Buying first home with VA, planning to rent in 3 years, wise?

Question

I'm buying my first home with my VA loan. I will be reassigned in about 3 years and would like to rent the property after that. The house is brand new and in a very nice neighborhood. It was initially 150,000 but got reduced to 133,000. Am I doing the right thing by doing this and then planning to rent in 3 years since I won't be here?

Answer 1

I served for 21+ years and did exactly what you are planning on doing. Every time I PCS'd I rented out the home I was living in and bought a new one at my next duty station, including 2 in the UK.

When I retired about 10 years ago I had a VERY nice portfolio of rental properties generating a positive cash flow and a nice tax writeoff. I've since divested my holdings -- dealing with tenants can be a royal pain in the kiester -- but I netted out well into 6 figures even after paying the capital gains taxes.

Some folks may tell you that you cannot rent out a home purchased with a VA loan. This is NOT true! The only qualifier on owner occupancy is your intent to occupy the home as your principal residence when you close. The VA and lenders all recognize that circumstances can change with time and you will not be held to the owner occupancy clause unless they can prove that at the time you closed on the sale you never intended to ever occupy the home as your principal residence.

Of course you can only have one VA loan at a time but the VA is not the only source of mortgage funds. You can still get an FHA loan on your next purchase and conventional financing is always available.

Answer 2

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Answer 3

Rent To Own Homes - http://RentToOwnHome.uzaev.com/?aYgL

Answer 4

I am a mortgage broker, and finance such transactions. This is an excellent way to invest. The loan is at a better rate when used to buy primary residence, even if you switch it to investment property later.