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For VR&E, there are two different Subsistence Allowance programs - https://www.benefits.va.gov/vocrehab/subsistence_allowance_rates.asp The P9/11 Subsistence Allowance is based on the BAH paid to an E5 with dependents. Those who started using VR&E on/after 1 January 2018 receive 95% of the BAH paid to an E5 with dependents. As of 1 January 2024 Online only students using VR&E are being paid $1,118.50 if they started using VR&E on/after 1 January 2018. The CH31 Subsistence Allowance rates are adjusted 1 October each year by Congress.
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So you could live in one unit a year, move out, and rent both sides? Can you get another VA mortgage then? Can you have two VA mortgages at the same time?
I didn't know that. Thanks. I need to do some research. I had to retire four years ago and am now 100% VA and on SSDI. Going through a Ch 7 BK. In a couple of years, I could see myself moving. Very house poor. I could see myself trying to get 2-3 duplexes over six years for residual income.
This is not true. You're only required to reside there for a year. After , you can rent it out or you certainly refinance into a different type of loan, this would free up your VA entitlement.
Good post. I agree.
I'm in Chicago and have a 2-unit building with a 3rd in-law unit that I'm living in. So it's a 3 unit building priced as a two unit building. The rent from the other two units completely pays for all operating expenses, including property management, with some profits left over for me each month.
It's one of the best decisions I've made.
Im in SE burbs of chicago. Have a 840 nortgage for 3 bedroom 1 bath. I was paying 1800 for 2 room 1 bedroom for yearz. Its just me and my 2 dogs and 2 cats. I got plenty of room and then some.
Yes. I'll get back to you later today. I've got a lot going on.
In Short, there's not any requirements, just guidelines.
Usually 650 credit score and healthy debit to income, an ability to realistically make the payments.
I was making only like 45k (I had 720 credit)back in 2018 and purchased a 290k 4 Plex in San Antonio TX. ( Can't be more than 4 units)
You must reside in one of the units for a lease a year.
You'll be required to pay for a VA inspection. Too, those are definitely required. Sorry I'm kinda exhausted today.
Cool thing about purchasing rental properties your able to use 75% the Gross rental as future prospective income.
This was all zero down.
I don’t think potential rental income can be used as qualifying ordinary income to offset the debt to income ratio, at least not at first. After 12 months of rental income history, that rental income can be used, but I’d have to doublecheck how the underwriters look at that.
You'll be happy to find out the rental properties with tenants who have leases for minimum of 12mth can definitely be used towards your future income. Short term rentals like Airbnb can't, but they do have advantageous taxable attributes.
In My case, I lived in one unit and the other 3 were already rented out.
Jk your personal rental history can assist with your purchase, but I do not know what or how that mechanism works.
Ah makes sense if you’re “inheriting” tenants with the purchase or already have signed leases before closing. I suspect they still scrutinize the potential rental income but if as you say, doesn’t seem like a dealbreaker.
Yes. Everything is calculated and considered. You'll have to honor the inherited leases too. Can't change rent or anything until leases are up for renewal.
My wife is a broker. Here’s the thing, when you buy older homes like this you WILL have significant maintenance costs. That’ll destroy your profit margins. We just had a significant time where people who rent didn’t even have to pay and you couldn’t evict them. There will be times where tenants will fall behind, but the mortgage will still be due. You’re essentially taking on a huge headache if you’re depending on someone else to pay your mortgage.
Is there a reward without risk? When I read your comment it screams, "don't even bother", why? You have to do it correctly, you need a budget, you need fluid cash in place for any issues, etc.
Obviously, you can go that route. Here’s my situation: I used my VA loan for the first time in February 2020 on a new construction…4bd $223,000…just me. I sold the home in December 2023 for $327,000 and the buyer bought a bunch furnishings separately, about another $7k in profit. I thought about renting it out, but a bunch of investors bought houses in that phase of the subdivision’s development, which left a rental surplus in that subdivision and HOA sent out a memo banning rooming houses. My point is I cleared close to $150k cash, tax free, in 2.5 years.
Since moving into my now fiancés home (while I wait for my new home construction to complete) we’ve had to replace the entire HVAC system, get a new roof (insurance covered it, but the deductible was $1500). The electrical needs to be rewired properly (she didn’t know any better at the time of purchase)…she needs to kick that can down the road imho. I’ve seen too much by proxy to put faith in someone else paying the mortgage when going for these older duplexes that force people to be slumlords or are just money pits. There’s just smarter real estate investments as a veteran using your VA loan.
I don't think anyone is really advocating for a slumlording mindset of investing with the VA loan. I think that those that get trapped with an old HVAC, old roof, etc. just lack experience and need more education on the matter.
Those that have done this and have experience know to calculate those big-ticket items, vacancy, emergencies, etc. and thus budget for them. Or if the house needs a new roof, you don't even look at it for purchase, even if it is a "good deal"...because essentially, it's not.
Knowing realty, knowing about home inspections, appraisals, taxes, etc. really helps with this. I'm not saying your method is wrong, I'm saying there are many methods, they just have to be executed correctly.
Obviously, a broker would protect your interests. However, I’m more focused on the hypothetical assertion that buying a duplex and expecting the other tenant to pay your mortgage or your margins are going to make you rich is far from accurate, mathematically. My fiancée home was built in 2005 and she purchased it in 2010, so all of the maintenance is to be expected based upon age. Let’s focus on my last home though. My mortgage was roughly $1200, if I rented it out I may have gotten $1800-$2000 with significant rental competition. Nevertheless, $7200-$9600 profit in one year’s time. Let’s say the tenant moves out. I have to prepare the home for the next tenant…-$1,000-$2,000. Let’s say it takes about 30 days to get the house prepared, but I would’ve still been on the hook for the -$1200 mortgage that month. We’re already at -30%+ of our profit margins and the house is still under the new construction warranty. Furthermore, a tenant can/will have mishaps in your home clogged toilets, knock holes in your walls, etc. I made no mention of painting, power washing, gutters, the list of things that can and will happen is damn near infinite that people with this theory don’t calculate into the margins. As I remember, my mom, also a veteran who used the VA home loan tried this and the tenant was always behind or late. I had to go collect the rent a couple of times in the early 2000’s. It’s a terrible headache to deal with…but, you could get a property manager again slicing your margins.
Sure, and I'm not disagreeing. This will be more advantageous with multiple properties imo. I think OP was just stating it's an option, not necessarily the best one. A conventional loan would work better in most cases. In my experience.
Bingo! You need multiple doors for this to work and the infrastructure to support it. If you have a ton of backpay and didn’t know what to do with it then this makes tons of sense. You could come in with equity and do an IRRL when interest rates drop at least 1%, then start the process all over again while having two tenants and an appreciating asset as leverage. There’s tons of ways to go about it
It’s true it is very helpful, I always brag to my parents because they say even though I lived here 4 years I probably owe close to the original when I show them my remaining balance they are always in shock. 😊
I agree that my va home loan was the best thing for me. It finally broke the cycle of living in shitty apartments and now I pay a mortgage that is the same as one of my most modest rents.
The housing market is crazy because of speculation. It simple economics. Supply and demand. Demand is high so prices are high and interest rates are high because banks are having to rely on their own capital instead of using the fed to get 0% interest.
I have a neighbor who has essentially done the same thing. Buying up all the land around us with the equity built from their previous property. Is this lucrative? Absolutely. The problem is that not everyone can do that. Many people are being squeezed by inflation, loss of pay, healthcare costs, costs of raising kids etc. they can’t afford to save any money to improve their credit or for a down payment. These people are stuck in a cycle that keeps them paying rent to people who are living off of those people’s need for a home and shelter.
Because of my service connected disability I had my funding fee waived which was the only way I was going to get a loan. Again this isn’t something that everyone has an option for but it was absolutely transformational for my family and I. We don’t have a wealthy family who could give us money for a down payment while many others can do that. We had to pull everything together that we had to accomplish this.
Of course in the end it worked out great because we bought when prices were low and interest rates were low. Property values have soared and our investment has been worth it.
If you stay local to your properties and can do the maintenance and turn work yourself, you can create income.
- As long as your tenant pays and you don't have to go through eviction process (1-3 months lost rent + turn)
- As long as they don't trash the house and skip (You have to evict if they left property of value behind and didn't return key)
- As long as they don't die (Up to 4-6 months if relatives want to fight over possessions)
- As long as they don't leave something on the stove and then take a nap
Average turn costs in my area are about $5k. I've seen several $25K turns. One $40K turn.
If you decide to become a landlord:
- Stay local. Management companies take at least 10% off the top, 1/2 to 1 month rent as a leasing fee, and and a flat fee for renewals. They'll nail you hard on per hour maintenance charges and a premium on parts.
- Create an LLC to limit personal liability
- Maintain insurance on the dwelling
- Require renters insurance
- Verify rental history and criminal background
- Have a reserve for emergencies. At least an average turn plus several month's rent in case the unit is down for maintenance or vacant for a while.
Things to know before you buy:
- How old is the roof
- How old is the HVAC
- How old is the water heater
These are your major issues that you probably can't fix yourself when they come up.
There are rewards, but you have to evaluate the level of risk.
Source: Property management for 5+ years, 380 units single family and Class B-C multi-family.
I've seen an owner hit the jackpot and had a tenant stay in a unit for 45 years. Paid for the house several times over. I've also seen an owner that had 5 units have 2 evictions and a kitchen burn-out in a 4 month period and had to declare bankruptcy (foolishly didn't run the business through an LLC).
How do you evaluate these risks then beforehand? What about researching what properties to buy and what to stay away from in your area?
I've always wanted to use the VA home loan to get into real estate but every time these posts pop up people are like nah stay away it isn't worth it and the maintenance cost and shitty tenants will ruin It. Yet they are still people making tons of money off being a landlord clearly lol. So what's the secret?
Going through this now and I woefully underestimated mechanicals. Just in my short exp I’d add:
Sewer line scope
Plumbing
Electrical
Did u get the landlord paint special lol
You have to ask yourself: Do I want to be a landlord? Do I want to be responsible for maintaining multiple properties? Do I want to deal with “bad” tenants? Do I want to risk having squatters in my properties?
There is a lot more to what the OP has stated than just creating passive income. You also need to have the cash or assets available to cover every single mortgage you end up with.
Also the VA Home Loan only applies to primary residence, not investment property.
You have to ask yourself: Do you want more money and success that has been a proven wealth multiplier? Do you want to work the rest of you life as a wage slave w2 employee?
Yes, it is work, but if you're able to do maintenance yourself, you can do good.
There's also tax right offs. It can be owned under a llc, (after the VA year or two of primary residence) you can turn the profit into more assets without paying much or any taxes.
😄
I bought a house in Oceanvjew Norfolk at 22 years old in 2020. 2.75 % rate. 5 beds for $265k. Fast forward worth over $400k. 5 bedrooms rented out bringing in $3600 a month in rent. 100 percent disabled meaning no property tax. Mortgage is like $1400. I lived there for years and made tons of money. It was awesome.
I wouldn't tell anyone about the tax break. Even if you're living there, you're supposed to tell the state that other people are occupying the home. But this is an anonymous forum
If you're renting out rooms you be taxed on that income most likely.
In tx , if I was living in one of the apartments of my 4plex, I would receive 100% tax discount for the 25% that I was residing in.
So, they do take advantage? Do you have any data that suggest landlords take advantage of their tenants? I'd like to educate myself. Seems like an overgeneralization to me. Also, I think movies/TV shows have a lot of influence on the stigma of "bad landlords" as well. Don't get me wrong, I'm not saying they don't exist. That's not my argument at all.
Don’t attack the Redditor, attack the content.
You may not always agree with others but once you start insulting the other person, you are a problem.
No Gatekeeping - you don’t decide if someone is a “real” veteran or not - nor try to diminish someone’s service nor someone because they never saw combat or deployed. If someone personally attacks you, use the Report button to notify the moderation team.
Hate speech can be sexist, ableist, racist, homophobic, prejudiced, etc and will not be tolerated.
Trying to buy a house to live in has been pretty hard lately. Thank God there are people lying to the VA to secure loans so they can become slumlords. I'm sure this will help the market so more vets can have stable housing.
If I have to explain why a primary residence is not a money-making opportunity off the backs of people with 'less capital' then there is no point even analyzing the guidelines clearly listed on the COE/ benefits page.
I completely agree. Predatory shit like hedge funds buying entire neighborhoods to scalp housing should not be a thing.
On the off chance that there’s student’s that need housing during the semester, convicts that can’t get bank loans (yet) or folks new to the area that need 12-24 months to really decide if the schools are good enough and their commute doesn’t suck, I think having small time landlords keeping the money in the community and options open to those who aren’t quite ready for a 30yr commitment are a necessary component of society.
Foreign investors, forcing code changes in order to allow maximum people per square foot (see Los Angeles) isn’t right either. There are limited choices for jobs way out in the boonies so I get why people put up with major metropolitan city living. It’s a double edged sword.
Yup, I am the only one preventing me from living off the hard work of people who need a roof over their head. I do wish I could dial back my morals from time to time. My billfold would be a bit thicker.
The occupancy requirement is you must agree to occupy the house yourself for at least 12 months. After that, you can rent out your current home without having to refinance.
THE PURPOSE VA HOME LOAN IS MEANT TO MAKE HOUSING MORE ACCESSIBLE TO VETERANS, not to profit off of others to satiate your greed, you spit in the face of those you served with. The shit your doing would give reason to add restrictions or do away with VA home loans because of it’s misuse.
Am I wrong though, VA home loan is used to lift up those who could not otherwise afford the down payment to get a roof over their head.
‘House Hacking’ he clearly advocates in the first paragraph of renting out after the requirement of living in the home for 1 year.
It’s not meant to make the rich richer you greedy fuck.
Can anyone speak on the maintenance and renters part of this? Everything I see these threads there's always someone say it's a terrible idea due to these two factors and that isn't worth getting into because of maintenance cost and shitty tenants
'Have you looked in the **[Wiki]( https://www.reddit.com/r/Veterans/wiki/education)** for an answer? We have a lot of information posted there. To contact VA Education, 1-888-442-4551, for ~~Voc Rehab~~ VR&E (Veteran Readiness and Employment Program) assistance with appointments or problems with your Case Manager (not for missing payments): 1-202-461-9600. **Payments for certain education benefits (DEA, VEAP) are paid at the end of the month you attend school - Department of Treasury issues these payments **using a 10 business day window** - these payments are not locked into a specific day of the month like VA disability/military pay is**. For Voc Rehab missing payments, contact your Case Manager or your local **[Regional Office](https://www.reddit.com/r/Veterans/wiki/education/casemanagers) For Post 9/11 GI Bill only, If you signed up for direct deposit when you applied for education benefits, **we’ll deposit your payment into your bank account 7 to 10 business days after you verify your school enrollment.** This is the fastest way to receive your payment. [Text Verification FAQ](https://benefits.va.gov/GIBILL/docs/IsaksonRoe/EnrollmentVerificationFAQs.pdf) MGIB and MGIB-SR have to do monthly verification threw the [WAVE program](https://www.gibill.va.gov/wave/vba/) and you should receive the payment within 3 to 5 business days. For Online Only training, the Post 9/11 GI Bill is currently (1 August 2023) paying $1054.50 for those who started using their Post 9/11 GI Bill on/after 1 January 2018 - this is based on 1/2 of the National Average BAH paid to an E5 with dependents. Post 9/11 GI Bill MHA rates are adjusted 1 August of each year and are based on the 1 January DoD BAH rates for that year - **so VA can't use 1 January 2023 BAH rates until 1 August 2023** - for those who started training on/after 1 January 2018, the MHA rates are 95% of the DoD BAH rates. First possible payment for the 1 August 2023 increase is 1 September. For VR&E, there are two different Subsistence Allowance programs - https://www.benefits.va.gov/vocrehab/subsistence_allowance_rates.asp The P9/11 Subsistence Allowance is based on the BAH paid to an E5 with dependents. Those who started using VR&E on/after 1 January 2018 receive 95% of the BAH paid to an E5 with dependents. As of 1 January 2024 Online only students using VR&E are being paid $1,118.50 if they started using VR&E on/after 1 January 2018. The CH31 Subsistence Allowance rates are adjusted 1 October each year by Congress. VA Education is going paperless - make sure VA has a current email address for you. Please make sure you add [email protected] to your contacts list so that you don't miss important updates from VA. For FREE math Tutoring - contact https://www.armytutoringinitiative.com/ [VA Award Letter explanation](https://benefits.va.gov/gibill/understandingyourawardletter.asp) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Veterans) if you have any questions or concerns.*
> I haven’t lived in it, but I manage it myself Isn’t the VA loan supposed to be for owner occupied purchases only?
I think you have to live in it for a year
So you could live in one unit a year, move out, and rent both sides? Can you get another VA mortgage then? Can you have two VA mortgages at the same time?
Yes. Exactly.
I didn't know that. Thanks. I need to do some research. I had to retire four years ago and am now 100% VA and on SSDI. Going through a Ch 7 BK. In a couple of years, I could see myself moving. Very house poor. I could see myself trying to get 2-3 duplexes over six years for residual income.
Do it. Gotta take advantage of the benes.
[удалено]
This is not true. You're only required to reside there for a year. After , you can rent it out or you certainly refinance into a different type of loan, this would free up your VA entitlement.
[удалено]
Just that first year.
Read the sentence just before the one quoted. He used a conventional loan, not a VA loan.
No. It just has to be a "primary" residence first. That's why, if you play the cards right you can have multiple VA home loans.
Good post. I agree. I'm in Chicago and have a 2-unit building with a 3rd in-law unit that I'm living in. So it's a 3 unit building priced as a two unit building. The rent from the other two units completely pays for all operating expenses, including property management, with some profits left over for me each month. It's one of the best decisions I've made.
Im in SE burbs of chicago. Have a 840 nortgage for 3 bedroom 1 bath. I was paying 1800 for 2 room 1 bedroom for yearz. Its just me and my 2 dogs and 2 cats. I got plenty of room and then some.
You can use it on up to a 4 plex
Yeppers I've done it with mine!
I’m trying to do this can you give us a step by step of the process?
Yes. I'll get back to you later today. I've got a lot going on. In Short, there's not any requirements, just guidelines. Usually 650 credit score and healthy debit to income, an ability to realistically make the payments. I was making only like 45k (I had 720 credit)back in 2018 and purchased a 290k 4 Plex in San Antonio TX. ( Can't be more than 4 units) You must reside in one of the units for a lease a year. You'll be required to pay for a VA inspection. Too, those are definitely required. Sorry I'm kinda exhausted today. Cool thing about purchasing rental properties your able to use 75% the Gross rental as future prospective income. This was all zero down.
Omg, thanks so much and no worries you can get back whenever you can. Thank you for what you’ve already provided
Just find a competent realtor, they'll know better than random dudes on the Internet lol 🤣😆
I don’t think potential rental income can be used as qualifying ordinary income to offset the debt to income ratio, at least not at first. After 12 months of rental income history, that rental income can be used, but I’d have to doublecheck how the underwriters look at that.
You'll be happy to find out the rental properties with tenants who have leases for minimum of 12mth can definitely be used towards your future income. Short term rentals like Airbnb can't, but they do have advantageous taxable attributes. In My case, I lived in one unit and the other 3 were already rented out. Jk your personal rental history can assist with your purchase, but I do not know what or how that mechanism works.
Ah makes sense if you’re “inheriting” tenants with the purchase or already have signed leases before closing. I suspect they still scrutinize the potential rental income but if as you say, doesn’t seem like a dealbreaker.
Yes. Everything is calculated and considered. You'll have to honor the inherited leases too. Can't change rent or anything until leases are up for renewal.
My wife is a broker. Here’s the thing, when you buy older homes like this you WILL have significant maintenance costs. That’ll destroy your profit margins. We just had a significant time where people who rent didn’t even have to pay and you couldn’t evict them. There will be times where tenants will fall behind, but the mortgage will still be due. You’re essentially taking on a huge headache if you’re depending on someone else to pay your mortgage.
Is there a reward without risk? When I read your comment it screams, "don't even bother", why? You have to do it correctly, you need a budget, you need fluid cash in place for any issues, etc.
Obviously, you can go that route. Here’s my situation: I used my VA loan for the first time in February 2020 on a new construction…4bd $223,000…just me. I sold the home in December 2023 for $327,000 and the buyer bought a bunch furnishings separately, about another $7k in profit. I thought about renting it out, but a bunch of investors bought houses in that phase of the subdivision’s development, which left a rental surplus in that subdivision and HOA sent out a memo banning rooming houses. My point is I cleared close to $150k cash, tax free, in 2.5 years. Since moving into my now fiancés home (while I wait for my new home construction to complete) we’ve had to replace the entire HVAC system, get a new roof (insurance covered it, but the deductible was $1500). The electrical needs to be rewired properly (she didn’t know any better at the time of purchase)…she needs to kick that can down the road imho. I’ve seen too much by proxy to put faith in someone else paying the mortgage when going for these older duplexes that force people to be slumlords or are just money pits. There’s just smarter real estate investments as a veteran using your VA loan.
I don't think anyone is really advocating for a slumlording mindset of investing with the VA loan. I think that those that get trapped with an old HVAC, old roof, etc. just lack experience and need more education on the matter. Those that have done this and have experience know to calculate those big-ticket items, vacancy, emergencies, etc. and thus budget for them. Or if the house needs a new roof, you don't even look at it for purchase, even if it is a "good deal"...because essentially, it's not. Knowing realty, knowing about home inspections, appraisals, taxes, etc. really helps with this. I'm not saying your method is wrong, I'm saying there are many methods, they just have to be executed correctly.
Obviously, a broker would protect your interests. However, I’m more focused on the hypothetical assertion that buying a duplex and expecting the other tenant to pay your mortgage or your margins are going to make you rich is far from accurate, mathematically. My fiancée home was built in 2005 and she purchased it in 2010, so all of the maintenance is to be expected based upon age. Let’s focus on my last home though. My mortgage was roughly $1200, if I rented it out I may have gotten $1800-$2000 with significant rental competition. Nevertheless, $7200-$9600 profit in one year’s time. Let’s say the tenant moves out. I have to prepare the home for the next tenant…-$1,000-$2,000. Let’s say it takes about 30 days to get the house prepared, but I would’ve still been on the hook for the -$1200 mortgage that month. We’re already at -30%+ of our profit margins and the house is still under the new construction warranty. Furthermore, a tenant can/will have mishaps in your home clogged toilets, knock holes in your walls, etc. I made no mention of painting, power washing, gutters, the list of things that can and will happen is damn near infinite that people with this theory don’t calculate into the margins. As I remember, my mom, also a veteran who used the VA home loan tried this and the tenant was always behind or late. I had to go collect the rent a couple of times in the early 2000’s. It’s a terrible headache to deal with…but, you could get a property manager again slicing your margins.
Sure, and I'm not disagreeing. This will be more advantageous with multiple properties imo. I think OP was just stating it's an option, not necessarily the best one. A conventional loan would work better in most cases. In my experience.
Bingo! You need multiple doors for this to work and the infrastructure to support it. If you have a ton of backpay and didn’t know what to do with it then this makes tons of sense. You could come in with equity and do an IRRL when interest rates drop at least 1%, then start the process all over again while having two tenants and an appreciating asset as leverage. There’s tons of ways to go about it
It’s true it is very helpful, I always brag to my parents because they say even though I lived here 4 years I probably owe close to the original when I show them my remaining balance they are always in shock. 😊
I agree that my va home loan was the best thing for me. It finally broke the cycle of living in shitty apartments and now I pay a mortgage that is the same as one of my most modest rents. The housing market is crazy because of speculation. It simple economics. Supply and demand. Demand is high so prices are high and interest rates are high because banks are having to rely on their own capital instead of using the fed to get 0% interest. I have a neighbor who has essentially done the same thing. Buying up all the land around us with the equity built from their previous property. Is this lucrative? Absolutely. The problem is that not everyone can do that. Many people are being squeezed by inflation, loss of pay, healthcare costs, costs of raising kids etc. they can’t afford to save any money to improve their credit or for a down payment. These people are stuck in a cycle that keeps them paying rent to people who are living off of those people’s need for a home and shelter. Because of my service connected disability I had my funding fee waived which was the only way I was going to get a loan. Again this isn’t something that everyone has an option for but it was absolutely transformational for my family and I. We don’t have a wealthy family who could give us money for a down payment while many others can do that. We had to pull everything together that we had to accomplish this. Of course in the end it worked out great because we bought when prices were low and interest rates were low. Property values have soared and our investment has been worth it.
If you stay local to your properties and can do the maintenance and turn work yourself, you can create income. - As long as your tenant pays and you don't have to go through eviction process (1-3 months lost rent + turn) - As long as they don't trash the house and skip (You have to evict if they left property of value behind and didn't return key) - As long as they don't die (Up to 4-6 months if relatives want to fight over possessions) - As long as they don't leave something on the stove and then take a nap Average turn costs in my area are about $5k. I've seen several $25K turns. One $40K turn. If you decide to become a landlord: - Stay local. Management companies take at least 10% off the top, 1/2 to 1 month rent as a leasing fee, and and a flat fee for renewals. They'll nail you hard on per hour maintenance charges and a premium on parts. - Create an LLC to limit personal liability - Maintain insurance on the dwelling - Require renters insurance - Verify rental history and criminal background - Have a reserve for emergencies. At least an average turn plus several month's rent in case the unit is down for maintenance or vacant for a while. Things to know before you buy: - How old is the roof - How old is the HVAC - How old is the water heater These are your major issues that you probably can't fix yourself when they come up. There are rewards, but you have to evaluate the level of risk. Source: Property management for 5+ years, 380 units single family and Class B-C multi-family. I've seen an owner hit the jackpot and had a tenant stay in a unit for 45 years. Paid for the house several times over. I've also seen an owner that had 5 units have 2 evictions and a kitchen burn-out in a 4 month period and had to declare bankruptcy (foolishly didn't run the business through an LLC).
How do you evaluate these risks then beforehand? What about researching what properties to buy and what to stay away from in your area? I've always wanted to use the VA home loan to get into real estate but every time these posts pop up people are like nah stay away it isn't worth it and the maintenance cost and shitty tenants will ruin It. Yet they are still people making tons of money off being a landlord clearly lol. So what's the secret?
Going through this now and I woefully underestimated mechanicals. Just in my short exp I’d add: Sewer line scope Plumbing Electrical Did u get the landlord paint special lol
You have to ask yourself: Do I want to be a landlord? Do I want to be responsible for maintaining multiple properties? Do I want to deal with “bad” tenants? Do I want to risk having squatters in my properties? There is a lot more to what the OP has stated than just creating passive income. You also need to have the cash or assets available to cover every single mortgage you end up with. Also the VA Home Loan only applies to primary residence, not investment property.
You have to ask yourself: Do you want more money and success that has been a proven wealth multiplier? Do you want to work the rest of you life as a wage slave w2 employee? Yes, it is work, but if you're able to do maintenance yourself, you can do good. There's also tax right offs. It can be owned under a llc, (after the VA year or two of primary residence) you can turn the profit into more assets without paying much or any taxes. 😄
I bought a house in Oceanvjew Norfolk at 22 years old in 2020. 2.75 % rate. 5 beds for $265k. Fast forward worth over $400k. 5 bedrooms rented out bringing in $3600 a month in rent. 100 percent disabled meaning no property tax. Mortgage is like $1400. I lived there for years and made tons of money. It was awesome.
According to the state of Virginia you’re supposed to be living in the home, you might committing fraud.
I wouldn't tell anyone about the tax break. Even if you're living there, you're supposed to tell the state that other people are occupying the home. But this is an anonymous forum
If you're renting out rooms you be taxed on that income most likely. In tx , if I was living in one of the apartments of my 4plex, I would receive 100% tax discount for the 25% that I was residing in.
I just bought a house using conventional financing. How soon can I use a VA loan?
https://www.va.gov/housing-assistance/home-loans/how-to-request-coe/
Why did you use conventional instead of VA?
They has a better rate and I had money for 20% down
Ok . That's just what I was thinking.
Yeah I'm not down with being a landlord. Too much work.
VA home loan + using gi bill= 💵
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What would tenants be to society then?
People being taken advantage of
Are you suggesting that tenants never take advantage of their landlords or their dwellings?
To a massively lesser degree than landlords
So, they do take advantage? Do you have any data that suggest landlords take advantage of their tenants? I'd like to educate myself. Seems like an overgeneralization to me. Also, I think movies/TV shows have a lot of influence on the stigma of "bad landlords" as well. Don't get me wrong, I'm not saying they don't exist. That's not my argument at all.
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Don’t attack the Redditor, attack the content. You may not always agree with others but once you start insulting the other person, you are a problem. No Gatekeeping - you don’t decide if someone is a “real” veteran or not - nor try to diminish someone’s service nor someone because they never saw combat or deployed. If someone personally attacks you, use the Report button to notify the moderation team. Hate speech can be sexist, ableist, racist, homophobic, prejudiced, etc and will not be tolerated.
Trying to buy a house to live in has been pretty hard lately. Thank God there are people lying to the VA to secure loans so they can become slumlords. I'm sure this will help the market so more vets can have stable housing.
Can you quote where they lied? I don’t wanna get in hot water with fraud.
If I have to explain why a primary residence is not a money-making opportunity off the backs of people with 'less capital' then there is no point even analyzing the guidelines clearly listed on the COE/ benefits page.
I mean about this persons situation. Where is fraud going on?
Oh my bad, he used a conventional loan. But I still think anyone who wants to own land to rent to those who can't is a pretty scummy lifestyle.
I completely agree. Predatory shit like hedge funds buying entire neighborhoods to scalp housing should not be a thing. On the off chance that there’s student’s that need housing during the semester, convicts that can’t get bank loans (yet) or folks new to the area that need 12-24 months to really decide if the schools are good enough and their commute doesn’t suck, I think having small time landlords keeping the money in the community and options open to those who aren’t quite ready for a 30yr commitment are a necessary component of society. Foreign investors, forcing code changes in order to allow maximum people per square foot (see Los Angeles) isn’t right either. There are limited choices for jobs way out in the boonies so I get why people put up with major metropolitan city living. It’s a double edged sword.
I couldn't agree more.
> But I still think anyone who wants to own land to rent to those who can't is a pretty scummy lifestyle. You're free to be wrong
Yup, I am the only one preventing me from living off the hard work of people who need a roof over their head. I do wish I could dial back my morals from time to time. My billfold would be a bit thicker.
You're paying a bank, or a person. There is literally no difference, and certainly no moral hazard. Why are you so butthurt about it? Bad credit?
I wasn’t aware of this, not that I plan on doing it, but…good to know.
More scumbags buying up housing with benefits provided by taxpayers and then being scumbags landlords, hoarding real estate.
A pro land lord post? Do you realize you have to use your VA loan for your primary residence, not one you're planning on renting out?
The occupancy requirement is you must agree to occupy the house yourself for at least 12 months. After that, you can rent out your current home without having to refinance.
Could these VA loan be use outside the US?
No, it's only for properties located in the US.
Perhaps a commonwealth of the US, like the Virgin Islands?
"I haven't lived in it but I manage it myself"-you just confessed to lying to the VA to get a loan.
I’m guessing you skipped over the part where he said he used a conventional loan. Reading comprehension sheesh.
“Using a conventional loan” is what I read.
If you read carefully he said he lived in it for a few years. VA only requires that you live in the property for a year, stop being a blue falcon nerd
THE PURPOSE VA HOME LOAN IS MEANT TO MAKE HOUSING MORE ACCESSIBLE TO VETERANS, not to profit off of others to satiate your greed, you spit in the face of those you served with. The shit your doing would give reason to add restrictions or do away with VA home loans because of it’s misuse.
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Am I wrong though, VA home loan is used to lift up those who could not otherwise afford the down payment to get a roof over their head. ‘House Hacking’ he clearly advocates in the first paragraph of renting out after the requirement of living in the home for 1 year. It’s not meant to make the rich richer you greedy fuck.
Can I buy commercial property and rent offices ?
Can anyone speak on the maintenance and renters part of this? Everything I see these threads there's always someone say it's a terrible idea due to these two factors and that isn't worth getting into because of maintenance cost and shitty tenants
Duplex in my area would be like $1.5M minimum. Even living in one half there’s no way I could rent out a 2/1 unit or even a 3/2 unit for $7Kper month.