Real Estate Investing Strategies Perfect for Veterans

Earning passive income or income on the side can help create a more padded nest egg for you and your family to enjoy. Military service members who are busy with active duty or veterans who would like more expendable income for their families often turn to real estate investments to earn a little more. If you’re curious about starting a real estate investment side career, not all strategies are created equal. While investing is a popular approach for veterans of many kinds, certain methods are typically preferred over others. An excellent first step is to learn about the various types of real estate investment strategies that may best suit your needs and goals.

Use a VA Loan for a Multi-Unit Property

Many veterans can take advantage of VA loans to help them afford an investment property. A VA loan offers flexible down payment and credit score requirements, eliminating the need for mortgage insurance and a lengthy savings plan. Those who want to start an investment opportunity can obtain a jumbo loan for a multi-unit property. There are some VA jumbo loan limits to consider, including the fact that you’ll need to live in one of the units as your primary residence in order to qualify. However, a VA loan often can provide more equity upfront, which can be an excellent start to a real estate investment portfolio.

Buy-and-Hold Rental Properties

Another excellent real estate investment strategy that many veterans find success with is the buy-and-hold method. You’ll purchase a property to keep for years or decades and earn passive income from tenants renting out the space. If it won’t be your primary residence, you won’t qualify for a VA loan. However, if you’ve used a VA loan already, you can use the equity from it to purchase additional properties with a conventional loan. Once you have purchased a property and secured tenants, you can enjoy passive income, albeit with some occasional maintenance responsibilities. You can hire a property management company if you prefer a more hands-off approach.

Short-Term Rentals

Many veterans see real estate investment success with short-term or vacation rentals, particularly if you are stationed in or retired near popular vacation destinations. Many veterans live in or are stationed near Hawaii, Florida, and other popular areas where vacation rentals are often utilized. In many cases, short-term rentals can provide more income than long-term rentals in highly popular vacation destinations. Evaluate the short-term rental appeal in your area. Popular destinations for short-term rentals include national parks, popular hiking trails or campgrounds, famous eateries, convention centers, amusement parks, zoos, college towns, and more. If you live on the property, you may even qualify for a VA loan for the property.

Fixer-Upper or BRRRR (Buy, Rehab, Rent, Refinance, Repeat)

If you don’t mind getting involved in some labor, you can invest in a fixer-upper or a BRRRR. BRRRR stands for buy, rehab, rent, refinance, and repeat. This investment approach involves purchasing a fixer-upper and renovating it to rent out for income. Once you’ve improved the property, you can refinance it to gain a better return on investment (ROI). One thing to note as a veteran is that fixer-uppers that need major repairs will typically not be eligible for a VA loan, so you’ll need to rely on other financing methods when purchasing a BRRRR property. You’ll also need to secure finances to rehab the property in order to create a safe rental space for future tenants. Some retired veterans find enjoyment in the extra work required of these properties.

Real Estate Investment Trusts (REITs)

Unlike a BRRRR, some real estate investment strategies require minimal hands-on labor or involvement. Veterans, particularly those who are busy active-duty members or disabled veterans, find significant value in real estate investment trusts (REITs). You don’t need to own a physical property or piece of real estate to invest in an REIT. You can invest in REITs, similar to the stock market, for a more passive investment approach. You can also find low upfront costs and absolutely no responsibilities as a landlord. Others will handle the property management aspect, and you will provide the funding through trusts. You will want to research the best options for your needs, looking for publicly traded options with the best track records and strongest payouts. 

Conclusion

As a veteran, you’re likely wanting to enjoy retirement or are busy with active service duties. Making passive income on the side with real estate investment is a worthwhile opportunity for many veterans. Some strategies offer hands-off investment for busy service members or veterans enjoying retirement, such as REITs. If you’re restless during retirement, approaches such as BRRRR allow you to rehab a fixer-upper in order to turn a profit. You can use VA loans to your advantage, including jumbo options, as long as you qualify and live on the property. If you’d like to add to your retirement nest egg or raise more money for your family, a real estate investment may be an excellent opportunity for you.