This article is going to give you two ways to use your VA Loan to help you invest in property.
In truth, there are several other ways to “Invest” using a VA loan, but this article doesn’t cover them because they blur the line between legally allowed and bending the rules.
There are several loopholes and gray areas where you can use your VA loan to buy several small units in a multi-complex place and then sell off your units or rent them out.
However, as mentioned, none of these are completely on the level, and just because they are loopholes right now, they may not be in the future. This article covers the two ways you can invest without breaking the VA loan rules.
Things You Should Know
The VA loan companies are private lenders that are bound by rules. Their agents may be willing to bend the rules, but the company they represent is not and will distance themselves from any wrongdoing the moment something is investigated.
The loans are to help even the balance for military personnel and their families. To help first-time buyers who are struggling to get onto the housing ladder because of the complexities and problems caused by their job.
VA loans are not like student loans. They are not handed out to everybody. VA loans are not there to help you get richer.
You can use services like What’s My Payment to budget for your upcoming bills and possible expenses.
If you are planning long term, then it is possible to save money through the use of a VA loan.
However, know that it is easily possible to get better interest rates than those offered by VA loans.
The point of VA loans is “Ease of entry” into the housing market. They are not offering bad interest rates, but don’t let the VA lending companies (private companies) convince you they are the best possible rates on the market.
Plan your budget carefully because a saving may not turn into a profit, but poor planning may turn into a loss.
Method One – Rent Out The House After A Certain Time Period
The VA loan eligibility rules and the loan requirements are pretty specific. There are a lot of them and it will take time to qualify and then find the right house and get the process done.
However, while you are scouring your epic amounts of paperwork, take a look at how long you have to live in the house as your primary residence.
Some VA lenders are pretty lax and will only insist that you live in the house a year after purchase.
They understand that you may be deployed to other places or may have to rent other places for a certain amount of time.
Check how long you have to live in the house as your primary residence, and then move out and start letting out the house.
Obviously, if you wish to turn a profit, you will have to live somewhere else without paying extra money, but otherwise, you can turn your house into an investment by letting it out to renters.
Method Two – Fix Up A House And Eventually Sell It
This is by far the best way to turn your VA loan into a strong investment. You buy a house that is a bit of a fixer-upper.
Preferably for a fairly low cost and in a place where the local area is not going to drag the house price down.
You apply for a VA loan to buy the house, but also with enough money left over to fix up the house and make it energy efficient and so forth.
There is quite a bit of wiggle room when it comes to making your house more efficient.
Unless you are planning to add a three-story power plant to your garage, then there is a good chance you will qualify for a bigger VA loan.
You use the money to fix up the house, live in it for a few years and let it appreciate in value as you improve it (gardens and buildings take years to fix correctly).
You can pay off your house in a few years because you didn’t pay a massive amount for it, and when your house is paid off, you will have a valuable property that is worth far more than you paid for it.