Why Real Estate for the Military Member

The military provides an amazing opportunity for young men and women to learn a tangible skill, gain confidence and poise of leadership, interact with men and women from around the globe, and prove their worth through resilience in crisis situations. The one thing is does not provide, and rightfully so, is lifestyle stability. 

As any military member will attest, we all hang up the uniform eventually. It is our responsibility to plan for that eventuality during our younger years. Retirement benefits have shifted greatly during the last few years as the military has moved toward a blended retirement system and away from a strict pension plan. This puts even more importance on planning on the member, especially in their young years. 

For all the things the military does a great job at, financial education is one area where there is a glaring void. Those stories people tell about the young military member buying a car way to big for their lifestyle and financing it with an 18% loan from the dealership aren't entirely hyperbole. I have legitimately seen that done...it is absolutely ridiculous on so many levels. 

Obviously, I would not recommend anyone getting into real estate until they get their own personal financial house in order. However, for the members that have the budgeting skills down, aren't buying those $30,000 SUVs on a $30,000 salary, and are beginning to save up and accumulate wealth there are some ways to leverage the power of real estate to put them in a position to not have to rely on pensions or other government programs in their old age. 

1. Rental Properties Work for You Whether You're Deployed or Not

One of the coolest analogies I have heard with regard to rental properties is that "Rental properties are like little oil pumps." This is awesome on a number of levels. First, it de-romanticizes the subject. We aren't buying homes, we are buying investments. Second, those things pump 24 hours a day, 7 days a week. A rented (very important key) rental property does the same exact things. 

2. The Military Provides an Awesome Opportunity to House Hack

This is more true for single military members (unless you get your spouse on board - which would be AWESOME), but the military provides an awesome opportunity to house hack. You are living a transient lifestyle as you'll likely only be in the same place for about 3 years. This means most military members are in a rental mindset. Also, as you know there is a huge incentive to saving as much as possible on your monthly rents. What better way to do all of this than to live with your buddies. They pay a lower rent, you live for free (or nearly free) while building equity. It is a true win - win. Don't feel like you are cheating your buddies either. You have assumed a whole lot more risk by being the property owner than they have for renting - so you should be compensated for that risk. 

3. All of the Other Benefits of Real Estate that Everyone Else Enjoys

Well, frankly, real estate is great for the military member for a lot of the same reasons it is great for other folks. I believe that rental property and note investing are the niches most congruent with the military lifestyle, but you will find members that get involved with flips, wholesaling and the various other niches. Rentals capitalize on the four wealth builders of cash flow, appreciation (usually), mortgage paydown, and tax benefits (mainly depreciation). 

The military does a great job at teaching us to take care of each other in stressful situations. However, we are responsible for taking care of our own financial house and preparing ourselves for those days after we hang up our uniform. Real estate certainly is not the only way to do so, but I believe that it provides a lot of value to those willing enough to take a step forward and do it.