The demands of military life extend beyond any other career. It also requires you to face many scenarios unique to your lifestyle and the circumstances of your family. The questions of where to live, where to rent, or where to invest are questions that need careful consideration.
If you are looking to invest wisely and build an additional income at the same time, then real estate is undoubtedly one of the best choices. However, it entails several risk factors, ones that need to be addressed, especially since you might not be available every time to resolve an issue.
Here is a list of essential questions you need to ask before you make a decision.
1. Where Are you Planning to Return To?
Before buying a house as an investment, the most important thing to consider is where you are planning your retirement. You could be deciding on a location on your family’s circumstances. On the other hand, if the investment is your priority, you might be consulting top real estate agents to recommend properties that could get you the best ROI.
Most likely, you will hire a property manager and will have to ensure that the location is within reasonable traveling distance. You will have to take into account factors such as emergency travel costs, risk of mismanagement, and possible environmental risk factors. The location could be the deciding element here.
2. Can You Afford the Costs of Homeownership?
Properties always come with their own set of maintenance costs. If your family is not residing in the house you bought, you are looking at rental properties. Regardless of whether it is a house, an apartment, or a condo in a community, you are going to maintain it thoroughly well. Rental properties could earn you fees that would cover a part of these costs.
Rental property expenses also include property insurance, cost of property managers, vacancy rates repairs, and other unforeseen costs. Experts suggest keeping aside at least 35% of your monthly rental come for operating expenses of the property. Make sure you have an actual view of the costs before deciding on a purchase.
3. Can You Keep up the Costs if you Have to Move Prematurely?
Military life is consistent with changes, and that involves uprooting your family frequently. If your move comes a few months before you had planned, how are you going to manage the costs without any financial strains?
With an unexpected transfer, you would be facing an urgency to find a new rental apartment, while paying the mortgage on your current home. Wondering how to sell a home hastily might even result in financial loss. The market might not always be favorable to find tenants immediately. All these points, while alarming, might require you to plan a contingency fund before you plan on investing.
4. Are you familiar with the Regulations of a VA Loan?
The U.S. Department of Veterans Affairs provides home loan guarantee benefits to service members and their eligible families. However, it also has specific residency requirements and conditions that you need to fulfill. VA loans are applicable only for purchasing a primary residence, and if you are moving, then you need to sell the existing primary house to be eligible for another loan.
If you are hoping to invest in any other type of real estate investment, then you will have to rely on other types of financing. With a good credit score, it wouldn’t be a problem to land a good deal. It thus needs to be stressed that you need to look into the financing options before you sign any agreement.
Understanding the credits and restraints of your situation is imperative before making a real estate investment. Your best option is to find a reliable agent based on UpNest customer reviews and consult with a financial adviser to find out the right scenario most apt for your situation. Take time to learn about real estate, and when implemented correctly, your career could be your biggest asset to help you invest.