I have served eight years in the military and in that time I have acquired three homes. Two of these homes were funded through the VA Home Loan. From my experience, many of my Veteran comrades have two misconceptions. First, they think they can only use the VA Home Loan one time or only if they sell their home that is currently under the VA Home Loan. Second, they believe that they have to live in it forever or sell it and that there is no other option.
These two misconceptions scare Veterans in to thinking they can only purchase their “forever” home. This is not the case in most instances. Owner occupancy is one of the pillars to the VA Home Loan. You must intend to make the home your primary residence and you must move in within 60 days of closing. Though the 60 day deadline is flexible, the owner occupancy is not. You must occupy the residence once you purchase it.
So how do you turn your VA Home Loan property into a rental property? There are two ways to create a rental property from your VA Home Loan. First, there is nothing saying that you have to wait until you are out of the military to take advantage of your VA Home Loan. So that means you can purchase anytime throughout your career. What happens during this time you are in the military? Well, you PCS from one place to another on average of once every 4-6 years. So what are you supposed to do with your home in Goose Creek, South Carolina or Charleston, South Carolina when you PCS to Joint Base McGuire-Dix-Lakehurst, New Jersey? More than likely you can’t afford two house payments. Therefore, you can try to sell your home or make it a rental property. You don’t have to refinance the house out of the VA Loan into a conventional loan, either. Secondly, the VA Loan can be used to purchase a multi-family unit with up to four units. The thing to remember here, again, is occupancy. You must occupy one of the units yourself, but you can still rent out the other units and once you PCS you can rent out the entire unit.
Finally, you can still use any of your remaining benefit to purchase another house. Perhaps this will be your “forever” home. Keep in mind, however, if you are about to PCS and you don’t want to, or can’t, sell your home think about renting it out. Speaking from experience and as a property manager, it is costly, frustrating, and at times impossible to manage the property yourself. If you are in New Jersey and your rental home is in Charleston how will you show the property to tenants, clean/repair the property between tenants, or even market the property? Real Property Management Charleston Choice can help with all of your property management needs. See our “Should I manage my own property?” and “How to choose a property manager” links to help you decide better. Please talk to a VA Home Loan lender for more information if you are looking to purchase a home or check out this video which is a great overview of the program: VA Loan Q&A