Point-Counterpoint: 6 Pros of Investing Near Military Bases

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A new series of articles we’re calling “Point-Counterpoint” will focus on one real estate investing issue at a time from two different perspectives. This edition addresses whether it’s wise to buy property located near military bases. Is it a good idea or bad idea?

This post discusses the pros from the perspective of an investor who has been there and done that. Weigh-in with your opinion below the article in the comment section, and be sure to read the entirely opposite stance here. 

Plenty of investors will tell you that investing near military bases is one of the best places to do it, while others will tell you to avoid it like the plague. Here’s a list of the top reasons that you should be investing near military bases.

The Upside of Investing Near Military Bases

1. Volume

The first benefit of investing near a military base is the high volume of incoming personnel at any given time. This is an obvious benefit because it allows your rental to get more exposure and views to help decrease the amount of vacancy you might have.

2. Families Crave Stability

Military families want stability. Military families move once every two or three years on average. (My family has moved four times in five years.) Families get burned out of moving and changing homes, so oftentimes the mindset is to stay put for as long as possible.

With how busy the military life has become, families want stability more than anything, and they are willing to stay extended periods of time to have it if they can.

Related: How to Rent Your House [The Definitive Step-by-Step Guide]

3. Most Families Rent vs. Buy

Congratulations, you just got orders to “Fort You-Name-It.” How is the housing market there? You have no idea, but you have to move in three months. This is the most typical situation military members find themselves in.

When orders get cut to go to a new post, the best immediate option for most is to rent because people don’t want to jump into a market they don’t understand. This is good for you as an investor, because it means one more family will potentially be touring your home.

4. Chain of Command

A little-known benefit of renting to military members is the ability to get their work involved if they quit paying rent. You would be surprised how much influence a soldier’s chain of command can have over their personal affairs, especially when they can’t afford to pay their rent.

Commanders care about their soldiers, because they know that if things aren’t OK at home, they won’t be OK at work. This doesn’t necessarily mean if you tell their chain of command that you are missing rent that they will write you a check, but they may be able to help you get it by helping that soldier with financial counseling, etc.

5. Basic Allowance for Housing

Service members get a stipend called Basic Allowance for Housing (BAH) from the government that helps the service member pay for housing based upon their current rank, years of service, and whether or not they have dependents. This is guaranteed money from Uncle Sam.

Whether or not the service member uses it for housing is up to them, but what the vast majority of service member-tenants will do is look for housing that costs about 80 percent of their BAH. The other 20 percent is usually reserved for utilities.

Service members usually budget to have BAH cover all of their housing expenses, including rent, utilities, and other common costs associated with renting. If you know what the local BAH is in your market, you can appropriately adjust your rent so you are not overpricing or undershooting that market sweet spot.

Related: How to Be a Landlord: Top 12 Tips for Success

6. Better Tenants

Renting to military members can be a great way to get good, responsible tenants in your home—especially if your house rents to officers and senior non-commissioned officers. These people have typically passed their “wild child” days and often have families with children.

They also have a higher BAH rate, and they typically look for a nice, large home to raise their family and entertain friends. This is obviously no guarantee, but your odds of attracting a quality tenant base may be higher.

Conclusion

So what do you think? Seems like an investor’s dream come true, right? Good tenants, timely rent, high volumes of new tenants on the regular.

Well, I’ll be the first to tell you that it’s not all it’s cracked up to be. As a matter of fact, I am turning my strategy away from investing near most military bases. Check out my next article about the top reasons you shouldn’t invest near military bases!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.