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Looking back at my family’s rental home history, I realized we’ve never rented a home from a local homeowner. They’ve always been long-distance and, except for one, all military landlords. I’ve given this some thought and wondered why we hadn’t had the typical landlord experience with the twice-yearly meetings and the occasional inspection requested.
Likely, it’s because I’m picky about where we live, and savvy military homeowners capitalize on ideal but military saturated locations. They, however, are stationed somewhere typically far away and don’t have the time or money to make the trips to check on the property on multiple occasions. Whether good or bad, I also believe there’s an element of trust between military members. Military landlords have unwritten expectations from military renters.
There are various reasons military homeowners become landlords: some plan to become long-distance landlords, while others are dealt with circumstances beyond their control and inadvertently become long-distance landlords. Either way, rental property owners should determine the advantages of hiring a property manager while they’re away.
Intentional Long Distance Landlords
Military members benefit from many PCS moves to understand real estate at each duty station. If landlording is their "thing," then previous geographical knowledge of multiple locations courtesy of the U.S. government puts them in a better position to become a long-distance landlord simply by absorbing and understanding their daily lives.
- "Oh, this elementary school is highly rated, so the rent I can collect for this potential neighborhood will be higher."
- "The area right off base is perfect for single soldiers who want an apartment to share with roommates."
- "The location of this train stop is very central. Renters will pay more for convenience."
The two to three years stationed at any base also allow a military homeowner or renter the time to become familiar with contractors, plumbers, handypersons, and even property managers if they are considering becoming a landlord in the future. It’s almost like the government is paying you to do real estate research for a few years to enable successful transactions in the future!
With proper preparation, these "trial run" situations can be invaluable for potentially beginning a real estate empire as duty calls from base to base or state to state. However, there are many circumstances when military homeowners become the opposite of intentional landlords.
Keep your landlord/tenant relationship solid with Communication Solutions for Landlords and Tenants.
Accidental Long Distance Landlords
The military hands everyone an unwanted or unexpected experience at least a time or two during their careers. This can be exceptionally complicated for homeowners moving far from their current home, raising the question, "What do I do with this house if I can’t or don’t want to sell it?"
There are typically four scenarios that accidental long distance military landlords find themselves:
- Deployment or PCS orders have arrived quickly and left little time for a selling strategy.
- The new duty station boss awaits your presence ASAP, but the house isn’t selling.
- Failed inspections or appraisals set time frames askew.
- Homes purchased pre-recession may have diminished profit potential.
Get more tips and advice in A Guide for the Unexpected Military Landlord.
Hiring a Property Manager: Pros and Cons
Whether they’re intentional or accidental, military landlords have to determine if hiring a property manager is worth their time and money. Landlord/tenant relationships can be tricky, but add in an unexpected deployment on behalf of the homeowner, and the partnership can fall apart if repairs are neglected.
On the other hand, why would a landlord give someone else their hard-earned money if they’re able to handle the common rental house problems themselves or through a network of trusted vendors?
Here’s a look at the pros and cons that you may deal with when deciding whether or not to hire a property manager.
Pro #1: Time Saver
Property management is their single job. It’s what they get paid to do, unlike the rest of us with day jobs and a landlord hobby on the weekends. Professional and competent managers should have zero problems solving everyday issues quickly.
Consider this: By the time an East Coast renter waits for their West Coast landlord to wake at a reasonable time, hours have gone by in the rental where the problem is getting worse, or repair appointments are booked. Local property managers would have called a plumber and had the clogged toilet solved before the sun rose in California.
Pro #2: Money Saver
On the surface, it doesn’t seem like it would be cost-effective to hire a property manager. Not only are you spending money on home repairs and upkeep, but professional management companies require a percentage of rent or commission payment. But what happens if the landlord’s crazy schedule doesn’t allow for the necessary inspections or seasonal home maintenance?
The answer, of course, is additional problems! Problems that will likely require even more money than the monthly property management payment would have been initially. Professional management companies have detailed maintenance schedules throughout the year. Heating and air vent cleaning, chimney inspections, and pest control are just the tip of the home care iceberg.
Con #1: Property Management Doesn't Mean Worry Free
Patience makes perfect. Finding a competent property manager can be challenging. The research process is a little like dating or finding the perfect nanny for your child. At a basic level, managers must be effective communicators, savvy with technology, and demonstrate creativity for executing solutions quickly. Your landlord style has to mesh with the property manager to make the relationship smooth and beneficial for both parties.
Keeping a competent manager is just as challenging. Another round of the hiring process will take time, and there will probably be an experience or two when firing the management company is necessary. Then, you’ll have to restart the time-consuming research process and interview new prospects again.
Con #2: Complacency
Years may go by without a hitch in the homeowner/property manager relationship, but this doesn’t mean complacency should set in. As the homeowner, it’s ultimately your responsibility to set eyes on your property and inquire about tenants, lease terms, and contract changes with the management company.
Assuming all is well is not a guarantee the property manager isn’t coasting on their good reputation. Lack of communication on either party’s part is asking for expensive disappointments in multiple forms. Hiring someone to handle your property is often a wise choice; checking out the entire operation and expecting no issues is not.
MilitaryByOwner can help with your rental property needs! You’ll find articles, blog posts, and legal forms concerning all points of the process. Start below with our free resource for military landlords!
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