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Should military members invest in real estate? Everyone has different appetites for risk and investing in real estate, so it’s tough to say. But here are a few things to consider as you weigh your options.
The Military Paycheck is Steady
COVID-19 has disrupted the lifestyle for millions of Americans. Due to layoffs and small business closings, many don’t have the same steady paycheck they used to.
That’s not the case for the military. You can argue that military members have the most stable income stream in the country! Their paychecks are backed by the United States Federal Government, which isn’t falling apart or “going out of business” anytime soon. And even though the government may close down some departments or functions over time, the military will always be around.
The steady paycheck makes it easier to invest in real estate than it would be for other people. You don’t need to worry about having the cashflow to cover rainy day expenses. Even though theoretically you can cover all expenses from the rental’s cash flow, it can take time to build up the savings for big maintenance projects.
Just plan on putting away some of your steady paycheck every month to help cover these things at the beginning. After investing for a while, you’ll have a bit more cash from the rentals to cover these things.
Click here to read about what to keep in mind about buying your next property.
The Military Lets You See Many Different Towns
Another great thing about being in the military is the lifestyle. Depending on your career field, you may be moving every 2-4 years to a new location. That gives you a great opportunity to feel out different parts of the country to determine a great place to invest.
For example, you may find yourself in a small but nice town where homes are inexpensive. This could give you a great opportunity to invest in several homes that are close to the military base. And since investing in a military town can be a good thing, you’re set.
Likewise, you may find yourself in a part of town that’s not in the best of shape. Some military bases are in towns that have seen better days. You may choose to invest here, seeing the project as a fixer-upper. Or you could choose to pass, since you know there are other, nicer areas to invest your hard-earned money.
Either way, it’s that experience of seeing different areas that gives you a good perspective of where might be a great area to buy a rental property.
Click here to read the best towns to buy fixer-uppers.
Long Distance Property Management Can be Difficult
One potential downside to real estate investing is you’ll inevitably end up owning property that’s not in your backyard. Whether you’re 300 miles away or 3,000, that extra distance adds some challenges to managing the property.
You can hire a property management company to help, just keep in mind they take a cut of the rent off the top. If your cash flow is somewhat slim, you may not be able to afford a property manager.
This doesn’t mean it can’t be done. It just means you should be aware this challenge does exist.
Should military members invest in real estate? We do recommend exploring it, as it can be a great way to build wealth and a second income stream. For help with the buying process, give us a call at (844) 824-5626. We look forward to working with you!