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Author Topic: First furnished rental... how to handle?  (Read 13587 times)

Offline justin0419

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Re: First furnished rental... how to handle?
« Reply #30 on: July 14, 2013, 07:22:28 pm »
I just thought of another key aspect of the military housing issue.  On base, the rent amount for the military member is exactly what their BAH rate is.  This means you'll likely have a married E-3 living in the same type of house that a married E-6 lives in.  They do sometimes have bigger and better houses based on certain ranks.  A lot of times the Navy will make the designation E-7 and above meaning E-7/8/9 and all officers can live in that type of house.  The BAH amount generally goes up with an increase in rank, but the on base housing will automatically take that pay increase (they consider it a rent increase).  So the service member living on base will never see that part of the pay increase for going up in rank.  When you're at a lower rank, base housing can be a really good deal financially.  After you rise up the ranks...not so much. 

Many military housing has been privatized over the last several years.  This has brought on many changes to the system.  Used to be that only married active duty service members (or single parents with kids) could live in base housing.  Sometimes you had to have a certain number of kids to qualify for certain houses.  With the privatizing of housing, the property management companies are given much more latitude of who they can rent to in order to keep occupancy up.  At my local base, they just opened it up to regular civilians too.  So now because vacancy has risen to a certain level, the property management company can let anyone on the base they want to rent to.  The applicants are supposed to pass background checks, but now we'll have regular people going around our base.  Not the wisest idea, but I digress....  Our base housing is even starting to charge for utilities if they go above a certain usage level.  Base housing used to mean utilities were included no matter how much you used.  It still incentivizes people to save energy, but it's just another way base housing isn't as good of a financial deal as it used to be.

That's also why we bought 30 acres of land to build houses on.  I'm betting all these changes are going to continue the decline in base housing occupancy.  Most of our houses for officers are around 1200-1500 sqft and only have a one car carport.  We're planning on building 1200-1800 sqft homes with two car garages.  I've run the numbers and I think we can do it and actually charge less rent than what most of the officers would give up in BAH per month to live on base.  No, utilities and yard work wouldn't be included, but the houses would be nicer and bigger.

Hopefully this gives a little more insight into how the system works.
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Offline furnishedowner

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Re: First furnished rental... how to handle?
« Reply #31 on: July 15, 2013, 11:51:58 am »
justino419,
Very interesting that you are planning on building private military housing. Providing that base doesn't get shut down right away, those homes should generate rent for years and run problem-free.  I think it is a great plan.

I know in Clovis, New Mexico there is a real housing shortage due to the air base. Rents are much higher than the local economy would warrant without the air base.


Furnishedowner

Offline AlexMiller

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Re: First furnished rental... how to handle?
« Reply #32 on: August 05, 2013, 06:07:00 am »
Amazingly informative information! Thanks.

 




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