3 Routes For Service Members Who Want To Become Landlords
Are you a military service member who wants to set up an added income stream for life? Becoming a landlord is one of the best ways to do just that. If you want to get into the landlord business but aren't sure how to start, why not try one of these proven paths?
The 'Eventual Landlord' Route
Becoming a landlord is a long-term business venture, so there's no reason to rush into things. One great way for a novice landlord to prepare is to start by purchasing a home for themselves to live in. Using the property as your primary home qualifies you for a Veterans Administration (VA) loan with low interest rates and little or no down payment. You would then pay down the loan and build equity.
When you find yourself relocating to the next assignment, you would then turn the home into a rental by refinancing it with a conventional loan. But you'll have built up equity and benefited from the low rates of the first loan to free up money. And since VA rules stipulate a combined total borrowing allowance, you can then get a new VA mortgage for your primary home.
The Home Flipping Route
So-called house 'flipping' involves buying a property in need of repairs or updates, completing the renovation work, and then selling it at a profit. You would live in the home as your residence, qualifying for a VA mortgage during that time, while you fix it up. Then, when you're done, sell it at a profit.
When you're ready to become a landlord, you could take one of two steps. You might remodel the last home specifically for use as a rental or you may sell it and use the built-up proceeds to purchase a rental unit for cash outright or a small conventional loan.
The Multi-Unit Route
This route to become a landlord is a deliberate path with rental income from the beginning. VA mortgage rules allow service members and veterans to get a mortgage for a multi-unit home as long as they live in one portion of it.
You could, then, opt for a duplex, triplex, or fourplex with your loan benefits. Live in one section and rent out the others for a steady side income. Your housing costs may be fully covered by the rental income and you still qualify for great terms on the mortgage.
Which of these methods could work for your particular situation? No matter which route you want to take, you're likely to find that now is a great time to take the plunge and start your side income for a better financial future. Contact VA mortgage lenders for more information.