26 Nov Real Estate Q&A: Military Personnel as Tenants
Happy Thanksgiving everyone! I hope you’ve been enjoying my new real estate vlog. I love teaching through the spoken word as well as the written word. If you’ve missed out on the real estate series, check that out here. But today, we’re going to break from the normal schedule with some Q&A time!
Hey thanks for watching the vlog! Every week we have some that are blogs and some that are vlogs. I really appreciate you tuning into wealthbuilders.org. Today, I have some questions from people who have written in, actually quite a few questions. If you have questions regarding real estate, business, finance, investing or leadership, make sure you send those into us. You can do that in the comment section.
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The first question I have is from Helen. She says:
I own rentals near a military site that have been very beneficial to me for a couple reasons.
First, the military has a website for personnel to find housing where they are stationed. Only military personnel are able to access the site, and it is free to the Landlord.
Second, military personnel make great renters. In their application, I require the contact for their first sergeant. They are never late on rent, because if a Landlord calls it is automatic finance school. None of them want to give up their weekend for that!
Would you see this as a fair substitute for a background check?
And the answer is absolutely. There’s no question that this is actually better than a background check because you almost have a guarantee of collecting rent. And if for some reason they are late, you have an automatic recourse, which of course, they are in the military and have to report to finance school.
Let me just say this. For most people, you want to remember that you should get background checks. When someone fills out a rental application, you want to make sure you’re finding out what their credit score is. Even if someone has a low credit score, it doesn’t automatically mean you don’t want to rent to them. It means you want to check out why it’s low. And if it had to do with something around their housing or something with how they manage their consumer debt, then you probably want to slow down a bit.
But sometimes people have a low credit score because of medical bills and other things that have occurred. You want to make sure you look into their background. Another way to check is to ask them for their last three utility bills. Typically, people who pay their utilities on time, pay their rent on time. It’s just one of those nuances, one of the little secrets.
Once you do the credit check, you can also get a criminal check done as well. One of the things you need to watch out for in this day and age is people using your house or property to make methamphetamine. Sometimes they can actually just be drug outposts. I’ve seen this happen in middle to upper class properties. It’s not just in low class properties where you have drug problems.
One of the secrets is to go see where that person lives now. If someone’s coming from out of state, you should ask for a reference from their landlord and call that landlord and find out. If they’re living in the area, and looking to change, I would call the landlord as well as see where they live.
How do you do that? I actually take an application or, if they’ve already filled it out, a lease for them to sign. I knock on their door without them knowing that I’m coming. I do that because I want to see how the house is kept. I always smell, listen and look in order to make sure that I’m getting an authentic reading on that potential tenant.
So if you’re renting property and do these three things—credit check, criminal check and see where they live—those thing will keep you out of trouble. This military question is a great question. I encourage you to make sure you have those three things in place.
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