Investing in Military Housing

Investing in military housing can be a great strategy, whether you’re new to investing in rental property or have some experience under your belt. Even though it does have a few negative aspects to consider, there are several reasons why you should at least think about it if there is a military community relatively close by.

Let’s start by talking about several advantages of investing in military housing.

Advantages Investing in military housing

Advantage #1: Steady Paycheck

Federal employees have perhaps the best source of payroll available. Unlike a company, the U.S. government isn’t likely to shut down anytime soon. As a landlord, the consistency of your tenant’s paycheck is probably important to you, right? After all, if your tenant is laid off (which rarely happens to military,) they can’t pay rent.

Advantage #2: Good Pay

Military employees are paid fairly well. They aren’t exactly bringing in the high dollars made by investment bankers, but the government realizes it needs to pay its people fairly. Otherwise, they would lose even more personnel to defense contractors each year.

So why do military choose to rent if they are paid so well? After all, if they can afford to buy, you might argue they’re leaving money on the table. Well it’s largely because…

Advantage #3: Military are Transient

This can also be a disadvantage, as we’ll discuss in a second. But you can also see the fact that military are always coming and going to a community as a good thing.

Because they know they’ll only be there for a few years, most military decide not to purchase their home. Buying a home is a hassle, just like selling the home can be when they move away. That’s why they’re always looking for a good place to rent. In fact, the supply is always so low that a great rental home usually has tenants under contract within days in today’s market.

Advantage #4: The Military Lifestyle

Investing in military housing opens up a window to the military lifestyle. Many people don’t realize that simply being in the armed forces affects every aspect of someone’s life, unlike most civilian jobs.

For example, let’s say your tenant is in the military but doesn’t pay rent on time. You can actually call their organization on base and talk to their commanding officer about it. Chances are good that you’ll get your money soon afterwards! And even if the person is having financial difficulties, the base likely has an organization to lend money to help the person get back on their feet.

So there are a lot of great reasons to rent property to military members… but nothing is perfect, right? Here are a few negatives to think about before pulling the trigger.

Disadvantages Investing in military housing

Disadvantage #1: Military is Transient!

Again, people in the military are constantly on the move. This means you’ll probably be looking for a new tenant every 2-3 years. Even though this gives you a window to raise your rates for the next tenant, it also means you may have vacant periods.

Disadvantage #2: Overseas Deployments

If someone in the military deploys overseas and has to break their lease, you may (depending on the state) be obligated to let them go without any kind of penalties.

Disadvantage #3: You Can’t Judge a Book by its Cover

Just because someone is in the military doesn’t mean they’ll take amazing care of your home. They may still make a mess, so make sure you take a security deposit! They credit may not be good, so a credit check is still a very good idea.

So is investing in military housing worth it? It’s personal preference, similar to any investing strategy. But if you want customers working for a stable employer and a steady stream of new renters, it’s a great opportunity to consider.

About the author

Justin Stowe

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By Justin Stowe

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