First of all, thank you for serving. I didn’t, so can’t avail myself of the benefits, but for real estate, they are huge. You’ve earned it. Let’s dive in. But first, If this isn’t the right level for you, here’s the other posts in this series:
- How to Start Real Estate Investing as a Teenager
- How to Start Real Estate Investing as a College Student
- How to Start Real Estate Investing as a Young Professional
- How to Start Real Estate Investing as a High Income Earner
- How to Start Real Estate Investing in the Military (this post)
- How to Start Real Estate Investing In or Near Retirement
There are many benefits and one big downside to investing while in the military: you may have to relocate without much notice. This downside discourages a lot of servicepeople from investing, but it shouldn’t. The way to mitigate this is to have solid property management and to budget 10% of the property’s income to that cost. This will get you premier service so the property can be run with almost no involvement on your part.
How to Get Started
- Save money. When in active duty, you won’t have a lot of expenses, so you can save a very large fraction of your paychecks. Some people can save up to 90%! If you are active duty you can take advantage of the Savings Deposit Program and the Thrift Savings Plan. Don’t forget that many vendors will give you a military discount on purchases.
- Decrease Expenses. This goes for anyone, but you must also avoid the temptation to purchase food and other luxuries outside of the base.
- Purchase Real Estate at Your Location. Another benefit is that you gain knowledge of many new locations and can purchase properties there. Begin purchasing rentals when you have saved enough money. When the military moves you, look at it as a way to learn about how to invest in a new city.
- Find a Property Manager in Each City. This is one of the most important pieces for any investor, but even moreso for you. You need to find the one who will take the time to work on your property and keep it running even if you are unreachable. You will need someone you trust to make important decisions without your involvement. Interview multiple managers and get references from your peers who are already investing.
- Purchase with a VA Loan. Subject to eligibility, you can use this benefit to purchase with a 0% down loan and don’t have to pay private mortgage insurance. There are restrictions on how you can live in or rent the property, but many investors follow the rules and still receive big benefits from this. Best of all, there is no limit to the number of times you can take out a VA loan.
Having a big property management expense might deter some from investing. But remember, you don’t need a lot of cash flow – just enough to keep a capital expense account going for any big repairs. You don’t need to turn a profit because your expenses are mostly paid for you in the military. It’s a whole lot better to build equity in your properties, so that later you can refinance or sell and reap the benefits.
Good luck to you and thanks for reading.
