Here in North Carolina, we have a number of military installations, both large and small – and these communities can make terrific markets for Real Estate IRA investors.
Fort Bragg, outside of Fayetteville, and home to the storied 82nd Airborne Division and the Special Forces school, is perhaps the most well known military community in the state. But don’t overlook Camp Lejeune and Cherry Point, both U.S. Marine Corps Installations, New River Air Station, Pope Air Force Base, Seymour Johnson Air Force Base, and the Coast Guard stations at Wrightsville Beach, Bogue Inlet, Elizabeth City, Emerald Isle and Hobucken.
Each of these installations offers a steady stream of potential renters traveling in and out of the community every three years – all of whom with steady employment and generally screened for criminal behavior and regularly tested for drug use – at least the service member.
In many ways, it’s a landlord’s dream.
Advantages for Real Estate IRA Owners
Many of these service members receive a housing allowance, called BAH, or Basic Allowance for Housing. This is tax-free money the government gives these service members and their families to find off post housing when on-post housing is not available – and except for single junior enlisted service members who usually live in the barracks on post, there is almost always a shortage of housing on base.
BAH comes in two types: Type 1 for service members with no dependents, and a higher Type 2 for service members with dependents. BAH payments vary with the cost of housing for each community, but both are just fine for renting a Real Estate IRA property for the three years or so families are stationed in one place. And many military families will even use their BAH to buy a home outright.
You can view exactly what the current BAH rates are in your area for each different rank here.
Advantages of renting Real Estate IRA properties to military members include the following:
- At least one member of the family is paid reliably every two weeks. While there are reductions in force happening, service members and their Real Estate IRA owning landlords won’t have to worry about a surprise layoff, and while there are occasional pay snafus in any large bureaucracy, service members have more reliable incomes than the vast majority of renters.
- BAH payments are over and above base pay. So be sure to use both the base pay/salary for your prospective renter’s rank and time in service, plus expected BAH payments, to calculate their total income for rent qualification.
- Active duty service members have relatively low crime rates compared to others in their age groups, and have to pass periodic drug tests.
- When a military family does have trouble making their rent, they are often eligible for emergency short-term rental assistance from the Red Cross or from one of the military relief societies. This makes them that much more safe and secure and reliable as tenants.
There are a couple of things Real Estate IRA owners should be aware of: If the service member deploys on military orders, they are usually entitled to release from a lease – usually with 30 days notice. Also, although they receive BAH, there is not guarantee that they won’t spend it on something else when their rent is due. You will still want to do background checks on every applicant, just as you would with a non-military renter.
Also, there is a certain amount of economic risk involved in buying homes near a military base. A base closure could have a severe effect on property values, as could a restructuring that causes a large unit to move to a different installation. But properties near beautiful coast lines will probably always have a market.
American IRA, LLC, works with many successful real estate owners all across the country. Our offices are in Charlotte and Asheville, North Carolina – but you don’t have to be a North Carolina resident to open an account with American IRA.
For more information on Real Estate IRA investing, or to open an account, call us today at 866-7500-IRA (472) or contact us on the Web at www.americanira.com.