Another Simple Way to Build Wealth in the Military – Purchase a Rental Property at Every Duty Station

by | 13Jan2018 | Military Millions, Real estate | 5 comments

In the military, we move way more frequently than the average person. I’ve been in 16 years and I’ve moved 8 times. Do you want a simple way to build wealth? Become a real estate investor by purchasing a property at each duty station and keeping it as an investment when you move. Here’s how this would work…

When you find out you are going to be moving to a new duty station, you start looking into whether there are properties in the area you could purchase, live in while you are there, and then keep as an investment when you leave. A few strategies to consider include:

  • Purchase a multi-family unit, live in one of the units, and rent the rest of the units out. If you make enough, you can use the surplus from the rental units to pay for your mortgage, living rent/mortgage free. This is commonly referred to as “house hacking.”
  • Purchase a property that is habitable but needs some serious work. Rehab it while you live in it, then keep it as an investment you rent out when you leave. This is known as the BRRRR stategy, which stands for Buy, Rehab, Rent, Refinance, and Repeat.

Using these two strategies (and perhaps others), you just repeat this every time the military tells you that you have to move. After a 20+ year military career, you’ll have a pension and a serious portfolio of rental properties. That is one way of slowing building some real wealth.

Where can you learn how to do this? I’ll admit that I haven’t personally done this, but this guy has. And he wrote a guide to tell you how to do it. In addition, the Bigger Pockets blog and podcast are great resources. Finally, some excellent real estate books that I’ve personally read include:

Purchase the books, get them from the library, learn how to do this, and start making your own Military Millions by building a real estate empire.

Personal Capital

5 Comments

  1. Rich on Money

    Hey! So I’m the guy you refer to in the article as someone who has built up a serious portfolio of rental properties. Thanks for the mention!

    I’m careful not to buy a property at every duty station, as some locations might be bad for rentals. If the area is expensive, like San Diego, Honolulu, or D.C., it is usually a bad idea to buy a property there. I make sure the cities I buy in will cash flow as rentals. If they won’t, I rent instead. All 20 of my properties are in Alabama, because that’s where I get the best cash flow!

    Reply
    • Still In

      Thanks for the info. Like I said when we were dialoguing before the post, I haven’t done this so your real world experience and input is great.

      Reply
  2. B

    I’m torn… We purchased our house in San Diego for 366K in 2012 and current, online values (often inflated, I know) put house around 540K. I always thought I would hold on to it as rental income but am tempted to sell and profit. We are looking to go overseas for next duty station and with that big a chunk of change to invest and not having to worry about maintaining a rental property has me thinking…. any advice?

    Reply
    • Rich on Money

      That’s a tough question.

      First of all, if you rent this property out when your gone, what will your return on investment be? Use this to calculate. https://richonmoney.com/how-much-money-will-i-make-from-my-rental/
      But you have another interesting question. You have so much equity in the property, even if you have a good return on investment, you might have a very low return on equity. It may be a good idea to sell that property and find somewhere else to have that money grow faster. Just keep in mind, if you decide to put that money in the market, it may drop in the shorter term. You should be thinking long term, in which case it will eventually come back, and you will make money over the long run. My guess is your property won’t do well as a rental once you are gone, so you should sell, but let me know how the numbers work out. Hopefully you’ve lived in this property 2 of the last 5 years, and you can take the money with you tax free.

      Reply
      • B

        Thanks for the reply. Great website…lots of calculations. I’ll hold on that for now, my mind was spinning… more so on the fact that you own a house in Alabama that cost ONLY 45K!! I guess I will wait and see when it is time to PCS on where we end up and what our house is actually worth at that time. We definitely look long term with investing, so know to expect ups and downs in the market. Thanks for your time!

        Reply

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