Question: Has anyone else had significant problems with military tenants?
The story: First off, I am as red blooded as one can get, I love my country and my military. I served ten years in the Army, during which I spent 3 years deployed and was medically discharged in 2010. When I was exiting the military, I was also dating a wonderful woman.
She and I decided to start a family, and the house that i purchased before we were married (3 bedroom, 2 bath, SFR) was no longer sufficient when we were ready with child number 3! So, we went through the very fun/stressful times of getting another loan approval for a larger house under my VA loan (yes, you can buy more than one home with your VA). So, we purchased a 4 bedroom, 3 bath SFR with about 1300 more square feet and some acreage. How did we do this with a home we already owned? Of course, we had to rent it out! So, we listed it (our real estate agent listed it) and within days we had multiple offers.
We were going to manage this property ourselves and selected a military tenant. He didn't have the best credit, but for his pay grade and the cost of living around the base (this is San Antonio, TX), the numbers matched, so we went ahead and signed a lease with him. He paid the security deposit, pet deposit, and the first months rent right there on the spot, so everything seemed like it was working out.
We started the lease in November 2012, which was stressful enough, however, the lease took us through December 2013 so we figured this was no big deal. We would renew the lease and there wouldn't be any problems. The house was built in 2009 and there were no deficiencies noted to we were all in at this point. So....after my recent research on BiggerPockets, I've seen the error of my ways! I have nothing but love for our military, but when my military tenant uses the military as his excuse for missing his rent payments, I started to worry. I served myself, and I know that since 2001 I was paid on the 1st and 15th every month without any problems for ten years.
**This was/is our first rental by the way**
Our military tenant was sometimes 3, 5 14 days late with his rent payment. Some months we showed empathy for him, and didn't charge late payments. This allowed for more late rent payments, without any notice. We called him, sent letters, texted, emailed, tried every means of communication we could. We told him that we just needed to hear from him, let us know what was going on and we would support him, and rarely (or never) got a response until he paid. Then, he would send a small text saying something like "sorry, military paid late this month". He would blame it on Congress, Obama, etc. Don't get me wrong, I do NOT like Obama, and would like nothing more than to blame every problem I have or had on the Regime. However, this was not the case, I am a Federal employee, and know that no matter what, Congress would pay our military before paying us, so no way did they screw up their pay. That stuff would make the news anyways.
Regardless,. it was a bad situation, so come November, we sent a letter notifying him that we would NOT be renewing his lease. He and his new fiance (nope, he didn't provide her information) didn't protest, they moved out. We had about 14 days to get the house rent ready. This time, we hired a property manager in the area that was/is actually pretty easy to work with. We aren't making any money, but, we aren't dealing with a bad tenant now either. We thought this would be easy, lets get the make ready knocked out and get a tenant.
Well, the first time we walked the property after this guy left was with our new property manager. We walked in the door and were blown away with the number of little pin holes in the walls. We had to spend 2 days patching tiny holes, then painted the whole house. After that, we had to replace the master bedroom door (which he or someone punched a hole through). We had the carpets shampooed twice, cut the grass and found a year's worth of dog poop and cigarette butts, and scrubbed the garage so it didn't smell like smoke. All in all, this was exhausting, and a very good lesson for us!
This experience actually pushed me to start researching property management and real estate investing (and those AWESOME podcasts). I know we made pretty much every mistake in the book here, and we learned from it. This hasn't deterred us from renting to military, we want to acquire more properties in the area and provide great homes for our service men and women to live in while they serve in San Antonio. This experience however, has taught us MANY valuable lessons in renting/leasing.
The most important factor here is, yes, we love our military, but, remember, they are people just like anyone else. They get paid housing allowances. Know the going rate for your area, and build a relationship with the base/post housing office. They can tell you whether or not military got paid. Also, they can be a pretty good resource when looking to invest outside a military installation. Many soldiers/sailors/airmen look to the housing office for available housing off-post.
Sorry for the long drawn out email, but back to the original topic/question: Has anyone else had significant problems with military tenants? And, how did you deal with those problems?
