Military tenants

20 Replies

Hello BP! Has anyone here had any real issues with military tenants? Deployments don't count as they're doing their jobs and protecting our freedom. I just have concerns due their young age much like college kids.

I just found the related posts. Nevermind!

We aim for E-5 and up, so they have some time in service.  That also allows us to determine what they are paid, also called their BAH cap.  Many of our rentals are near Air Force bases.  All the best~

Not paying debts (in this case a lease) is punishable under the Uniform Code of Military Justice.  Now, some commands may be more lenient then others, but it can be an issue for career service members.

I've had clients in the past pay a significant buyout rather then just breaking a lease (even though there was just cause) to avoid any derogatory marks that may affect future promotions.

@kerry, thanks for the response! I was thinking about looking at homes near bases since there should be renters. 

Younger airmen (since I can only speak to the AF) are largely in on-base dormitory style housing, but if they are married or have dependent children there is (often, but not always) the opportunity to live off base.  I added the DoD link so you can determine what the pay is by locality and by rank.  As I said, we look at E-5 and up.  

Our property is currently rented through a property manager, who is familiar with the regulations at our local base/s.  The housing office on the base will want to look over the rental agreement...give them a call if this is a strategy you consider.  They may have an "approved" rental agreement for you to use, that is vetted by their legal department. 

Also, the military member must be able to break a lease in the case of a short or no-notice move, caused by military orders.  

http://www.defensetravel.dod.mil/site/bahCalc.cfm

A number of military personnel have security clearances, and do not want to lose their clearance, and so do not want to risk damage or late pay to the landlord.  All the best~

How is it dealing with a property manager? Do they communicate pretty well or does it depend on the person? What are payments to them usually like? Also, its good to know the base can provide a rental agreement.

They're just like other people and come from all walks of life.

The biggest difference as mentioned above is the ability to break a lease for orders. In general, the steady payments make up for that.

I guess my biggest concern is the younger guys. I just picture a bunch of college kids having parties at the property. Once I get started in REI, I think I'll try to avoid the younger tenants (early twenties) both in the military and in college. Unless something tells me they're a little more responsible.

We are active duty military and have done very well in active duty towns. The biggest issue is we have people using the SCRA to the letter but not the meaning :(

They do have a stable income but they are like anyone else. You need to screen and review. At least 50% of our market is active duty. So feel free to give me a pm if you want to talk. I can connect you to some articles I have written on this subject. 

Good luck

Originally posted by @Matt Holmer :

Not paying debts (in this case a lease) is punishable under the Uniform Code of Military Justice.  Now, some commands may be more lenient then others, but it can be an issue for career service members.

I've had clients in the past pay a significant buyout rather then just breaking a lease (even though there was just cause) to avoid any derogatory marks that may affect future promotions.

 When you say just cause what do you mean? It would only take a small spec of just cause to protect them from any sort of UCMJ punishment. You'd pretty much have to prove that they blew all their money on coke and hookers before you could ever hook them under that article. Not to mention how easy it is to fake orders in order to use the SCRA(it seriously only takes 5 mins to fake the paperwork). Breaking a lease also isn't going to have anything to do with whether they get promoted or not. If it ever got serious enough for them to deny a promotion, it's cause they are getting kicked out. With that said, a simple email to their first sergeant will take care of any issue 9/10 times(for the AF anyways). Whether it's official punishment or not, they'll get their fair share if it's a decent first sergeant.

To the OP, let me put it this way, some military members may very well fall into the same category as college kids, no doubt. Those people are few and far between though. Your average dirt bag military guy is still going to be better than a normal college kid.

Kerry you may want to be careful what you post. You just admitted that you discriminate for housing which is breaking federal law. Lincoln Military housing is currently caught up in litigation for this exact same thing.

Please explain what you are referring to?  All of my properties are managed by licensed PMs and are very well NOT discriminating on any basis whatsoever.

Really, Shawn?  After looking up "Lincoln Military housing litigation" I come up with a situation where a contractor under obligation to provide base housing on behalf of the Navy is in the courts because of "personal injuries and property damage" from MOLD.  How exactly is that related to an individual who buys single family houses in communities near by military bases and rents them to the population at large, some of whom happen to be employed by the military?  

Would it be discrimination if its based off of income, similar to what banks do when they ask for your income during an application? I just ask as I do not know the legalities when it comes to renting to tenants. 

If I were you I would stay away from anyone below the rank of E-5, maybe unless they are married or are more responsible individuals. But speaking from experience, I have had a lot of friends while I was in the military who were younger and rented houses together. Some were respectful but I also had a lot of friend who would get 3-4 guys together and rent a house off-post and it was like animal house. Parties all the time, fights, crazy stuff, you name it. But with the military, it's very easy to look up pay-scales and BAH calculators so you know who is making what. Also as stated before, it is very steady, you know they will get paid every 2 weeks, so as long as you have the right tenants you know you will get paid. Another thing I would ensure is that the service member is not separating from the military before the lease is up.     

I rent to military, live near a LARGE military base, and I'm a veteran. 

I will agree with @Matt Irvin that it's scary to rent to these kids. I know exactly how being a young military renter is, and I was a bad tenant and as a landlord I wouldn't have wanted to rent to me! To be fair, I would have been a lousy tenant no matter what my profession. 

That being said, it always comes down to the same thing: tenant screening. What should also put you at ease is that most single military guys don't get off-post housing allowance (or even privilege at my base) until they are E-5. Not saying they can't be bad tenants, but it's less likely. I will continue to rent to military tenants, and I would recommend you don't worry about them any more than tenants with other professions. Just screen them properly and move forward. 

In my rental areas, military service is not a protected class. Property owners/managers are subject to the Federal Fair Housing Act, which prohibits "any preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or intention to make such preference, limitation or discrimination."

These are examples of tenant screening:

Landlords must verify tenants' income

Often a credit report is pulled, as well as a background check.

Ask if they’ve had any evictions.

We want to check references and hold all applicants to the same set of standards.  We don't seek to rent *only* to military folks, or any other group. 

As a prior enlisted member and current officer in the military I can say that military service does not mean responsible. A majority of Active Duty Sailors, Airmen, Marines and Soldiers are someo f the most high quality people in our society. At work they excel, but unfortunately at home many have the same issues as the general populace, over extending themselves wihtt heir money, alcohol, and inconsiderate.

Renting to E-5 and above is a good rule of thumb. These people have a few years to mature, have been given responsibility, developed, proven themselves and have a lot to loose. An E-4 and below sometimes has not had enough time to grow up. Like I said, most are great, but some will be some of the most inconsiderate you could find.

I say this as a former E-3, E-4, and E-5 that had a hard time renting at some of my ealry duty stations. But you must settle and buld credibility just as the rest of society. Do your back gorund checks, credit checks, Look at their pay online and ensure that they can reasonably afford to stay in your property (around 30% of your income shoud go to housing)

Here are some websites to help calculate the majority of an Military member's pay:

for Cost of living allowance, and overseas COLA (areas like Alaska with abnormally high cost of living), and Basic Allowance for housing (BAH)

http://www.defensetravel.dod.mil/site/bah.cfm

And Base Pay

http://www.dfas.mil/militarymembers/payentitlements/military-pay-charts.html

I will say this! I rent to military because we are military and I am a huge believer in taking care of my own! I have also had some amazing tenants ...... And I've had some not so great one.

I am deifnitly not on the "I only rent to military" bandwagon because honestly my civilian have been a lot easier and less stress! That being said, I treat everyone the same. I rent to those salaries greater than 3x rent, background and credit check. I do ask for orders and make sure there going to be around as long as their contract. I don't let propel sign leases long then their around or past a deploy date (those happen often)

I will say because of scra abuse I am not a believer in long leases AND I don't give direct deposit, military discounts etc. I treat everyone fairly the same and follow fair housing. Always!

@ Joel W. 

Thanks for sharing that Joel. I agree 100% with a background check no matter who the individual is. Any landlord should be fully aware who they're leasing to no matter what occupation/salary. I don't speak from experience as a landlord but I do speak from being a young tenant once upon a time. You just have to be aware of the risk associated with renting to 21 yr olds whether its on a college campus or near a military base.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here