Sacramento, CA · Member since 2016 · 7 posts · 0 votes
Interviewing husband and wife applicants to lease our almost new rental home in a new neighborhood in California. He serves in the Canadian military and will be working on a U.S. base nearby for the coming years. Says his commander requires him to find a rental with a lease term of exactly 4 years and 4 months for a set rent amount, that he can break if he's transferred to another base. Will not do a renewable term lease or allow me to make any adjustments to the contract or rent for the entire time. Our rental market is heating up, but they are willing to pay almost 15% above current market rent to lock it in for the duration. They seem nice and passed background and credit checks. But would it be wise for me to sign such a long lease with tenants I don't know in such a nice house that I want to take good care of?
Anchorage, AK · Member since 2015 · 83 posts · 27 votes
10y
I mean I don't see why it would be a problem? You're getting what you want as a property manager and they're even allowing you to just the terms of the lease as you go. It's one of those situations I think where you need to go with your gut. Does the situation feel right? Are these tennants you feel like you can trust?
Anchorage, AK · Member since 2015 · 83 posts · 27 votes
10y
I mean I don't see why it would be a problem? You're getting what you want as a property manager and they're even allowing you to just the terms of the lease as you go. It's one of those situations I think where you need to go with your gut. Does the situation feel right? Are these tennants you feel like you can trust?
I mean I don't see why it would be a problem? You're getting what you want as a property manager and they're even allowing you to just the terms of the lease as you go. It's one of those situations I think where you need to go with your gut. Does the situation feel right? Are these tennants you feel like you can trust?
Actually, they won't allow any changes to the lease.
Anchorage, AK · Member since 2015 · 83 posts · 27 votes
10y
Ahhhhhhh then that makes the decision a bit tougher. Well I think the 15% above market value still makes it fair for a cash flow perspective do those values line up with the appreciation you've seen over the past couple of years?
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
10y
Of course do it. You are already 15% over market rates. 4 years with no turnover is a better bet than 1 year with turnover and a incremental rate increase. I would take that deal any day of the week.
Investor · Austin, TX · Member since 2013 · 662 posts · 1k+ votes
10y
Ultimately it is gut call. If you like them after meeting them then I would seriously consider leasing to them. They are willing to pay 15% above market rate. Usually I find military personnel to be very responsible especially those from other counties stationed here in the USA. I would get the name of the commander and even talk to him/her and address any concerns that you may have. Also keep in mind that keeping a renter four years is a big plus and money maker that reduces transition cost from renter to renter. Bottom line, if you think they will take good care of your property then I think I would go with them.
Sacramento, CA · Member since 2016 · 7 posts · 0 votes
10y
It makes me feel better to hear so many positive replies. I would certainly LOVE a quality long-term tenant. Only real concern is what if I overestimate them and they turn out to not be so quality.
Sacramento, CA · Member since 2016 · 7 posts · 0 votes
10y
Did some recalculating ... I think they might really be offering me only 10% over current rental market, especially considering the home is so new and I'm getting many calls from people who want to rent it.
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Sure if they are willing to pay all the rent up front. I've rented to military and have never had this ridiculous requirement. Of course THEY can walk at any time. Sounds fishy.
Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
10y
@Francis A. List it for 15% more than you're currently thinking and see how many bites you get. If you get a lot, you're under market already. If you don't get enough bites quick enough, slowly drop the price (go to 10% over, etc), to figure out how much they're actually overpaying. Counter with whatever makes the risk you end up way under rents worthwhile. 4 years is a *long* time to hold a rental without changing the price, I'd want something more like 20-25% if I was going to even consider it. I'd also want some pretty heavy penalties if they break the lease early.
Rental Property Investor · Grand Rapids, MI · Member since 2016 · 262 posts · 205 votes
10y
Sounds fishy to me, too. What's their problem with a 1 year renewable lease? If I did do it I would make sure the lease is well spelled out and the numbers make sense for me. I like the suggestion about bumping the price up to see if you get more bites to find out for sure what the market rent for your place is.
Investor · San Antonio, TX · Member since 2016 · 90 posts · 28 votes
10y
Personally, I don't like the way it sounds. What kind of military commander would have such a requirement? I would recommend doing some follow up to ensure he is actually in the military and talk to his commander directly by calling a base number, not a cell phone. If everything checks out good I would love to have a military person committed to a lease for 4 years.
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
10y
Francis A. I smell a skunk too. I would tell them you want to speak with this commander. I can't swallow that commander setting the terms and rent for your property. I think the applicant is trying to get a lease that won't allow you to raise the rent for 4 years, and won't lock him in for 4 years either. I'm skeptical that his commander even cares about that. I bet the commander doesn't care if he lives in your rental or base housing. If he is lying he won't make a good tenant. (If he can lie to you he can steal from you). If something seems too good to be true it probably is. Is this common practice with other land lords in your area? If you send him down the road will he find a LL that will freeze their rent for 4 years?? RR
Investor · Henderson, NC · Member since 2016 · 484 posts · 208 votes
10y
Sounds AWFULLY suspicious to me. Can't understand why the Commander would care or dictate housing at all? But I do know Canadians do some weird stuff....
Be damn sure this is legit before you move forward. The fact is if you don't take this deal, it's unlikely many other landlords will either. Makes me even more suspicious that a commander would ask such a thing in the first place.
Investor · Eastlake, OH · Member since 2015 · 174 posts · 85 votes
10y
Remember folks this guy is a Canadian military member in the US. The Service Members Civil Relief Act would probably not apply to a Canadian. And yes Commanders can say some off handed stuff just cause. They may carry a certain rank it does not mean they know real estate and lease laws. But it is a very reasonable demand a foreign member attached to your unit to secure housing for their family for the entire time there orders are for. Often times my biggest concern is knowing that my sailor's family's are in a good situation at home, which ensures my sailors can deploy with an easy mind.
As far as renting the place, if everything checks out I would rent to him for an above market rent. I do this all the time with my SFR. I'll rent for the entire time of orders at a rate based off of their housing allowance. Which is usually a bit higher than the market rate.
Investor · Silver Spring, MD · Member since 2014 · 178 posts · 60 votes
10y
Renting to military members has a lot a really good features like the threat of the loss of clearance for failure to pay by the tenant. The sailor and solder's act works for you and the tenant. But I don't think it applies to foreign military even if attached to a US base but it may. Military have to have the Commander's (its someone in his chain acting on his behalf) permission to live off base if they want to keep their housing allowance. Pretty straight forward with the shortage of base housing at most locations. Not that you'll be able to find out, but if this is swap with the Canadians (we send one they send one) we may be paying his housing and they pay the the American's housing at the other end. Military make great tenants for the most part.
Investor · New Ipswich, NH · Member since 2014 · 10 posts · 1 vote
10y
Negotiate an early termination fee to protect yourself. I do five year leases all the time in my commercial properties so I'm not opposed to a four year lease but by giving them the ability to break the lease at any time gives them all the control. Balance it out with an early termination fee and go for it.
Negotiate an early termination fee to protect yourself. I do five year leases all the time in my commercial properties so I'm not opposed to a four year lease but by giving them the ability to break the lease at any time gives them all the control. Balance it out with an early termination fee and go for it.
Ken, what is known as the sailors and solders act dictates the termination conditions. You can put anything you want in lease it just wont be enforceable for American Military. I'm involved in a 10 year commercial lease too. Great deal.
See, you learn something new everyday! I did not realize that. Thanks
They still make for great tenants because they have to answer to their employer for everything in their private life. <Grin> So rental near military bases tend to be a good thing unless BRAC'd
Investor · Kansas City, MO · Member since 2013 · 465 posts · 170 votes
10y
This does not pass the smell test. With a list of other qualified renters in reserve... I'd advertise with a 5-15% markup and see how many bite. Rent out to another tenant who's not requiring a 4 year lease. Some states actually do not allow leases to go longer than 2 years. Check local laws.
Rental Property Investor · Gambrills, MD · Member since 2014 · 372 posts · 88 votes
10y
Just a consideration, but a lease in excess of three years could trigger a due-on-sale clause. A bank may exercise the due-on-sale clause if you enter into a lease in excess of three years.
This does not pass the smell test. With a list of other qualified renters in reserve... I'd advertise with a 5-15% markup and see how many bite. Rent out to another tenant who's not requiring a 4 year lease. Some states actually do not allow leases to go longer than 2 years. Check local laws.
Andy it's interesting getting multi state and county requirements on BP isn't it. The county I live in, in Maryland will not allow me to offer less than 2 years on a lease. But the tenant can counter with one year. We get so many people in our area from out of state who at first look are surprised by two years when they see it. Then we tell them we have to offer and they can counter.
Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
10y
Speak to the commanding officer that wants them on a 4 year lease, just to make sure. If anyone asks why, just say that you've never heard of a thing. If you know the name of the guy, call the base directly.
I'd rent to military in a heartbeat, especially a 4 year lease, regardless of whether they pay more or get locked in. These people will treat your place like a castle!
As for the service act that allows them to break a lease early, not sure it applies to a foreign serviceman, but you would respect it because you don't want to be on any blacklist at the base. All military bases have lists of companies and landlords that are banned. (I know, because a local mechanic here kept ripping off servicemen, eventually, the base banned anyone from using him, and I believe he was broke within 6 months.)
This does not pass the smell test. With a list of other qualified renters in reserve... I'd advertise with a 5-15% markup and see how many bite. Rent out to another tenant who's not requiring a 4 year lease. Some states actually do not allow leases to go longer than 2 years. Check local laws.
Andy it's interesting getting multi state and county requirements on BP isn't it. The county I live in, in Maryland will not allow me to offer less than 2 years on a lease. But the tenant can counter with one year. We get so many people in our area from out of state who at first look are surprised by two years when they see it. Then we tell them we have to offer and they can counter.