Military Housing Investment Guide: Complete Strategy for BAH Properties

Military housing represents one of the most stable and profitable niches in real estate investing. With guaranteed government-backed income through Basic Allowance for Housing (BAH), predictable tenant cycles, and consistent demand near military installations, this specialized market offers unique advantages for informed investors.

This comprehensive guide reveals everything you need to know about investing in military housing, from understanding BAH rates to navigating PCS (Permanent Change of Station) cycles, leveraging VA loans, and building a portfolio that serves those who serve.

Table of Contents

1. Why Military Housing?
2. Understanding BAH (Basic Allowance for Housing)
3. Finding Military Housing Markets
4. Property Types & Strategies
5. Marketing to Military Tenants
6. Lease Terms & PCS Considerations
7. VA Loan Advantages
8. Legal & Regulatory Compliance
9. Military Tenant Screening
10. Property Management Considerations
11. Case Studies
12. Common Pitfalls to Avoid

Why Military Housing?

The Military Housing Opportunity

Market Size:

• 1.3 million active-duty service members
• 800,000+ military families live off-base
• $19.8 billion in BAH paid annually by DoD
• Average BAH: $1,500-$3,000 per month (varies by rank and location)

Key Advantages:

1. Guaranteed Income

• BAH paid directly by U.S. government
• Deposited on 1st and 15th of each month
• Rarely late or bounced payments
• Can be allotted directly to landlord

2. Stable Demand

• Military bases don't relocate
• Consistent troop presence
• New families arrive every PCS cycle
• Limited on-base housing = off-base demand

3. Responsible Tenants

• Military members risk career consequences for landlord disputes
• Higher accountability than average tenants
• Respect for property
• Chain of command recourse if issues arise

4. Predictable Turnover

• PCS cycles = 2-3 year leases typical
• You know move-out dates well in advance
• Easy to schedule renovations and re-leasing
• High re-rental demand

5. Financing Advantages

• VA loans with 0% down
• No PMI requirement
• Competitive interest rates
• House hack opportunities

The Numbers: Why It Works

Example: Fort Bragg (Fayetteville, NC)

Market Data:

• Active-duty population: 50,000+
• E-5 with dependents BAH: $1,485/month
• E-7 with dependents BAH: $1,737/month
• O-3 with dependents BAH: $1,908/month

Investment Property:

• Purchase price: $220,000 (3BR/2BA, 1,500 sq ft)
• Down payment: $44,000 (20%)
• Mortgage: $176,000 at 7.0% = $1,171/month
• Property taxes: $183/month
• Insurance: $125/month
• HOA: $50/month
• Total PITI + HOA: $1,529/month

Cash Flow Analysis:

• Rent (targeting E-6/E-7): $1,700/month
• Total expenses: $1,529/month
• Vacancy (4%): $68/month
• Maintenance (5%): $85/month
• CapEx (5%): $85/month
• Net cash flow: $-67/month

Wait, negative cash flow?

Not when you factor in:

• Principal paydown: $312/month (Year 1)
• Appreciation: $550/month (3% annual)
• Tax benefits: $150-200/month (depreciation, interest deduction)
• Total return: $945/month or 25.8% CoC return

Plus:

• Can use VA loan (0% down) to eliminate $44,000 down payment
• House hack (live in one unit, rent others)
• BRRRRefinance strategy after 2-3 years

Understanding BAH (Basic Allowance for Housing)

What is BAH?

Basic Allowance for Housing is a monthly, tax-free stipend paid to military members to offset the cost of housing when living off-base.

BAH is determined by:

1. Rank (Pay Grade) - Higher ranks get more
2. Dependency Status - With dependents = higher BAH
3. Geographic Location - Adjusted for local housing costs
4. Type - With or without dependents

2026 BAH Rates by Rank (Examples)

Sample Rates for Major Military Hubs:

| Rank | San Diego, CA | Fort Hood, TX | Norfolk, VA | Fort Bragg, NC | |------|---------------|---------------|-------------|----------------| | E-3 w/ deps | $2,955 | $1,512 | $1,857 | $1,353 | | E-5 w/ deps | $3,267 | $1,701 | $2,070 | $1,485 | | E-7 w/ deps | $3,708 | $1,950 | $2,379 | $1,737 | | O-3 w/ deps | $4,059 | $2,169 | $2,667 | $1,908 | | O-5 w/ deps | $4,680 | $2,556 | $3,096 | $2,235 |

Key Points:

• Rates updated annually (usually January 1)
• Cost-of-living adjustments can increase or decrease BAH
• Members with dependents receive higher BAH regardless of family size
• Single members (no dependents) receive lower BAH and often must live on-base

BAH Payment Schedule

Payment Dates:

• 1st of the month (mid-month pay)
• 15th of the month (end-month pay)
• Most landlords require rent by 1st, so service members must manage between pay periods

Payment Methods:

1. Direct to Landlord (Allotment) - Most reliable
   • Set up through myPay system
   • Automatically deposited to landlord
   • Continues even during deployment
2. Direct to Service Member - They pay you
   • More common
   • Requires trust and accountability

How to Look Up BAH Rates

Official BAH Calculator: https://www.defensetravel.dod.mil/site/bahCalc.cfm

You need:

• Military installation (base) zip code
• Pay grade (rank)
• Dependency status

Pro Tip: Target properties where rent = 80-95% of BAH

• Service members want to pocket the difference
• Under BAH = competitive advantage
• Over BAH = harder to rent

Finding Military Housing Markets

Top Military Housing Markets (2026)

Tier 1: Highest Demand & BAH

1. San Diego, CA

• Bases: Naval Base San Diego, MCRD, MCAS Miramar, Camp Pendleton
• Active-duty population: 100,000+
• Average BAH: $3,000-4,500
• Market: Competitive, high prices, strong cash flow for multi-family

2. Norfolk/Virginia Beach, VA

• Bases: Naval Station Norfolk, Oceana NAS, Little Creek
• Active-duty population: 90,000+
• Average BAH: $2,000-3,000
• Market: Strong fundamentals, affordable entry, coastal appreciation

3. Fort Liberty (Fayetteville, NC)

• Base: Fort Liberty (formerly Fort Bragg) - Largest Army base
• Active-duty population: 50,000+
• Average BAH: $1,400-2,200
• Market: Affordable, strong cash flow, consistent demand

Tier 2: Strong Markets with Growth

4. Colorado Springs, CO

• Bases: Fort Carson, Air Force Academy, Peterson SFB, Schriever SFB
• Active-duty population: 40,000+
• Average BAH: $1,800-2,700
• Market: Appreciating, quality of life appeal, growing tech sector

5. San Antonio, TX

• Bases: Fort Sam Houston, Lackland AFB, Randolph AFB
• Active-duty population: 80,000+
• Average BAH: $1,500-2,400
• Market: Affordable, no state income tax, strong economy

6. Jacksonville, NC

• Base: Camp Lejeune (Marine Corps)
• Active-duty population: 40,000+
• Average BAH: $1,300-1,900
• Market: Marine Corps focus, tight rental market, turnover

7. Killeen/Fort Hood, TX

• Base: Fort Hood (Fort Cavazos)
• Active-duty population: 50,000+
• Average BAH: $1,500-2,200
• Market: Affordable entry, consistent demand, Army-focused

Tier 3: Emerging & Specialty Markets

8. Charleston, SC

• Bases: Joint Base Charleston, Naval Weapons Station
• Active-duty population: 25,000+
• Average BAH: $1,700-2,500
• Market: Coastal appreciation, tourism economy, quality of life

9. Tacoma/Joint Base Lewis-McChord, WA

• Base: JBLM (Army & Air Force)
• Active-duty population: 40,000+
• Average BAH: $2,100-3,200
• Market: Expensive but strong BAH, Pacific Northwest appeal

10. Pensacola, FL

• Bases: NAS Pensacola, Corry Station, Whiting Field
• Active-duty population: 20,000+
• Average BAH: $1,500-2,200
• Market: Beach market, aviation training hub, snowbird rental potential

How to Evaluate a Military Market

Step 1: Base Permanence

• Is this a major installation unlikely to close?
• Has it survived BRAC (Base Realignment and Closure) rounds?
• Is it expanding or contracting?

Step 2: On-Base Housing Availability

• How many on-base units?
• What's the wait list?
• Quality of on-base housing?
• More off-base demand = better for investors

Step 3: Troop Demographics

• What branches? (Army, Navy, Marines, Air Force, Coast Guard)
• What ranks predominate?
• Family vs. single service members?
• Target: E-5 to O-3 with families

Step 4: Local Economy

• Does economy depend solely on base?
• Other employment opportunities?
• Economic resilience?
• Diversified economy = lower risk

Step 5: Real Estate Metrics

• Median home price
• Rent-to-price ratio
• Days on market
• Appreciation trends
• Target: Rent = 0.8-1.2% of purchase price

Step 6: Distance from Base

• Under 10 miles = premium demand
• 10-20 miles = good demand
• 20-30 miles = moderate demand
• Over 30 miles = commute too long
• Target: 5-15 miles from main gate

Property Types & Strategies

Strategy 1: Single-Family Homes (3-4 Bedrooms)

Target Tenant: E-5 to E-7 with families

Property Profile:

• 3-4 bedrooms, 2+ bathrooms
• 1,200-1,800 square feet
• Garage (military members accumulate gear)
• Yard for kids and pets
• Safe neighborhood with good schools

Price Range: $180,000-$350,000 (market dependent)

Financing:

• Conventional 20% down
• VA loan 0% down (house hack first year)
• FHA 3.5% down (house hack)

Pros:

• Easiest to finance
• Lowest maintenance
• Strongest appreciation
• Easy to sell

Cons:

• Single income stream
• Vacancy = 100% loss
• Lower cash flow per dollar invested

Best Markets:

• Fort Liberty (Fayetteville, NC)
• Fort Hood (Killeen, TX)
• Fort Campbell (Clarksville, TN)

Strategy 2: Duplex/Triplex/Fourplex

Target Tenant: E-4 to E-6 (mix of singles and families)

Property Profile:

• 2-4 units
• 2-3 bedrooms per unit
• Separate utilities (if possible)
• Private entrances
• Parking for each unit

Price Range: $250,000-$500,000

Financing:

• FHA 3.5% down (2-4 units, owner-occupied)
• VA loan 0% down (2-4 units, owner-occupied)
• Conventional 20-25% down

Pros:

• Multiple income streams
• House hack potential (live in one, rent others)
• Vacancy doesn't kill cash flow
• Better cash-on-cash returns
• Scales faster than SFH

Cons:

• More management intensive
• Tenant conflicts possible
• Harder to finance (if not owner-occupied)
• Appreciation may lag SFH

Best Markets:

• San Diego, CA
• Norfolk, VA
• Colorado Springs, CO

Example Deal (House Hack):

Triplex - Fort Liberty Area

• Purchase: $285,000
• VA loan: $0 down (owner-occupied)
• Mortgage: $1,895/month (at 7%)
• Property tax: $237/month
• Insurance: $180/month
• Total PITI: $2,312/month

Rental Income:

• Unit 1 (you live here): $0
• Unit 2: $1,250/month (E-5 BAH compliant)
• Unit 3: $1,250/month (E-5 BAH compliant)
• Total income: $2,500/month

Cash Flow:

• Income: $2,500
• PITI: $2,312
• Vacancy (4%): $100
• Maintenance (5%): $125
• CapEx (5%): $125
• Net: $-162/month

But you're living for free:

• Your housing cost: $0
• Market rent for equivalent apartment: $1,200-1,400
• Real savings: $1,038-1,238/month
• Effective cash flow: $876-1,076/month

After 1 year:

• Move out, rent your unit for $1,250
• Total rent: $3,750/month
• Net cash flow: $1,088/month
• CoC return: Infinite (no money down)

Strategy 3: Townhouses & Condos

Target Tenant: Junior officers (O-1 to O-3) and senior enlisted (E-7+)

Property Profile:

• 2-3 bedrooms
• Low-maintenance (HOA handles exterior)
• Amenities (pool, gym)
• Good school district
• Secure community

Price Range: $150,000-$300,000

Financing:

• Conventional 20% down
• VA loan 0% down
• FHA 3.5% down (owner-occupied)

Pros:

• Lower maintenance (HOA covers some)
• Affordable entry point
• Appeals to officers and dual-military couples
• Easier property management

Cons:

• HOA fees eat into cash flow
• HOA rental restrictions possible
• Less control over property
• Appreciation may lag SFH
• Special assessments possible

Best Markets:

• Naval Station Norfolk (officers)
• San Diego (dual-military couples)
• Air Force bases (officers and senior NCOs)

Strategy 4: Luxury Military Rentals

Target Tenant: Field-grade officers (O-4 to O-6)

Property Profile:

• 4+ bedrooms, 3+ bathrooms
• 2,500+ square feet
• Upscale finishes
• Great schools
• 10-20 minutes from base

Price Range: $400,000-$700,000

Financing:

• Conventional 20-25% down
• Higher credit requirements
• Larger reserves needed

Pros:

• Higher BAH = higher rent
• More stable tenants (senior officers)
• Longer duty stations (3-4 years)
• Better property care
• Strong appreciation

Cons:

• Higher capital requirements
• Smaller tenant pool
• More expensive maintenance
• Longer vacancy periods
• Higher expectations

Best Markets:

• Pentagon (Arlington, VA)
• San Diego (Admiral Row)
• Colorado Springs (Air Force Academy area)

Strategy 5: Room-by-Room Rentals

Target Tenant: Single junior enlisted (E-1 to E-4)

Property Profile:

• 4-6 bedrooms
• 2-3 bathrooms
• Shared common areas
• Individual leases
• Furnished or unfurnished

Price Range: $200,000-$400,000

Financing:

• Conventional or VA
• May need commercial loan if 5+ individual leases

Pros:

• Highest cash flow per property
• Multiple income streams
• Young service members need affordable housing
• Easy to fill vacancies

Cons:

• Highest management intensity
• Personality conflicts
• Higher turnover
• Local zoning may prohibit
• Wear and tear on property

Best Markets:

• Large training bases (Fort Jackson, Fort Leonard Wood)
• High BAH vs. cost cities (San Diego, Norfolk)

Example:

4BR/2BA Home - San Diego

• Purchase: $650,000
• Rent per room: $900-1,100/month
• Total potential: $3,600-4,400/month
• E-3 without dependents BAH: $2,304
• E-4 without dependents BAH: $2,580

Room rent ($1,000) = 38-43% of BAH = Very affordable

Marketing to Military Tenants

Where Military Members Look for Housing

1. Military-Specific Sites

MilitaryByOwner.com

• Most popular military housing site
• Free listings for landlords
• Service members actively search here
• Post detailed listings with BAH info

MilitaryHousing.com

• DoD-endorsed housing resource
• Search by base and BAH
• Free listings

AHRN.com (Automated Housing Referral Network)

• Official military housing site
• Must register as landlord
• Free service
• Direct connection to military families

2. Base Housing Offices

Contact the Housing Referral Office:

• Every base has one
• They maintain off-base rental lists
• Free to list your property
• They'll refer you to incoming families

Process:

• Call or visit housing office
• Complete landlord registration
• Provide property details
• Update availability regularly

3. Traditional Sites

Zillow, Apartments.com, Realtor.com

• Military members use these too
• Include "Military Friendly" in title
• Mention BAH in description
• Tag "Near [Base Name]"

Facebook Marketplace

• Very popular with military families
• Free listings
• Join base-specific groups
• Post in PCS groups

4. Base Facebook Groups

Search for:

• "[Base Name] Yard Sale"
• "[Base Name] Spouses Group"
• "[Base Name] Housing"
• "[Base Name] PCS" (Permanent Change of Station)

Posting Tips:

• Get admin approval first
• Post during PCS seasons
• Include photos and BAH info
• Respond quickly

Marketing Message That Works

Headline Formula: "[Bedrooms]BR [Distance]mi from [Base] - $[Rent] ([Rank] BAH Friendly)"

Examples:

• "3BR 8mi from Fort Liberty - $1,450 (E-6 BAH Friendly)"
• "4BR Near Camp Pendleton - $2,950 (O-3 BAH Compliant)"
• "2BR Duplex 5mi JBLM - $1,850 (E-5 BAH Perfect Fit)"

The Perfect Military Listing

Template:

🇺🇸 MILITARY-FRIENDLY RENTAL 🇺🇸
[X]BR/[X]BA Home - [X] Miles from [Base Name]

💰 RENT: $[Amount]/month
📍 LOCATION: [Neighborhood], [City]
📏 SIZE: [Sq Ft] | Lot: [Lot Size]
🗓️ AVAILABLE: [Date]

✅ BAH COMPLIANT:
• E-5 with dependents: $[BAH Amount] ✓
• E-6 with dependents: $[BAH Amount] ✓
• E-7 with dependents: $[BAH Amount] ✓

🏠 PROPERTY FEATURES:
• [X] Bedrooms / [X] Full Baths
• Open floor plan
• [Flooring type] throughout
• [Kitchen features]
• [Garage/Parking]
• [Yard/Outdoor space]
• [Any recent updates]

📚 EXCELLENT SCHOOLS:
• [Elementary School] - [Rating]
• [Middle School] - [Rating]
• [High School] - [Rating]

🎯 LOCATION HIGHLIGHTS:
• [X] minutes to [Base] main gate
• Close to [shopping area]
• Near [amenities]
• [Highway] access
• Safe, family-friendly neighborhood

💼 LEASE TERMS:
• 12-month lease preferred (flexible for PCS)
• Military clause included
• Pets considered (case-by-case)
• Deposit: $[Amount]
• Application fee: $[Amount]

🎖️ MILITARY-FRIENDLY LANDLORD:
• Understand PCS and deployment schedules
• Fast approval process
• BAH allotment accepted
• Military references preferred
• [Years] experience with military tenants

📞 CONTACT:
[Name]
[Phone]
[Email]

🔗 VIRTUAL TOUR: [Link if available]
📸 MORE PHOTOS: [Link]

Thank you for your service! 🇺🇸

Photos That Attract Military Tenants

Must-Have Photos (15-25 total):

1. Exterior:

   • Front of house (curb appeal)
   • Backyard (if fenced - mention pet-friendly)
   • Driveway/garage (military members have vehicles)
   • Street view (show neighborhood)

2. Interior:

   • Living room (main gathering space)
   • Kitchen (highlight appliances, counter space)
   • Each bedroom (families need to visualize)
   • Each bathroom (cleanliness critical)
   • Storage areas (military members have gear)

3. Special Features:

   • Garage/workshop (gear storage)
   • Laundry area (washer/dryer included?)
   • Closets (uniform storage)
   • Any study/office (for online military education)

Photo Tips:

• Bright, natural lighting
• Declutter and stage
• Show square footage
• Highlight storage
• Clean, clean, clean

Video Tours for Military Families

Why Video?

• Military families often PCS from overseas or across country
• Can't always visit in person
• Video builds trust
• Speeds decision-making

What to Include (5-10 minute tour):

1. Neighborhood drive-up
2. Exterior walkthrough
3. Interior room-by-room
4. Storage areas
5. Commute time mention
6. School proximity
7. Local amenities

Where to Post:

• YouTube (embed in listing)
• Facebook (listing posts)
• Email to interested parties
• MilitaryByOwner (video link)

Lease Terms & PCS Considerations

The Military Clause

What is it? A lease addendum that allows service members to break the lease without penalty under specific circumstances.

Required by Federal Law (SCRA - Servicemembers Civil Relief Act):

Service members can terminate the lease if:

1. PCS orders received for 35+ days
2. Deployed for 90+ days
3. Separated from military (honorable discharge, medical)

Notice Required:

• Written notice + copy of orders
• 30 days from next rent due date
• Landlord cannot charge early termination fees

Your Protection:

• Typically have 30-60 days to find new tenant
• Keep security deposit for valid damages
• Can charge rent through the notice period

Sample Military Clause:

MILITARY CLAUSE ADDENDUM

In accordance with the Servicemembers Civil Relief Act (SCRA), Tenant may terminate 
this lease without penalty upon 30 days written notice if:

1. Tenant receives PCS (Permanent Change of Station) orders requiring relocation 
   more than 35 miles from the property, or

2. Tenant receives deployment orders for 90 days or more, or

3. Tenant is involuntarily discharged or released from active duty.

Tenant must provide:
• Written notice of intent to terminate
• Copy of official orders
• 30 days notice from date of written notification

Landlord agrees to:
• Accept lease termination per SCRA requirements
• Waive any early termination fees
• Return security deposit per state law (less valid deductions for damages)

Tenant remains responsible for:
• Rent through notice period
• Any damages beyond normal wear and tear
• Property condition per lease agreement
• All utilities through final date of occupancy

Structuring Military-Friendly Leases

Lease Length Options:

Option 1: Standard 12-Month Lease

• Most common
• Renewable annually
• Include military clause

Option 2: Month-to-Month After Initial Term

• 12-month initial term
• Converts to month-to-month after year 1
• Gives flexibility for PCS timing
• Charge $50-100/month premium for MTM

Option 3: 18-24 Month Lease

• For stable duty stations
• Offer discount ($25-50/month off)
• Still include military clause
• Good for senior personnel

Option 4: Flexible Term

• "12 months or until PCS, whichever comes first"
• Match to expected tour length
• Include date when orders expected
• Build in flexibility

PCS Timing Considerations

Peak PCS Seasons:

Summer (May-August):

• 60% of PCS moves occur in summer
• School year consideration
• Highest demand period
• Can charge premium rent

Winter (November-February):

• Lowest PCS volume
• Slower rental market
• May need rent concessions
• Longer vacancy possible

Spring/Fall:

• Moderate PCS activity
• Normal rental market
• Standard pricing

Your Strategy:

List in Spring for Summer Move-Ins:

• Start marketing in March-April
• Target families PCSing in June-August
• Lock in highest rent
• Pre-lease 60-90 days out

Winter Vacancy? Consider:

• 6-month lease to hit summer renewal
• Rent discount to fill quickly
• Short-term rental (if allowed)
• Military TDY (Temporary Duty) tenants

Deployment Clauses

Should you include one?

Deployment is already covered by SCRA for lease termination (90+ days), but you can be more accommodating:

Option A: Deployment Rent Reduction

If Tenant is deployed for 90+ days, rent will be reduced by [X]% during deployment 
period, upon providing copy of deployment orders.

Why offer this?

• Keeps good tenant
• Spouse remains in home
• Maintains occupancy
• Builds goodwill
• Avoids turnover

Option B: Deployment Hold

If Tenant is deployed alone (without family), family members may remain in property 
at full rent. If entire family relocates during deployment, Tenant may hold property 
with [50]% rent payment for up to [6] months.

Option C: Standard SCRA Only

• Deployment = can break lease per SCRA
• No special accommodation
• Higher turnover risk

Recommendation: Offer Option A (10-25% reduction) for deployments where family stays. This keeps occupancy and avoids turnover costs.

VA Loan Advantages

What is a VA Loan?

A VA loan is a mortgage guaranteed by the Department of Veterans Affairs, available to:

• Active-duty service members
• Veterans
• Reservists and National Guard (after 6 years service)
• Surviving spouses of service members

Key Benefits:

1. Zero Down Payment

• 100% financing (no down payment required)
• Borrow full purchase price
• Conserve capital for other investments

2. No Private Mortgage Insurance (PMI)

• Conventional loans require PMI if less than 20% down
• PMI costs 0.5-1% of loan annually
• $250,000 loan = $1,250-2,500/year saved

3. Competitive Interest Rates

• Typically 0.25-0.5% lower than conventional
• Government guarantee reduces lender risk
• Significant savings over loan life

4. Flexible Credit Requirements

• Can qualify with 620 credit score (some lenders go lower)
• More forgiving of past financial issues
• Easier approval than conventional

5. No Prepayment Penalty

• Pay off early without fees
• Refinance anytime
• Accelerate payoff

6. Limited Closing Costs

• VA limits what sellers/lenders can charge
• Seller can pay all closing costs
• Funding fee can be rolled into loan

Using VA Loans as an Investor

The House Hack Strategy:

Step 1: Buy with VA Loan (0% down)

• Purchase 2-4 unit property
• Must occupy one unit as primary residence
• Live there for 1 year minimum

Step 2: Rent Other Units

• Collect rent from other units
• Cover mortgage with rental income
• Live for free (or even cash flow)

Step 3: Move and Repeat

• After 1 year, can move to another property
• Keep first property as rental
• Use VA loan again (entitlement restored or additional entitlement)
• Build portfolio with no money down

Example: VA House Hack

Fourplex - Norfolk, VA

• Purchase price: $400,000
• VA loan: $400,000 (0% down)
• Funding fee (2.3%): $9,200 (rolled into loan)
• Total loan: $409,200
• Monthly P&I: $2,721 (at 7%)
• Taxes: $333/month
• Insurance: $200/month
• Total PITI: $3,254/month

Rental Income:

• Unit 1 (you live here): $0
• Unit 2: $1,400/month
• Unit 3: $1,400/month
• Unit 4: $1,400/month
• Total: $4,200/month

Cash Flow:

• Income: $4,200
• PITI: $3,254
• Vacancy (4%): $168
• Maintenance (5%): $210
• CapEx (5%): $210
• Property management (8%): $336 (after you move)
• Net: $22/month

But you're living for free!

• Market rent for your unit: $1,400
• Your cost: $0
• Real savings: $1,400/month
• Effective return: $1,422/month on $0 invested = Infinite

After Year 1:

• Move to new property
• Rent your unit: $1,400/month
• Total income: $5,600/month
• Net cash flow: $1,186/month
• CoC return: Infinite (no money down)

After 5 Years:

• Property value: $485,000 (4% annual appreciation)
• Loan balance: $384,000
• Equity: $101,000
• Principal paydown: $25,200
• Total wealth created: $101,000 from $0 invested

VA Loan Limits & Entitlement

2026 VA Loan Limits:

No Loan Limit (as of 2020) if you have full entitlement

Entitlement Amounts:

• Basic entitlement: $36,000
• Bonus entitlement: Up to $144,000 (varies by county)
• Total possible: $548,250+ in most markets

High-Cost Area Limits:

• San Diego, CA: $726,200
• San Francisco, CA: $806,500
• Los Angeles, CA: $726,200
• New York, NY: $726,200
• Washington, DC: $726,200

Can you use VA loans multiple times?

Yes! Three ways:

1. Restore Your Entitlement

• Sell property and pay off VA loan
• Entitlement restored for next purchase
• Can use again immediately

2. Have Remaining Entitlement

• If first loan was under full entitlement
• Can use remaining for second property
• Example: First loan $250,000, can use another $300,000+

3. One-Time Restoration

• Can restore entitlement once while still owning property
• Allows second VA loan while keeping first rental
• Must have enough remaining entitlement

Building a VA Loan Portfolio:

Year 1:

• Buy fourplex with VA loan ($400,000)
• Live in one unit, rent three
• Total invested: $0

Year 2:

• Move to duplex with VA loan ($250,000)
• Rent your unit in fourplex
• Keep fourplex as rental
• Total invested: $0
• Portfolio: 6 units

Year 3:

• Move to SFH with VA loan ($300,000)
• Keep duplex as rental
• Total invested: $0
• Portfolio: 7 units

Year 4:

• Refinance fourplex (conventional, cash-out)
• Pull out $50,000 equity
• Buy another property with conventional loan (20% down = $250,000 purchase)
• Portfolio: 11 units

Total invested after 4 years: $0 Portfolio value: ~$1.2 million Equity: $200,000+ Cash flow: $3,000-5,000/month

VA Loan vs. Conventional for Investors

Comparison: $300,000 Property

| Factor | VA Loan | Conventional (20% down) | |--------|---------|-------------------------| | Down Payment | $0 | $60,000 | | Loan Amount | $300,000 | $240,000 | | Interest Rate | 6.75% | 7.00% | | PMI | $0 | $0 (20% down) | | Funding Fee | $6,900 (2.3%) | $0 | | Monthly P&I | $1,946 | $1,597 | | Cash Needed | ~$6,000 (closing) | ~$66,000 | | CoC Return | Infinite | 15-25% |

When to Use VA Loan:

• First 3-4 investment properties
• Want to scale fast with no money down
• House hacking strategy
• Conserving capital for more deals
• Building portfolio quickly

When to Use Conventional:

• Out of VA entitlement
• Non-owner occupied from start
• Want lower monthly payment
• 5+ unit property (VA doesn't allow)
• Investment property in different state

Legal & Regulatory Compliance

Servicemembers Civil Relief Act (SCRA)

What is SCRA? Federal law that provides legal and financial protections to active-duty military members.

Key Protections That Affect Landlords:

1. Lease Termination Rights

• Can break lease for PCS (35+ days away)
• Can break lease for deployment (90+ days)
• 30 days notice required
• No penalties allowed

2. Interest Rate Caps

• 6% maximum on debts incurred before active duty
• Applies to mortgages, credit cards, etc.
• Must provide copy of orders
• Does NOT apply to rental payments to tenants

3. Eviction Protection

• Court approval required to evict (if rent under ~$4,000/month)
• Judge can stay eviction for 90 days
• Only applies during active duty

4. Civil Court Protections

• Can request 90-day stay in civil proceedings
• Allows time to secure legal representation
• Applies to evictions and lawsuits

How to Comply:

Include SCRA notice in lease:

SERVICEMEMBERS CIVIL RELIEF ACT (SCRA) NOTICE

Tenant acknowledges receiving information about rights under the Servicemembers 
Civil Relief Act. If Tenant is called to active military duty or receives PCS orders, 
certain provisions of this lease may be affected under federal law.

For more information: https://www.dmdc.osd.mil/scra
Military Legal Assistance: Contact your base JAG office

When tenant provides orders:

• Review orders carefully
• Confirm they meet SCRA requirements
• Calculate final date of tenancy
• Conduct move-out inspection
• Return security deposit per state law

Don't:

• Charge early termination fees (SCRA violation)
• Refuse to accept termination
• Delay security deposit return
• Report to credit bureaus as broken lease
• Intimidate or threaten

Military Lending Act (MLA)

Does NOT typically apply to landlords, but know about it:

What it covers:

• Consumer credit extended to active-duty military and dependents
• 36% maximum APR (all-in)
• Applies to payday loans, auto title loans, certain credit cards

Does NOT apply to:

• Residential mortgages
• Rental agreements
• Security deposits

Fair Housing Act - Military Status

Is military status a protected class?

Federal law: NO

• Fair Housing Act doesn't include military status
• CAN legally discriminate based on military status (though inadvisable)

State/Local laws: VARIES

• Some states prohibit discrimination against military members
• Some cities have military protections
• Check your local law

Best Practice:

• DON'T discriminate against military members
• Military tenants are typically excellent
• Discriminating is bad business
• Could violate state/local law

State-Specific Military Protections

Some states offer additional protections:

California:

• Military status is a protected class
• Cannot discriminate in housing
• Enhanced SCRA protections

Virginia:

• Strong military protections (large military population)
• 30-day notice for lease termination (vs. SCRA requirement)
• Landlord-tenant act recognizes military needs

Texas:

• Military members can terminate lease for PCS
• Protections for deployed members
• Family can remain during deployment

North Carolina:

• Military-friendly landlord-tenant laws
• PCS lease termination
• Deployment considerations

Check your state: [State] landlord-tenant law + military protections

Security Deposits & Military Tenants

Federal Law (SCRA):

• Doesn't change security deposit laws
• Follow state law for returns
• Can deduct for damages (not normal wear)

Best Practices:

1. Detailed Move-In Inspection

• Document everything with photos/video
• Have tenant sign inspection report
• Note even minor issues
• Email copy to tenant

2. Regular Inspections

• Inspect every 6 months
• Document condition
• Address issues early
• Prevents disputes at move-out

3. Move-Out Inspection

• Schedule with tenant present
• Use move-in report for comparison
• Take extensive photos/video
• Provide preliminary estimate

4. Timely Return

• Follow state law (usually 21-30 days)
• Provide detailed accounting
• Include receipts for repairs
• Return balance promptly

5. Dispute Resolution

• Communicate professionally
• Provide documentation
• Offer to discuss
• Know you can contact chain of command (last resort)

Chain of Command - When to Involve

Last Resort Only: Involving a service member's chain of command should be the absolute last option.

When to consider:

• Lease violations continue after written warnings
• Property damage and tenant refuses to remedy
• Unpaid rent despite multiple notices
• Tenant abandons property without notice
• Illegal activity on property

Process:

Step 1: Document Everything

• All lease violations
• All communications
• All notices given
• Photos of damage
• Financial impact

Step 2: Written Notice to Tenant

"If this matter is not resolved by [date], I will have no choice but to 
contact your chain of command per the lease agreement."

Step 3: Contact Base Housing Office

• They can often mediate
• Avoid going directly to command
• Housing office has experience with this

Step 4: Contact First Sergeant or Commander (if necessary)

• Provide written summary
• Include all documentation
• Remain professional
• Request meeting

What NOT to do:

• Don't threaten the chain of command lightly
• Don't contact for minor issues
• Don't use it as intimidation
• Don't bypass proper notice procedures

Remember: Most military members are excellent tenants. If you need to contact the chain of command, something has gone very wrong.

Military Tenant Screening

What Makes Military Tenants Different

Advantages:

• Stable, government-backed income
• Career consequences for bad behavior
• Used to maintaining property (barracks inspections)
• Frequent moves = understand landlord perspective
• Command oversight = additional accountability

Considerations:

• Frequent relocations = turnover
• Deployments affect household
• Young age = less rental history
• Military lifestyle can be stressful

Military-Specific Screening Criteria

Standard Screening Applies:

• Credit check
• Background check
• Income verification
• Rental history
• Employment verification

Military Modifications:

1. Income Verification

Accept:

• LES (Leave and Earnings Statement)
• BAH documentation
• Military pay charts (verify rank)
• Direct deposit to landlord setup

Calculate:

• Base pay + BAH + allowances
• Rent should be ≤ 30-35% of gross income
• Or rent ≤ BAH amount

Example:

• E-5 with dependents
• Base pay: $3,200/month
• BAH: $1,700/month
• BAS (food): $460/month
• Total: $5,360/month
• Rent limit: $1,608 (30%) OR $1,700 (BAH limit)

2. Credit Score Adjustments

Military Credit Challenges:

• Frequent moves affect credit
• Young service members building credit
• SCRA can show on credit (not negative)
• Deployment can complicate payments

Adjusted Standards:

• 600+ credit score (vs. 650+ civilian)
• Verify reason for low score
• Recent credit issues = bigger concern than old
• Look at payment trends

Red Flags:

• Collections from previous landlords
• Unpaid utilities
• Recent evictions
• Debt-to-income over 50%

Green Lights:

• Steady payment history on current accounts
• No recent missed payments
• Low debt-to-income
• Positive rental references

3. Rental History

Military Challenges:

• Short rental history (recent active duty)
• Lived on-base previously
• Barracks housing = no landlord reference
• Overseas assignments = foreign landlords

Alternative References:

• First Sergeant or Commander
• Previous military roommate's landlord
• On-base housing office
• Family references (character)

Questions for References:

• Did tenant pay rent on time?
• How did they maintain the property?
• Any lease violations?
• Any damage beyond normal wear?
• Would you rent to them again?

4. Employment Verification

For Military Tenants:

• Active-duty status verification
• Rank verification
• Duty station verification
• Expected tour length

How to Verify:

Option 1: Contact Command

• Call unit duty desk (non-emergency number)
• Verify active-duty status
• Confirm rank and duty station
• Ask about expected tour length

Option 2: Review LES (Leave and Earnings Statement)

• Shows active-duty status
• Shows rank and pay
• Shows duty location
• Updated monthly

Option 3: Military ID Card

• Review military ID (with permission)
• Verify expiration date (active status)
• Confirm rank
• Note branch of service

Military-Specific Application Questions

Add to your standard application:

Military Information:

• Branch of service: _______________
• Rank/Pay grade: _______________
• Active duty / Reserve / Guard / Veteran
• Current duty station: _______________
• Unit/Command: _______________
• Expected length of tour: _______________
• Previous duty stations (last 3): _______________
• Expected PCS date (if known): _______________

Deployment History:

• Have you deployed in the last 2 years? Y/N
• Expected deployment in next 2 years? Y/N
• If deployed, will family remain in property? Y/N

Emergency Contact:

• Non-military emergency contact (not spouse): _______________
• Command emergency contact: _______________
• First Sergeant/Commander name: _______________
• Unit phone number: _______________

Military References:

• Previous landlord (if applicable): _______________
• Command reference: _______________
• Peer reference (military or civilian): _______________

Red Flags Specific to Military Tenants

PROCEED WITH CAUTION:

1. Pattern of Short Rentals

• Multiple 3-6 month leases
• Doesn't match PCS cycle
• May indicate evictions or lease breaks

2. Disputes with Previous Landlords

• Collections from landlords
• Negative landlord references
• Damage claims or lawsuits

3. Financial Problems

• Low credit despite steady income
• Multiple collections
• Recent bankruptcy
• Debts from previous duty stations

4. Disciplinary Issues

• Lower rank than years of service suggest (may have been demoted)
• Vague about command contact
• Refuses to provide unit information
• Criminal background issues

5. Evasive or Unresponsive

• Won't provide LES or pay information
• Won't provide command contact
• Slow to respond to communications
• Inconsistent information

AUTOMATIC DISQUALIFICATION:

• Dishonorable discharge (if separated)
• Recent eviction
• Currently under investigation (ask directly)
• False information on application
• Sex offender registry
• Felony conviction (case-by-case basis)

The Perfect Military Tenant Profile

Green Lights:

Financial:

• Credit score 650+
• Debt-to-income under 40%
• Rent ≤ BAH amount
• Stable payment history
• No collections from landlords

Military Career:

• E-4 or above (or O-1+)
• At least 2 years in service
• Stable career progression
• Good standing with command
• Expected 2-3 year tour

Rental History:

• Positive previous landlord references
• 12+ months in previous rental
• Left properties in good condition
• No lease violations
• No evictions or disputes

Personal:

• Responsive and professional
• Understands lease terms
• Asks good questions
• Complete application
• Provides all requested documents

Family:

• Married with stable family
• Appropriate size for property
• Kids enrolled in local schools
• Plans to stay for full tour

Tenant Screening Checklist

Before Showing Property:

• [ ] Pre-screen over phone
• [ ] Verify active-duty status
• [ ] Confirm rank and BAH amount
• [ ] Confirm move-in timeline (PCS date)
• [ ] Confirm household size and pets

Application Review:

• [ ] Complete application received
• [ ] Application fee paid
• [ ] All questions answered
• [ ] Supporting documents provided
• [ ] LES (Leave and Earnings Statement) reviewed
• [ ] Military ID reviewed (or copy provided)

Screening Process:

• [ ] Credit report pulled (score: ___)
• [ ] Background check completed
• [ ] Sex offender registry checked
• [ ] Income verified (rent-to-income: ___%)
• [ ] BAH amount confirmed
• [ ] Command contacted (active duty verified)
• [ ] Previous landlord reference (1): ___
• [ ] Previous landlord reference (2): ___
• [ ] Command reference contacted
• [ ] Personal reference contacted

Decision:

• [ ] Approve
• [ ] Approve with conditions: _______________
• [ ] Deny - Reason: _______________
• [ ] Adverse action notice sent (if denied)

Property Management Considerations

Should You Self-Manage or Hire?

Self-Manage If:

• You own 1-3 properties
• You live near the base (within 30 minutes)
• You have time for tenant calls and maintenance
• You understand military culture and SCRA
• You want maximum cash flow

Hire Property Manager If:

• You own 4+ properties
• You live far from properties
• You have full-time job
• You don't want tenant headaches
• You're unfamiliar with military regulations

Finding a Military-Savvy Property Manager

Look for:

• Experience with military tenants (ask percentage of portfolio)
• Located near military base
• Understands BAH and SCRA
• Contacts with housing offices
• Military-specific marketing
• Quick lease-up track record

Questions to Ask:

1. What percentage of your properties are rented to military?

   • Want: 50%+ military tenants

2. What's your average days-to-lease near [Base]?

   • Want: Under 15 days during PCS season

3. How do you handle PCS lease breaks?

   • Want: Streamlined process, quick re-lease

4. Do you work with base housing offices?

   • Want: Yes, registered with housing referral

5. What's your policy on deployments?

   • Want: Flexible, understanding approach

6. How do you handle maintenance during deployment?

   • Want: Direct contact with family, quick response

7. What are your fees?

   • Typical: 8-10% monthly + 1 month leasing fee

8. References from military property owners?

   • Want: At least 3 current clients

Property Management Fee Structure

Standard Fees:

• Monthly management: 8-10% of rent
• Leasing fee: 50-100% of one month's rent
• Lease renewal fee: $0-$250
• Maintenance markup: 0-10%
• Inspection fee: $0-$100
• Eviction coordination: $200-$500

Military-Specific Considerations:

Higher Turnover = Higher Leasing Fees

• Military tenants PCS every 2-3 years
• More frequent leasing fees than civilian tenants
• Negotiate lower leasing fees (50% vs. 100%)

Example:

• Property rents for $1,500/month
• 10% management fee = $150/month
• Leasing fee: 100% = $1,500 every 2.5 years = $600/year
• Total annual fees: $1,800 + $600 = $2,400 (13.3% effective rate)

Negotiate:

• 8% monthly + 50% leasing fee = $1,440 + $300 = $1,740/year (9.7%)
• 10% monthly + flat $500 leasing = $1,800 + $200 = $2,000/year (11.1%)

DIY Property Management for Military Rentals

Systems You Need:

1. Rent Collection

• Set up BAH allotment (direct deposit from DFAS)
• Rent due on 1st, late after 5th
• $50 late fee after 5 days
• Accept online payments (Cozy, Avail, Zelle)

2. Maintenance System

• 24/7 emergency line (or service)
• Online maintenance request portal
• Approved vendor list with military discounts
• Response times: Emergency 2 hours, Urgent 24 hours, Routine 48 hours

3. Inspection Schedule

• Move-in inspection (detailed photos)
• 6-month inspection (during lease)
• Move-out inspection (with tenant present)
• Pre-PCS inspection (60 days before move)

4. Communication Protocol

• Primary contact: Tenant (service member)
• Secondary contact: Spouse (if deployed)
• Emergency command contact (last resort)
• Response time: 4 business hours

5. Marketing System

• List 60-90 days before PCS season
• Multiple platforms (MilitaryByOwner, AHRN, Zillow)
• Virtual tours for remote PCS
• Housing office registration

Managing Deployed Tenant Properties

Before Deployment:

1. Pre-Deployment Meeting

• Review lease terms
• Update emergency contacts
• Discuss expectations
• Get contact info for deployed member
• Discuss lawn/exterior maintenance plan

2. Inspection & Documentation

• Complete inspection before deployment
• Document property condition
• Address any needed repairs
• Create departure checklist

3. Payment Setup

• Verify BAH allotment continues
• Confirm direct deposit to landlord
• Backup payment plan (spouse, bank draft)
• Deployment may INCREASE BAH (family separation allowance)

During Deployment:

1. Communication

• Primary contact: Spouse/family remaining
• Secondary: Deployed service member (email)
• Emergency only: Command (Rear Detachment)

2. Maintenance

• Respond quickly (family under stress)
• Offer to coordinate (if spouse is inexperienced)
• Be flexible with access timing
• Don't take advantage

3. Rent Collection

• Usually automatic (allotment)
• If issue arises, contact spouse first
• Give extra grace period (don't charge late fees immediately)
• Remember: service member can't fix from deployment

After Deployment:

1. Welcome Home

• Allow reintegration time
• Schedule property inspection 30 days after return
• Address any issues discovered during deployment

2. Lease Renewal Discussion

• Service member may PCS soon after deployment
• Discuss plans
• Offer flexibility

Handling PCS Move-Outs

90 Days Before PCS:

• Tenant receives orders
• You receive SCRA notice
• Begin marketing property

60 Days Before:

• Conduct pre-move inspection
• Identify needed repairs
• Get quotes for turnover
• List property actively

30 Days Before:

• Final showing coordination
• Accept applications
• Pre-lease to new tenant (if possible)
• Coordinate move-out/move-in dates

Move-Out Day:

• Inspection with outgoing tenant
• Photo/video documentation
• Return keys and remotes
• Discuss security deposit timeline

Within 21-30 Days:

• Complete turnover work
• Send security deposit accounting
• Process deposit return
• Welcome new tenant

Best Practices:

1. Overlap When Possible

• 7-10 day overlap = time for turnover
• Charge prorated rent
• Reduces vacancy

2. Pre-Lease Aggressively

• Don't wait for move-out
• Show occupied property (with permission)
• Virtual tours for remote PCS families
• Lease signed 30-60 days early

3. Coordinate with Outgoing Tenant

• Flexible showing times
• Offer incentive to keep clean
• Communicate new tenant timeline
• Make process easy

Case Studies

Case Study 1: VA House Hack to Portfolio

Investor: Sarah, Active-Duty Air Force Officer

Starting Point:

• O-2 (First Lieutenant)
• Stationed at Peterson SFB, Colorado Springs
• BAH: $2,100/month
• Goal: Build investment portfolio while serving

Year 1: First VA House Hack

Property: Duplex, Colorado Springs

• Purchase price: $350,000
• VA loan: $350,000 (0% down)
• Funding fee: $6,125 (waived for disabled vets, but she paid it)
• Monthly P&I: $2,330
• Taxes: $290/month
• Insurance: $150/month
• Total PITI: $2,770/month

Income:

• Unit A (Sarah lives here): $0
• Unit B: $1,600/month
• Sarah's out-of-pocket: $1,170/month
• Sarah's BAH: $2,100/month
• Net profit: $930/month (living for free + $930)

Year 2: PCS to Travis AFB, California

Property 2: Fourplex, Vacaville, CA (near Travis)

• Purchase price: $520,000
• VA loan: $520,000 (second VA loan, she had remaining entitlement)
• Monthly PITI: $4,100
• Lives in one unit, rents three at $1,600 each = $4,800/month
• Net after expenses: Break-even (but living free)
• BAH at Travis: $3,000/month = $3,000/month profit

Meanwhile:

• Colorado duplex rents both units
• Total rent: $3,200/month
• PITI: $2,770
• Property management (10%): $320
• Maintenance/vacancy/CapEx (15%): $480
• Net cash flow: $-370/month (negative, but...)
• Principal paydown: $450/month
• Appreciation: $875/month (3% annually)
• Total wealth creation: $955/month

Year 3: Refinance and Expand

Colorado Duplex:

• Original loan: $350,000
• Current value: $385,000 (10% appreciation)
• Equity: $35,000 + $10,000 principal = $45,000
• Refinance: Cash-out refi at 75% LTV
• New loan: $288,750
• Cash out: $38,750 (minus closing costs = $35,000)

Use Cash-Out for Down Payment:

• Buy SFH in Colorado Springs
• Purchase: $290,000
• Down payment (20%): $58,000 (her $35,000 + $23,000 saved from positive cash flow)
• Conventional loan: $232,000
• Rent: $2,400/month
• PITI + expenses: $2,100/month
• Cash flow: $300/month

Year 4: Separate from Military, Keep Portfolio

Portfolio Summary:

• Colorado duplex (rentals): $385,000 value, $284,000 loan, cash flow $-370/mo
• California fourplex (rental after PCS): $550,000 value, $508,000 loan, cash flow $800/mo
• Colorado SFH (rental): $310,000 value, $228,000 loan, cash flow $300/mo

Total:

• Portfolio value: $1,245,000
• Total loans: $1,020,000
• Equity: $225,000
• Cash flow: $730/month ($8,760/year)
• Total wealth from principal + appreciation: $4,500/month

Starting Capital: $6,125 (one funding fee) 5-Year Return: $225,000 equity + $8,760 annual passive income ROI: 3,673% over 5 years

Case Study 2: Military Landlord Full-Time

Investor: Marcus, Army Veteran (retired E-7)

Background:

• Retired after 22 years
• Disability rating: 40%
• Retirement pay: $2,800/month
• VA disability: $750/month
• Total: $3,550/month
• Location: Fayetteville, NC (Fort Liberty)

Goal: Replace active-duty income with rental portfolio

Year 1-3: Building the Portfolio (while active duty)

Property 1: SFH near Fort Liberty

• Purchase: $185,000 (while stationed there)
• VA loan, 0% down
• Rent: $1,500/month
• Cash flow: $250/month

Property 2: Duplex near Fort Liberty

• Purchase: $210,000 (year 2)
• VA loan, 0% down
• Rent: $2,700/month (both units)
• Cash flow: $500/month

Property 3: Triplex (after retirement, conventional)

• Purchase: $280,000
• Down payment: $56,000 (20%, from savings + VA disability back-pay)
• Rent: $3,600/month
• Cash flow: $700/month

Year 4-5: Scaling Up

Used BRRRR Strategy:

Property 4: Fixer SFH

• Purchase: $110,000 (distressed)
• Rehab: $35,000
• Total: $145,000
• ARV: $190,000
• Refinance at 75% LTV: $142,500
• Cash out: $142,500 - $110,000 original loan = $32,500
• Cash invested left in deal: $12,500 ($145k - $132.5k)
• Rent: $1,550/month
• Cash flow: $350/month

Property 5: Another BRRRR

• Repeated process
• Left in deal: $15,000
• Cash flow: $400/month

Year 6: Self-Managing Full-Time

Portfolio:

• 5 properties
• 10 units total
• Total gross rent: $12,000/month
• Total expenses (PITI, management, capex, etc.): $8,500/month
• Net cash flow: $3,500/month

Combined Income:

• Retirement: $2,800/month
• VA disability: $750/month (tax-free)
• Rental income: $3,500/month
• Total: $7,050/month ($84,600/year)

Time Investment:

• 20-25 hours/week managing properties
• Lives near all properties
• Does some maintenance himself
• Equivalent to part-time job, making $84k/year

Portfolio Value:

• Total property value: $1,150,000
• Total loans: $780,000
• Equity: $370,000
• Net worth grew from $0 to $370k in 6 years

Case Study 3: Long-Distance Military Investing

Investor: Jessica, Navy (stationed overseas)

Background:

• Active-duty O-3
• Stationed in Japan (shore duty)
• Wants to invest near large Navy bases for future PCS
• Plans to retire near Norfolk, VA area

Challenge:

• Can't visit properties in person
• Needs remote management
• Building portfolio for retirement (10 years away)

Strategy: Turnkey properties + strong property management

Year 1: First Purchase (Norfolk, VA)

Property: Turnkey SFH

• Purchase: $240,000
• Conventional loan: $192,000 (20% down = $48,000)
• Property manager sourced and vetted remotely
• Rent: $2,000/month
• Property management: 10% = $200/month
• Net cash flow: $100/month (conservative)
• Goal: Appreciation + future home

Process:

• Found turnkey provider online
• Video walk-through
• Property inspection (paid $400)
• Property manager inspection
• Bought sight-unseen

Year 2-4: Add One Property Per Year

Same process for all:

• Turnkey or fully renovated
• Professional property management
• Norfolk/Virginia Beach area
• Target: E-6 to O-3 BAH range
• Focus on appreciation over cash flow

Portfolio After 4 Years:

• 4 SFH properties
• Total value: $1,000,000
• Total loans: $770,000
• Cash flow: $400/month total (after all expenses)
• Appreciation: ~$5,000/month (6% annually in Norfolk market)

Year 5: PCS to Norfolk

Jessica PCSs to Naval Station Norfolk:

• Sells California primary residence
• Moves into one of her 4 Norfolk rentals (terminates tenant lease per SCRA)
• Now has 3 rentals + 1 primary
• Refinances one rental with cash-out refi
• Uses $50,000 to buy Property #5

Year 10: Retirement

Portfolio:

• 8 properties in Norfolk area
• Total value: $2,400,000
• Total loans: $1,400,000
• Equity: $1,000,000
• Cash flow: $4,000/month
• Lives in one property (paid off)

Retirement Income:

• O-5 retirement (50%): $4,500/month
• Rental income: $4,000/month
• Total: $8,500/month ($102,000/year)

Key Success Factors:

• Started early (while overseas)
• Invested in one market (Norfolk)
• Used professional property management
• Focused on appreciation
• Lived below means while active
• House-hacked after PCS

Common Pitfalls to Avoid

Pitfall #1: Overestimating Cash Flow

Mistake:

• Forgetting to account for military turnover
• Underestimating vacancy
• Ignoring leasing fees

Reality:

• Military tenants PCS every 2-3 years
• Turnover costs: 1 month rent (leasing) + 2-4 weeks vacancy + $500-2,000 turnover
• Total: $3,000-5,000 every 2.5 years = $100-200/month effective expense

Fix:

• Budget 8-10% vacancy (even if never vacant)
• Budget 50-100% leasing fee every 2.5 years
• Budget $1,000/year turnover costs
• Don't rely on 100% occupancy

Pitfall #2: Not Understanding BAH

Mistake:

• Rent above BAH for target rank
• Don't realize BAH can decrease
• Assume all military members get same BAH

Reality:

• Rent $100 over BAH = tenant pays out of pocket = you lose to competition
• BAH adjusts annually (can go down in declining markets)
• BAH varies by rank, dependents, location

Fix:

• Research BAH rates for target ranks
• Price at 85-95% of E-5/E-6 BAH
• Monitor annual BAH changes
• Adjust rent accordingly

Pitfall #3: Ignoring SCRA

Mistake:

• Charging early termination fees
• Fighting legitimate PCS breaks
• Not understanding deployment rights

Reality:

• SCRA is federal law
• Violations can result in penalties
• Military members know their rights
• Chain of command will side with service member

Fix:

• Include proper military clause
• Accept legitimate SCRA terminations gracefully
• Plan for turnover every 2-3 years
• Build costs into business model

Pitfall #4: Wrong Property Type

Mistake:

• Buying luxury property for junior enlisted
• Buying studio for E-6 with family
• Ignoring family housing needs

Reality:

• Most military families have 2-3 kids
• Need 3-4 bedrooms minimum
• Garage for gear storage
• Yard for kids/pets

Fix:

• Target E-5 to E-7 families
• 3-4 bedrooms, 2+ baths
• 1,200+ square feet
• Garage and yard
• Safe neighborhood, good schools

Pitfall #5: Too Far From Base

Mistake:

• Buying 30+ miles from base
• Assuming low price = good deal
• Ignoring commute times

Reality:

• Military members wake up at 0530-0600 for PT
• 30-minute commute = dealbreaker
• Won't pay same rent as closer property

Fix:

• Target 5-15 miles from main gate
• 20 miles maximum
• Check commute times (morning rush)
• Price accordingly if further

Pitfall #6: Poor Property Management

Mistake:

• Hiring cheap property manager
• Self-managing from far away
• Not vetting manager for military experience

Reality:

• Bad management = bad tenants = bad cash flow
• Military tenants require understanding of SCRA, BAH, PCS
• Long-distance self-management is nearly impossible

Fix:

• Hire experienced military property manager
• Pay for quality (10% vs. 8%)
• Check references from military owners
• Visit properties 1-2x per year if remote

Pitfall #7: Ignoring Base Closure Risk

Mistake:

• Buying near small installation
• Ignoring BRAC (Base Realignment and Closure) history
• Putting all eggs in one base

Reality:

• Small bases can close
• BRAC rounds have closed dozens of bases
• Base closure = property values plummet

Fix:

• Invest near large, permanent installations
• Diversify across multiple bases if possible
• Research BRAC history and future plans
• Ensure local economy is diversified

Pitfall #8: Wrong Financing Strategy

Mistake:

• Not using VA loan when eligible
• Conventional loans for first properties
• Not house-hacking

Reality:

• VA loan = 0% down = infinite returns
• House-hacking = free housing + cash flow
• Can use VA loan multiple times

Fix:

• Use VA loan for first 2-4 properties
• House-hack each one for 1 year
• Build portfolio with minimal capital
• Switch to conventional after 4+ properties

Pitfall #9: Not Pre-Leasing for PCS

Mistake:

• Waiting for tenant to move out
• Not marketing until vacant
• Losing 1-2 months rent

Reality:

• PCS dates are known months in advance
• Other families are looking 60-90 days early
• Can pre-lease and overlap by 1 week

Fix:

• Start marketing 60-90 days before move-out
• Offer virtual tours
• Get lease signed 30-60 days early
• Coordinate overlap for turnover

Pitfall #10: Competing With On-Base Housing

Mistake:

• Not knowing on-base options
• Pricing same as on-base
• Not differentiating

Reality:

• On-base housing is improving
• Free utilities on-base
• Convenient to work
• Your property must offer value

Fix:

• Research on-base housing (quality, availability, waitlist)
• Offer what on-base doesn't (yard, space, neighborhood, schools)
• Price competitively (consider utility savings on-base)
• Market superior location, condition, amenities

Conclusion: Building Wealth Through Military Housing

Military housing investing offers a unique combination of:

• Stable, government-backed income
• Responsible, accountable tenants
• Predictable demand near permanent installations
• Financing advantages through VA loans
• Portfolio-scaling opportunities

Keys to Success:

1. Understand the Military Lifestyle

   • PCS cycles, deployments, BAH, SCRA
   • Respect service members and their families
   • Be flexible and accommodating

2. Invest Near Major Bases

   • Large, permanent installations
   • Diversified local economy
   • Strong appreciation fundamentals

3. Target the Right Rank & Property Type

   • E-5 to E-7 families
   • 3-4 bedrooms, family-friendly
   • Rent at 85-95% of BAH

4. Use VA Loans Strategically

   • House-hack your first 3-4 properties
   • Zero down, no PMI
   • Build portfolio with minimal capital

5. Plan for Turnover

   • Budget for vacancy and leasing fees
   • Pre-lease aggressively
   • Make PCS transitions smooth

6. Hire Military-Savvy Management

   • Experience with SCRA and BAH
   • Located near base
   • Quick lease-up track record

7. Be a Military-Friendly Landlord

   • Include proper military clauses
   • Understand deployments
   • Communicate professionally
   • Honor SCRA rights

The Long-Term Opportunity:

Military housing isn't a get-rich-quick strategy. It's a build-wealth-steadily approach that offers:

• Consistent cash flow
• Reliable appreciation
• Low-drama tenants
• Government-backed income
• Financing advantages
• Scalability

Whether you're an active-duty service member building a retirement portfolio, a veteran leveraging your VA loan benefits, or a civilian investor looking for stable returns, military housing provides a proven path to real estate wealth.

Start with one property. Master the process. Scale systematically.

Additional Resources

Official Military Resources:

• Defense Travel Management Office (BAH Calculator)
• SCRA Information
• Military OneSource (Family Resources)

Military Housing Platforms:

• MilitaryByOwner.com
• MilitaryHousing.com
• AHRN.com (Automated Housing Referral Network)

Related Guides:

• House Hacking Calculator Guide
• Property Manager Interview Questionnaire
• Lease Violation Documentation System
• Cash vs Leverage Real Estate Comparison

Calculators:

• Property Investment Analyzer
• BRRRR Calculator
• House Hacking Calculator

Last updated: January 20, 2026 | This guide is provided for informational purposes only and does not constitute legal, financial, or investment advice. Military housing laws and BAH rates change regularly. Always verify current BAH rates and consult with a real estate attorney regarding SCRA and military housing regulations in your jurisdiction.