Homes near military bases in the South and Texas offer the best returns for single-family rental investors (SFRs).
IRVINE, Calif., Aug. 24, 2016 – HomeUnion®, an online real estate investment management firm, has released new data on the best military towns for investing in single-family rental (SFR) properties based on average cap rates, which are the relationship between an investment property’s net operating income (rents minus expenses) in the first year of ownership and the purchase price of the property. To be included in the list, military bases must have a population of active duty personnel and their families of 15,000 or higher.
SFRs near Warner Robbins, Ga., a U.S. Air Force Base which supports 19,500 active service members and family, have average cap rates of 7 percent. Meanwhile, rental housing in Watertown, N.Y., where the Fort Drum Army base is located, is also an excellent investment with cap rates of 6.9 percent on average. SFRs in Fort Jackson in Columbia, S.C., have average cap rates of 6.3 percent.
“The military bases included in this study are located throughout the United States,” explains Steve Hovland, director of research for HomeUnion®. “SFRs near military bases that offer the highest returns, however, are primarily located in the South and Midwest,” he adds. One California base made the list – Twentynine Palms, a Marine Corps branch with 17,700 people in the Inland Empire.
“Acquiring SFRs near military bases may be one of the best real estate investment strategies, for a variety of reasons,” explains Don Ganguly, CEO of HomeUnion®.
“For example, military service members are employed by the Federal government, which provides greater employment certainty than the private sector. Demand from service men and women is stable, particularly as the military limits overseas deployments following two protracted wars. In addition, the military compensates service members based on market-rate rents, rank and dependents, giving landlords incentive to lease to military personnel and their families,” he adds.
“The transient nature of serving in the military also means that there is a substantial population of government workers that prefer to rent rather than buy, driving demand over the short and long term,” adds Hovland.
Here’s a complete list of the best military towns for investing in SFRs:
|Military Base||Metro||State||MHA  Cap Rate||MHA Area Rent||MHA Price||Active Duty & Family||Branch|
|Robins AFB||Warner Robins||GA||7.0%||$965||$93900||19500||Air Force|
|Sheppard AFB||Wichita Falls||TX||5.9%||$883||$100900||16800||Air Force|
|Fort Sam Houston||San Antonio||TX||5.6%||$1294||$152500||19600||Army|
|Offutt AFB||Omaha||NE||5.5%||$1193||$140800||23300||Air Force|
|Eglin AFB||Valparaiso||FL||5.2%||$1382||$171100||20700||Air Force|
|Camp Lejeune||Jacksonville||NC||5.0%||$994||$129300||46100||Marine Corps|
|Twentynine Palms||Inland Empire||CA||4.9%||$1062||$135900||17700||Marine Corps|
|Mayport Naval Station and Jacksonville NAS||Jacksonville||FL||4.8%||$1251||$174700||76700||Navy|
|Cherry Point MCAS||Havelock||NC||4.8%||$1064||$153200||35200||Marine Corps|
|Langley AFB||Newport News||VA||4.7%||$1378||$189500||18000||Air Force|
 MHA (Military Housing Area): MHAs are a set of zip codes set aside by the government to compute BAH (Basic Allowance for Housing). BAH is an allowance determined by the U.S. Dept. of Defense prescribed by geographic duty location, pay grade, and dependency status. It provides uniformed service members equitable housing compensation based on real estate prices in local civilian housing markets when government quarters are not provided.
HomeUnion® is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and proprietary analytics to incorporate data on over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 18 locations. HomeUnion®’s role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.
Communications Manager, HomeUnion®