First-time single-family rental real estate investors sometimes have difficulty deciding where to purchase property. Location is one of the most important elements of investing success, but it can be tricky for novices to pick metro areas that will offer consistent growth and strong returns on their investment. Nearby military bases provide one clue to a city’s investment potential.
For several reasons, the presence of a military base signals that an area has a strong rental culture that can support investors. Skilled investors recognize this and other indicators to pick out the best places to purchase a home for rent.
The need for rental homes
At the most basic level, a military base guarantees a consistent source of local employment and a high number of people who need to live in the area for a relatively short amount of time. Anyone who has served or been friendly with a military family knows that it’s common for these families to move across the country every few years for a new assignment. This can be rough on families who want to settle into a home and enjoy a typical suburban life. Single-family rental properties provide a way for these families to enjoy the perks of homeownership without committing to a home for the long term.
Military families move 10 times more often than civilian families, according to the Department of Defense. Home rentals provide these families with a sense of security they might not have otherwise.
Financial bonuses help guarantee tenants
The government also aids military members in their quest to find housing, which means it may be easier for investors who purchase homes near military bases to find and maintain tenants over time. The military provides servicemembers with a Basic Housing Allowance, or BHA, which is a stipend that assists with housing expenses, according to Military.com. The actual amount of money in the BHA varies for individual service members, and is calculated using a formula that accounts for local housing prices, the individual’s rank and his or her number of dependents.
In cases where government housing is not provided, the military provides a BHA in accordance with local economic conditions. This guarantees service members in the area can afford local housing. By pricing their properties in accordance with local market standards, investors can ensure their properties will be considered by military families.
HomeUnion® makes it easy to find homes that are located in areas near military bases and in a range of other metro areas that offer strong potential returns. Register on HomeUnion®’s site to view hundreds of prevetted properties across the country.