Serving your country is a great honor to uphold. Not only are you passing on military tradition but you are improving your mind and body. Many people join the military to travel or learn a trade that would take several years in the civilian world. Veterans understand the financial benefits of being a service men. Here are 3 reasons why being a veteran saves money on real estate/homeownership.
People take look at the military as a way to have trips don’t last long.If you view the military as a system from which it is your mission to extract as much experience, education, and training as possible to prepare you for the rest of your life, then you’ll be okay.That being said the military has a lot of benefits to improve your financial standing. Rent and food are a large part of living costs. When you are in the military, food and housing are subsidized .This allows you to save money every month towards a home or an investment property. Depending on how you score on the ASVAB your job in the military can set you up for a high paying civilian job. Most people don’t get rich but if you practice discipline and live below your means you can retire early, send your kids to private school and live the good life. Military members can shop tax free at the Army & Air Force Exchange Service.Education is important in how people succeed. Through the military you can earn a 4 year degree in 3 years taking night school. The government pays for most of your tuition and books.Free health insurance for you and your family. If you happen to serve your 20 years you can enjoy a pension of at least $25,000 a year for the rest of your life.
VA Loans /Other Financial Products
The VA loan is a financial product for veterans. It is a low interest rate loan.VA loans can’t be used on investment properties only for primary residences.However the VA loan can be used on multi unit properties that you reside in. No down payment required for VA loans. You can borrow up to $417,000. This is more than enough to buy a large property in most places in the country. The two strategies to make Real estate work is Buy/Hold and Cash Flow. Basically hold real estate and wait for the price to increase or enjoy monthly income from renters.2 major mistakes first time investors have is failing to calculate cash flow and underestimating expenses. Cash flow ideally should be more than 1 % of purchase price a month. Another factor to keep in mind is appreciation. Most properties in the US will appreciate due to population increase and scarcity of land. Location does matter. A property in Los Angeles, California will appreciate faster than a property in Atlanta, Georgia. Here is a hypothetical situation where veteran can build wealth in real estate. First year buy a home for $103,000 using VA loan. Rent out this property at $1450 a month .7 years later buy another property using the VA loan for $167,000. Live in this property and rent out at $1575 a month. Buy a third property for $100,000 after 4 years. By this time $100,000 still left in VA eligibility. You live in one property while renting out the two other properties. Sell the first property for $170,000-$200,000. Reinvest profit into a 1031 exchange and buy a commercial property for $300,000. Refinance existing loans to free up VA eligibility. In less than 15 years you would have amassed over $700,000 in equity and receive over $40,000 in annual rental income.Chase bank is currently offering free checking accounts to veterans. For those who are in the credit building process the Navy Federal Credit Union offers low cost secured credit cards that can improve your credit score in 6 months to a year.
Overseas Taxation laws
As a United States citizen you have to pay taxes even if you live aboard. There are few exceptions to this rule. One being If you are ever deployed as enlisted or warrant officer to areas considered the front line even places like Bahrain, Qatar, and Kuwait, then your monthly military pay is excluded from gross income. Essentially no taxes. And as an added bonus while you’re in a combat zone, you can contribute that tax-free income into a Roth IRA (or Roth TSP). Once you retire you can withdraw from this account tax free.