HomeUnion Names the Best Military Towns for Investing in Rental Homes

Homes near military bases in the South and Texas offer the best returns for single-family rental investors (SFRs).

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HomeUnion

Aug 24, 2016, 12:32 ET

IRVINE, Calif., Aug. 24, 2016 /PRNewswire/ -- HomeUnion, an online real estate investment management firm, has released new data on the best military towns for investing in single-family rental (SFR) properties based on average cap rates, which are the relationship between an investment property's net operating income (rents minus expenses) in the first year of ownership and the purchase price of the property. To be included in the list, military bases must have a population of active duty personnel and their families of 15,000 or higher.

SFRs near Warner Robbins, Ga., a U.S. Air Force Base which supports 19,500 active service members and family, have average cap rates of 7 percent. Meanwhile, rental housing in Watertown, N.Y., where the Fort Drum Army base is located, is also an excellent investment with cap rates of 6.9 percent on average. SFRs in Fort Jackson in Columbia, S.C., have average cap rates of 6.3 percent.

"The military bases included in this study are located throughout the United States," explains Steve Hovland, director of research for HomeUnion. "SFRs near military bases that offer the highest returns, however, are primarily located in the South and Midwest," he adds. One California base made the list – Twentynine Palms, a Marine Corps branch with 17,700 people in the Inland Empire.

"Acquiring SFRs near military bases may be one of the best real estate investment strategies, for a variety of reasons," explains Don Ganguly, CEO of HomeUnion. "For example, military service members are employed by the Federal government, which provides greater employment certainty than the private sector. Demand from service men and women is stable, particularly as the military limits overseas deployments following two protracted wars. In addition, the military compensates service members based on market-rate rents, rank and dependents, giving landlords incentive to lease to military personnel and their families," he adds.

"The transient nature of serving in the military also means that there is a substantial population of government workers that prefer to rent rather than buy, driving demand over the short and long term," adds Hovland.

Here's a complete list of the best military towns for investing in SFRs:


Military Base

Metro

State

MHA[1] Cap Rate

MHA Area Rent

MHA Price

Active Duty & Family

Branch

Robins AFB

Warner Robins

GA

7.0%

$965

$93,900

19,500

Air Force

Fort Drum

Watertown

NY

6.9%

$1,238

$121,700

20,100

Army

Fort Jackson

Columbia

SC

6.3%

$1,145

$120,500

15,000

Army

Fort Sill

Lawton

OK

6.3%

$822

$87,000

46,700

Army

Fort Benning

Columbus

GA

6.1%

$914

$99,100

86,800

Army

Sheppard AFB

Wichita Falls

TX

5.9%

$883

$100,900

16,800

Air Force

Fort Gordon

Augusta

GA

5.8%

$1,078

$119,700

15,800

Army

Fort Hood

Killeen

TX

5.8%

$1,097

$126,500

151,900

Army

Fort Sam Houston

San Antonio

TX

5.6%

$1,294

$152,500

19,600

Army

Offutt AFB

Omaha

NE

5.5%

$1,193

$140,800

23,300

Air Force

Fort Knox

Louisville

KY

5.5%

$968

$115,100

100,200

Army

Fort Stewart

Hinesville

GA

5.4%

$1,208

$146,000

57,300

Army

Eglin AFB

Valparaiso

FL

5.2%

$1,382

$171,100

20,700

Air Force

Fort Bragg

Fayetteville

NC

5.2%

$940

$120,900

55,500

Army

Camp Lejeune

Jacksonville

NC

5.0%

$994

$129,300

46,100

Marine Corps

Fort Campbell

Hopkinsville

KY

5.0%

$977

$134,700

62,400

Army

Twentynine Palms

Inland Empire

CA

4.9%

$1,062

$135,900

17,700

Marine Corps

Mayport Naval Station and Jacksonville NAS

Jacksonville

FL

4.8%

$1,251

$174,700

76,700

Navy

Cherry Point MCAS

Havelock

NC

4.8%

$1,064

$153,200

35,200

Marine Corps

Langley AFB

Newport News

VA

4.7%

$1,378

$189,500

18,000

Air Force


1 MHA (Military Housing Area): MHAs are a set of zip codes set aside by the government to compute BAH (Basic Allowance for Housing). BAH is an allowance determined by the U.S. Dept. of Defense prescribed by geographic duty location, pay grade, and dependency status. It provides uniformed service members equitable housing compensation based on real estate prices in local civilian housing markets when government quarters are not provided.

About HomeUnion

HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and proprietary analytics to incorporate data on over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 18 locations. HomeUnion's role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.

SOURCE HomeUnion