If you are a landlord or renter involved with military service members, it’s essential to understand the unique housing challenges and opportunities they face. Frequent relocations impact military rental properties and real estate markets significantly. This article provides crucial insights on military tenants, the benefits of homeownership for service members, and how military personnel can successfully transition into landlords to manage their properties effectively from a distance.
Those in our armed forces move on average every 2-3 years — 10 times more than the non-military population. Outside of military housing, with so many military service members on the move and with such frequency it impacts both the rental and real estate markets.
Military personnel may be renters, homeowners, or landlords themselves and in whichever role, come with some unique challenges and considerations.
Service Members as Tenants
If you’ve never had the privilege of renting to military tenants, there are a few things that landlords should know.
Military service members have steady incomes and are often given a housing subsidy called Basic Allowance for Housing (BAH). When verifying income for a military applicant, ask for their Leave and Earnings Statement (LES) which will show their BAH housing allowance. The allowance is in addition to their base pay so be sure to take that into consideration when calculating their eligibility based on income. As a landlord, if you haven’t received the Leave and Earnings Statement showing the allowance, you might be able to get an idea of what they received using a BAH calculator online if you know their pay grade.
TIP for Landlords – If your rental is near a military base and you want to attract military servicemembers and their families as tenants, you may want to consider:
Marketing the distance from the rental to the base in your rental listing
Offering partial or fully-furnished rentals
Make appliances available, such as refrigerators, washers & dryers
Although their income is steady, their jobs are transient. To get an inkling of the lifecycle of their tenancy, you could ask them for a copy of their official orders. It will indicate how much time they have to move and their Projected Rotation Date (PRD). It’s an expected date, but not set in stone. It may be best to set a lease term that falls within these dates.
However, even with a longer lease, unlike the civilian population, the military can not be penalized for breaking a lease when given orders to move. For this reason, landlords should become familiar with the Servicemembers Civil Relief Act (SCRA) which is a federal law that allows military personnel and their families to terminate a lease without penalty under certain conditions:
The deployment is longer than 90 days
They have been given an official military order called a Permanent Change of Station (PCS)
You should expect your tenant to give you a written intent to move notice and a copy of the PCS or deployment order.
The official website of the United States government has more information regarding the benefits and protections of the SCRA here: The Servicemembers Civil Relief Act (SCRA)
Military Homeowners
According to an impact study conducted by the Urban Institute, 42.7% of servicemembers forgo renting for homeownership. It also underscored that active duty military has a higher median household income in comparison to non-military and the total population at large making homeownership more financially attainable.
You can read the entire research report here: The Impacts of US Military on Homeownership and Income
In addition to a higher income level, there are many government and financial services and programs dedicated to helping service members become homeowners.
But what happens to that home when they get their next deployment or moving order? Only one of two things:
They sell the home, or
They become landlords
TIP for Real Estate Purchases – When shopping for a home to purchase, check near military bases. Depending on the area and circumstance, if a service member needs to sell quickly, the home may be priced lower than the market price for a quick sale.
Landlords in the Military
It might benefit a military homeowner to keep their investment and turn it into a rental. Being a long-distance landlord these days is simple with easy-to-use tools like robust property management software. From eSignatures for leases, online rent payments, and handy tenant portals, service members can manage their rental property from just about anywhere. There is also the option of hiring a property manager or finding a property management company to manage the rental.
Military Landlord Resources:
7 Online Tools for Managing Your Rental Properties Remotely
Top Tips for Getting Started as a New Landlord or Investor
Military on the Move
If are a service member with moving or deployment orders and are looking to rent or purchase a home, here are a few resources that might prove helpful:
Our service members in the military are in a unique position as they consider their housing options. Choosing to rent to those in the military comes with the inherent risk that they may have to leave before the lease has expired. But on the flip side, landlords can benefit from the security of their steady source of income.
For those in the military, homeownership has never been easier with specialty loans and government resources. From there, you’ll have the option to sell or become a landlord yourself. Whether you choose to sell or turn your investment into a rental property, be sure to check with your base advisors and local experts to get the most out of your investment.
