Military Landlords
Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
If you own one or multiple single families that you rent to service men/women, I would love your response to these questions:
- What's the best part about investing with military tenants?
- What is your biggest difficulty?
- In what area is your investment?
Thanks, if you're particularly passionate or knowledgeable, I would love to connect and get further advice.
There are tons of advantages and a few disadvantages. First you know they have a steady income and get paid on the 1st and the 15th. Their income is public knowledge and you know how much they get for housing allowance. They are not going to have a felony. When they leave you know there is going to be someone else to replace them. The best resource for finding housing when we move is to ask the people leaving, so a lot of times the turnover is one person moving out and their replacement moving in. You have web sites like www.homes.mil and www.coastiesonthemove.com that can help you find military specific tenants.
Do your due diligence, there are a lot of service members who rack up a lot of debt because of the steady income and have horrible credit. Check the BRAC for a local base (Base closure and Realignment Comission) ensure the base isn't getting closed.
The soldiers and Sailors act allows a service member to get out of their lease (or any contract) upon receipt of orders. If this ever happens call the member's command to double check, I have seen people forge their orders to get out of leases. Which leads me to my last point. Service members are people, which means they do bad things sometimes. we all like to believe that every service member serves the country and the civilian populous with honor and respect. not always the case there are bad people in the military also, most are good people and will be above average tenants.
As a prior Enlisted military man myself, here is what I saw during my 5 years.
1) Military tenants if they are late. Contact their command. You'll get paid. If not talk to that commands command, or someone in charge of the base. (Surprisingly easy to do if you just keep calling around (Numbers are on base website.)
2) You know they'll have steady jobs and get paid on the 1st and the 15th of every month. But I have watched a few times where they were deployed at 30 days notice. Does not happen often but it can.
I don't rent to them as I'm currently to far away from a base but I would in a heart beat.
There are tons of advantages and a few disadvantages. First you know they have a steady income and get paid on the 1st and the 15th. Their income is public knowledge and you know how much they get for housing allowance. They are not going to have a felony. When they leave you know there is going to be someone else to replace them. The best resource for finding housing when we move is to ask the people leaving, so a lot of times the turnover is one person moving out and their replacement moving in. You have web sites like www.homes.mil and www.coastiesonthemove.com that can help you find military specific tenants.
Do your due diligence, there are a lot of service members who rack up a lot of debt because of the steady income and have horrible credit. Check the BRAC for a local base (Base closure and Realignment Comission) ensure the base isn't getting closed.
The soldiers and Sailors act allows a service member to get out of their lease (or any contract) upon receipt of orders. If this ever happens call the member's command to double check, I have seen people forge their orders to get out of leases. Which leads me to my last point. Service members are people, which means they do bad things sometimes. we all like to believe that every service member serves the country and the civilian populous with honor and respect. not always the case there are bad people in the military also, most are good people and will be above average tenants.
I am retired military and rent to military tenants.
The Pros to renting, in my mind, are:
1. As @Andy Robison stated, if you have a problem, call their chain of command. You can require they give you their unit and unit's phone number on the application. Be sure to call the number and verify the applicant is actually in that unit.
2. You can see how much their housing allowance (BAH) is and adjust rent increases based on BAH increases.
3. You can register your properties with the post housing office. The housing office will come out and do a walk through of your vacant properties and certify them as approved by them.
4. Military tenants almost always know someone who is looking for a place to rent if you have multiple properties.
5. If a military member runs into financial trouble, there are on-post agencies that can help them pay the bills. For the Army, they are Army Emergency Relief, the Chaplain's office, and Army Community Service.
6. Military members can usually get deposits for utilities waived by the utility companies. That gives them more cash to pay your security deposit.
7. Military members do not want evictions or court orderts on their records because it may cost them their security clearance, if they have one.
The Cons to renting:
1. Junior military members may not be familiar with living on their own, away from home, and think your rental is the place to run wild.
2. Most, if not all, leases require a military clause to let the military member out of the lease if they are deployed, assigned to another post, or moved into on-post housing.
3. The Servicemembers Civil Relief Act can make it more complicated to evict or collect debt from a military member. Screening is just as important with military members as with civilians. Don't assume that because they wear the uniform, they are reliable and have good financial practices.
Your experience may vary. But I prefer to rent to military, border patrol, and law enforcement.
Like I always post to these types of military renting threads:
Commanders/Chain of Command CANNOT ORDER a military member to pay bills. This is a civil matter, not a military matter. If you run into an informed service member, which anyone with more than 6 months in, they will know this. So if you run into a guy who wants to be shady and knows the rules, you will be out of luck until you file a lawsuit.
I've never been asked or required to give my unit information when I rented the two places before I bought my house. Never would. I see no reason as to why this is important to a landlord. I promise you there will be someone else out there that will take my money without this information.
I know the information because I am currently an active duty Staff Sergeant in the US Army.
As both active duty Air Force and a landlord who rents to military, I'm going to agree with everything the previous folks have said. You can always ask for unit/phone number, just like you ask for employer. If they don't give it to you and give you a generic "US Air Force, Pentagon" you can ask for more. You're going to want to talk to someone who can verify employment. That being said, they don't have to give it to you. Some folks, especially in areas full of special forces may not be willing to provide you that information.
I also second the person who said to verify PCS/deployment orders. I had a military tenant who tried to tell me he had received orders and wanted out of his lease. Turns out he was just changing units on the same base (PCA)... I found out after he was already moved out. I kept his deposit to help me pay for the re-rental costs. I'm not sure why he didn't just talk to me or my pm...I would have let him go with no cost, but not once he was dishonest with me all bets were off.
I'm curious, what drove this question?
Like I always post to these types of military renting threads:
Commanders/Chain of Command CANNOT ORDER a military member to pay bills. This is a civil matter, not a military matter. If you run into an informed service member, which anyone with more than 6 months in, they will know this. So if you run into a guy who wants to be shady and knows the rules, you will be out of luck until you file a lawsuit.
I've never been asked or required to give my unit information when I rented the two places before I bought my house. Never would. I see no reason as to why this is important to a landlord. I promise you there will be someone else out there that will take my money without this information.
I know the information because I am currently an active duty Staff Sergeant in the US Army.
If one of my sailor's landlords called me up and complained about them not paying, they would pay. It doesn't really matter if its an order or not an order, it would just happen. It must be a Navy thing. You know, civil responsibility going with the whole Honor, Courage, Commitment thing.
I would also never rent to someone who I couldn't call their place of employment to verify they work there. In the past I definitely listed my department heads as someone would list a manager at a typical job and reminded the property manager some of the pro's about renting to military to secure a hot rental.
@Shawn Dandridge here's the deal... If a service member isn't paying bills they will lose their clearance and a commander can suspend a clearance pending adjudication. In the vast majority of cases a clearance is a requirement to continue to serve. So a first shirt/CC have a strong card to play when it comes to timely bill payment. There is also a focus on supervisors watching out for the financial well being/performance of their troops so while technically no one can order you to pay there is a tremendous amount of pressure. That being said like others mentioned with well over a million active duty members alone numerically speaking there are all kinds of bad apples.
Bottom line is military tenants are a better bet than civilians overall. They've all had a background check and have a career on the line. You'll usually find that in a military town landlords angle to attract and rent to military, in fact, I know some who will rent only to military.
I would also like to add that there are FELONS in the military. A simple search around any base will show service members convicted of sexual assault, battery, ect. so are still on active duty. Although this is becoming a bit rarer with the drawdown, there are some still hanging around. Not every job in the military requires a clearance (i.e. cook, supply, mechanic). I do agree that a chain of command can exert pressure on a troop but like I've said previously, they are under no obligation to pay just because " I said they will pay". I have seen many senior NCO and officer's get embarrassed for thinking this way.
In the Air Force I do not believe there is a single job that doesn't require SECRET anymore. While I'm certain there are felons they should be on the way out. Again, I will caveat this as Air Force specific but you're hanging onto a thread with simple non-judicial punishment for something like a DUI. There is no way an Airman will remain one with a felony. And I've worked with other branches enough to know in at least a strong majority of cases this holds true for them too.
Like I always post to these types of military renting threads:
Commanders/Chain of Command CANNOT ORDER a military member to pay bills. This is a civil matter, not a military matter. If you run into an informed service member, which anyone with more than 6 months in, they will know this. So if you run into a guy who wants to be shady and knows the rules, you will be out of luck until you file a lawsuit.
I've never been asked or required to give my unit information when I rented the two places before I bought my house. Never would. I see no reason as to why this is important to a landlord. I promise you there will be someone else out there that will take my money without this information.
I know the information because I am currently an active duty Staff Sergeant in the US Army.
He is correct. The SNCOIC/CO/XO/SGTMAJ cannot ORDER someone to pay debt. They can however inform them that if they don't pay debt they will be charged under
Article 134. Maximum punishment. Bad-conduct discharge, forfeiture of all pay and allowances, and confinement for 6 months.
And yes, they will pay the debt rather than get NJP'd. No lawsuit needs to be filed all that needs to happen is a call to the CO. Give them a chance to solve it internally, if not then file a lawsuit.
I am getting a bit more interested in the military investing community. My brother is a 1st Lieutenant at Ft. Richardson in Alaska. It's been my dream to get him involved in real estate investing, regardless of where he is based.
@All
Thanks for all the input about what is appropriate and what is not. From my perspective, military tenants still seem to outshine the norm.
Like I always post to these types of military renting threads:
Commanders/Chain of Command CANNOT ORDER a military member to pay bills. This is a civil matter, not a military matter. If you run into an informed service member, which anyone with more than 6 months in, they will know this. So if you run into a guy who wants to be shady and knows the rules, you will be out of luck until you file a lawsuit.
I remember as an NCO marching one of my men down to the local PX to square up a payment issue. So while yes, they may not be able to ORDER them to pay, a little unwanted attention from higher ups tend to get those bills paid quick.
James,
You're probably talking about military star card payments. They actually send a list monthly to each soldier's command whose late or past due. What most soldiers don't know is that AAFES/Military Star can take the entire balance directly out of your paycheck so they will always get their money. Kinda like the IRS.
I wouldn't ever rent from a military landlord. They have too much power when it comes to court action.
A good friend was taken for her entire deposit by an active duty landlord. I reviewed all documents and could see she would win her case. She took him to small claims in March of 2015 papers were filed.
Due to him being active duty and close to deployment he legally can delay the case until October of 2016. He is holding her entire deposit until then, it is so unethical and wrong. If you don't have time to handle landlord issues, don't be a landlord.
Tim,
How is this unethical and wrong? That is the law. I got a speeding ticket back in 2007 right before I deployed to Iraq. I delayed it for a year because the law said I could. I don't see how I did anything unethical and wrong. I'm sure that guy has much more to worry about when he's gearing up for a deployment than a small claims lawsuit.
If you think its fine to keep a single mothers deposit for over a year on a case you're likely going to lose thats your call.
I don't care who you are or what you do, to me that makes you unfit to be a landlord.
I have heard the same comments from my cousin who rents to officers and their families in the Tampa Bay area. My cousin is an accidental landlord, and as such wanted the most hassle free tenants.
Not that I would suggest managing from a distance (Virginia to Tampa), but he has managed to do it with little to no hitch. That's a rare kind of tenant.
It is definitely possible to manage properties remotely and you are right, having that "rare kind of tenant" is the key. I manage my properties from Montana (one in Las Vegas and one in Northern California). It is good to have a friend, family member, or handyman in the local area to help with those quick fixes or just drive by when you need it.
I wouldn't ever rent from a military landlord. They have too much power when it comes to court action.
A good friend was taken for her entire deposit by an active duty landlord. I reviewed all documents and could see she would win her case. She took him to small claims in March of 2015 papers were filed.
Due to him being active duty and close to deployment he legally can delay the case until October of 2016. He is holding her entire deposit until then, it is so unethical and wrong. If you don't have time to handle landlord issues, don't be a landlord.
Yes Its kind of difficult to defend yourself in court when you're overseas, away from those you love and your life completely. These men and women aren't on vacation, they are focusing on how best to defend America and defend guys like you. Sure, there are definitely some bad characters in the military, but more often then not, its a military member who is the one being taken advantage of. I know from personal experience, and appreciated the chance to wait to return to the US to settle the matter in person.
We rent 3 and 4 bedroom, brick single family houses near two Air Force bases, in two States. Our property managers put the houses up for rent to the general public in communities near to the bases, and we end up renting to a number of military families. It has been a good strategy over the years. Granted, there are a number of support jobs, contractor jobs, and GS jobs near bases. These areas have (mostly) stable employment. That is a good thing for investors. Occasionally, we have a change up, such as a training school that shortened classes, and so the turnover increases or has decreased.
The only thing I would worry about is the base itself. If you are managing properties near a large base you should be ok but lots of smaller bases have shut down over the years from BRAC.
I am a military wife and I would love to buy some houses near a good base.
its unlikely for many bases to close in the US because it becomes a political game and no Congressman is going to let a base close ...they will fight as long as they can because they lose votes and jobs if they let it close...all politics
Understood. I will definitely keep my eye on the Brac. Unfortunately, the potential for a base close is much like the major employer in town closing. It's a gamble that we all take.
Thanks for all the feedback.