For landlords across the nation, bad tenants are a constant worry. Especially after COVID-19, when many landlords were forced to go months without payment, having tenants with a reliable stream of income is paramount. As it turns out, renting to military tenants may be one of the best business decisions a landlord or property owner can make!
We’ve done the research about renting to military personnel, and the evidence is compelling! Here are the top five reasons why renting to military families can be a tremendous financial victory for landlords or property owners.
Reasons You Should Be Renting to Military Families
1. You’re in a Low Populated Area
Managing rental properties can be a challenge, especially if the community your rental is in doesn’t have a high volume of possible renters. In areas where reliable tenants are far and in between, such as in a college town or major city, landlords could greatly benefit from renting to military families.
Fortunately, many military installations are located in rural towns or less populated areas. These military bases can bring in thousands of transferring military families a year who are in need of off-base housing for spans of 1-4 years at a time.
2. Military Members Receive BAH
Did you know that active military members receive a monthly Basic Allowance for Housing (BAH)? These funds are distributed to cover the majority of the cost of living for off-base housing for PCSing military personnel. So, unless the military member in question transitions out of the service or is discharged, they have a guaranteed source of income intended to cover their rent payment.
3. Military Personnel Make Great Tenants
The quality of the tenant you choose to rent to can make or break the success of a rental property. As you probably know, choosing the wrong renter could actually cost you money over the course of a lease. Especially since it is growing increasingly difficult to kick out a bad tenant, it’s essential to make the right choice the first time.
Traits of a Good Tenant:
- Steady income and security deposit to cover potential damage
- Good references from previous landlords
- Solid record of following rental policies
- A favorable credit report with a history of on-time payments
- Polite and respectful communication skills
As military members can get into trouble for not upholding the military’s standards when it comes to renting, leasing to military families is an easy decision for many landlords. As a further perk, outgoing military members giving you an excellent reference to incoming military families in this niche market is a priceless perk!
With the Department of Defense’s 1.4+ million personnel and their families living off-base, this opportunity is one that many landlords should jump on!
Pro Tip: Be sure to check out 5 Tips For Better iPhone Real Estate Photos to help you create the perfect rental listing.
4. You Screen Your Tenants
You’re in business to make money and you do the work necessary to find reliable tenants. Lucky for you, the military makes the rental screening process quite easy for landlords! Any federal employee, including the DoD, has passed a background check.
Moreover, the military makes it easy to conduct income verification as each military member PCSing to the area receives Basic Housing Allowance (BAH) each month. Check out the top ways the military helps landlords feel confident about renting to military personnel and their families:
Remember, all PCSing military members should have a designated income for rent since the military pays them a BAH to live in the areas surrounding the base. As such, landlords can use the 30% rule to determine if applying military tenants can afford to live in the property based on their BAH rate.
It’s commonly recommended, for both military personnel and civilians, for rent to not exceed 30% of the tenant’s total income. For example, $1,500 rent should be a good fit for a tenant grossing at least $4,500 a month. A rent-to-income ratio calculation can help you eliminate unqualified applicants before you go through a comprehensive screening process.
It’s important to note that military members will often choose to rent a home that exceeds the amount of their BAH, with the intent of paying the difference out of their own pockets. This is a wonderful and reliable way for military families to enjoy better housing options while still using their BAH entitlements. In these cases, you can ask for proof of income in addition to their BAH details to ensure they are in a good place to pay rent consistently.
All active service members have a steady income from the federal government. In addition, it is within the landlord’s rights to contact the local installment’s Military Housing Office to confirm a military member’s BAH rate and employment status. For these reasons, and many more, landlords enjoy the peace of mind that comes with renting to military families.
Ensuring that you can trust the tenants inhabiting your property is crucial. After all, you don’t want to spend the next 1-4 years worrying about when you’ll receive a rent check or if your property is in good hands!
Background checks help property owners steer clear of problem renters, and landlords can usually pass this cost on to the renters interested in applying. However, when it comes to renting to military personnel, you don’t have to conduct your own background check. This is because all federal employees go through a basic background check to make sure they are reliable, trustworthy, and suitable for the job.
Furthermore, many service members pass rigorous background checks to gain security clearances. So, if they passed a background check for the military, it is likely they would pass a background check to qualify as a renter!
5. You’re Supporting Those Who Protect You
As General Douglas MacArthur once said, “No man is entitled to the blessings of freedom unless he be vigilant in its preservation.” To show their support for our service members, many landlords choose to rent to military families. It’s their way of showing appreciation to those who protect our country.
Although patriotism shouldn’t be the only reason you choose to rent to military families, it is certainly a commendable route to take.
Get Started with AHRN
Don’t just take our word about the benefits of renting to military personnel. Take it from someone who has grown their business from it! Josh Roy, a real estate broker and property owner through NextHome Pikes Peak Realty in Colorado Springs, CO, near Fort Carson testified:
“We chose to work with AHRN to help those who serve, or have served, in our country’s armed forces. So far, it’s been great! We’ve been able to target the military audience directly through AHRN, and supporting service members and their families through our own work has proven very successful for our business. If you’re considering AHRN, do it – it’s worth your while,”
Are you on board to rent to the military community but wondering what happens if they suddenly are deployed and have to break their lease? Ease your concerns by reading What to Do When Your Tenant Has Military Orders to Break Lease? You’ll learn all about the Servicemembers Civil Relief Act, also known as SCRA, laws and how to protect yourself.
If you’re serious about occupying your listing or growing your military marketing program, begin renting to military personnel! You can also become an AHRN-Certified Military Agent to receive real-time inbound leads from our military audience, plus real estate agent marketing resources.
More Like This: Need a Competitive Edge? Be an AHRN Military Relocation Professional.