Military veterans will receive a pension if they served on active duty for at least 90 days during a period of war. Honorable discharge is required, and single surviving spouses may be able to claim their spouse’s benefits.
And there’s also no requirement for a person that is disabled.
The problem is, as with a lot of pension and retirement accounts, that the income is not enough to survive on in most parts of the country. Can you survive on $13,166 a year, or $1,097 per month? Most people couldn’t. Couples or veterans with a child will receive $17,241 per year, or $1,436.75 a month.
Putting this into perspective, rental costs for an apartment are $1,300 per month on average. Even in cities where costs are lower, you can expect to pay $900 a month for a one-bedroom apartment. You’ll have less than $200 to cover your food and utilities if you’re a single veteran.
Investing is a smart option, especially for younger veterans, because you have more time for your investment to grow.
The older you are, the faster you need to see returns on an investment, and this will lead to higher risks that can lead to losses.
Real estate is often a smart choice as an investment because it allows veterans to have extra monthly income. Commercial mortgages are also available to veterans, offering additional benefits for a veteran that wants to get the most out of his or her time in the military.
Commercial vs Residential Real Estate
Commercial real estate is a great option for anyone because it allows you to invest in real estate that may include:
- Raw land
- Retail space
- Office buildings
All of these options produce income for the investor, and the earning potential of commercial properties is higher. But commercial property also comes with larger costs, management fees and having to upkeep the property.
If you have a good idea, you do have the option of crowdfunding the development process. Through crowdfunding, others will own a portion of the project, but you can maintain a large portion of the project.
Veterans also have commercial real estate loans available if they want to start a business. This is offered through the SBA 504 & 7a programs.
Residential investing is a less stressful option, and you’ll be dealing with fewer tenants and less overhead. You may choose to purchase a smaller home and rent it out. There are also options through Airbnb and other portals to allow for weekly income.
You’ll be sacrificing returns, because commercial properties almost always produce higher income, but you’ll be less stressed and have far lower overhead.
Tenant laws will need to be followed and management will be required, but if the property is close to your home, it won’t be an issue to manage it on your own. But when you have just one tenant, there’s also the risk of income not coming in for months at a time if the tenant decides to leave or they stop paying.
Every veteran has their own risk appetite, but with real estate, if done properly, the investment can help fund your retirement.