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 Providence rental properties. Before you start, you should be aware of a few things. The following will explain the fundamentals of buying rental properties as a veteran or active duty person. We’ll also go over some pointers that can make it simpler 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’re a veteran, you may be qualified for a VA loan. There is no down payment required and the interest rates are lower for this kind of loan, which can be used to buy a rental property. You must be eligible for a mortgage and have sufficient income to cover the monthly payments. If you’re qualified, a VA loan may be a fantastic way to fund your investment in rental property.
There are also disadvantages associated with VA loans to consider. If you put less than 20% down on the house, for instance, you might have to pay for private mortgage insurance (PMI). The county in which the property is located also affects the maximum amount you are permitted to borrow. Therefore, you might not be able to use a VA loan if you’re looking at rental properties in expensive areas.
Additionally, you must be aware of the occupancy requirements. You or a credentialed tenant must possess the property as your main home for a minimum of one year following the purchase. The property can then be rented to tenants. But if you leave before the year is up, the loan terms might change or you might have to pay a penalty.
Use BAH to Secure Financing
A wonderful benefit for active duty military investors is called the Basic Allowance for Housing (BAH). BAH is a housing allowance that helps offset the expense of renting. It depends on your duty station location, your wage grade, and whether or not you have dependents. BAH can be used to help cover monthly mortgage payments if you’re searching for a rental property near your duty station.
To be eligible for BAH, you must be on active duty and have orders for a permanent change of station (PCS). In addition to proof of income and sufficient funds for the rental property’s down payment, you’ll need these items to obtain financing. If you’re already receiving BAH, however, you may be able to use it to purchase a townhouse, single-family unit, or condominium. Be sure to consult with a housing counselor or real estate agent prior to submitting an offer on a rental property, as there are restrictions on how BAH can be used.
Go Multi-Family
Consider a multifamily property if you’re searching for a rental property that will generate more income. These residential properties may be duplexes, triplexes, or fourplexes. As a result, there may be more tenants and higher rental rates. If you intend to live in one of the units yourself, veterans may be able to use VA loans to finance a multi-family building.
It’s crucial to do your research before investing in a multifamily rental property. Check the local market first to see if there is a need for rental properties. Additionally, you will need to calculate the property’s potential rental income and expenses. A Providence property manager is an excellent resource for determining all of this info. If everything appears satisfactory, you can proceed with making an offer on the property.
The primary downside of multi-family homes is that they need more upkeep and repairs. To avoid problem tenants, you will also need to conduct a thorough tenant screening. A multifamily rental property, however, can be a great way to build equity and make money if you’re up for the challenge.
There is a wide selection of financing options available to veterans and active-duty military personnel for the payment of rental units. Growing your investment portfolio is a fantastic option for you when using special benefits like VA loans and BAH. With some research and planning, you can become a successful rental property owner regardless of where you live or the type of rental property you desire.
Collaborating with a local rental market expert is one of the most effective ways for veterans and veteran members to invest in rental properties. Contact Real Property Management Cache Valley to learn more about the multiple services we provide investors and prospective investors like you! You can contact us online or call 435-753-5200.
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.
