAH, building a portfolio of investments is a great option for you. With a little preparation and research, you can become a successful landlord no matter where you go or the kind of rental property you’re interested in.
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 Commonwealth! You can contact us online or call 617-299-2342.
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.