that’s why its contrarian. some people think that war will be swift, sort of like the gulf war. If the price is cheap enough, and you have pockets deep enough, and the guts to go against conventional wisdom then you might make out.
you buy cheap enough, undercut other landlords rent, even renting at negative cash flow for the short term,
UNTIL, and that’s a big until, the tide turns.
I’m not recommending, or even saying that that’s what will happen, I’m only saying that some contrarians might think that way.
I’ve always heard that REI in military towns was pretty good w/ the steady turnover of personnel many times becoming motivated sellers.
But, I was reading a story online a few days about the Ft Bragg area (NC), that said that w/ all the recent deployments, the area is already feeling the effects of lost business (local merchants sales down). We kinda figured that would have a negative effect on the local economy as a whole including RE.
Then I got to thinking what about investors renting to soldiers. Do they still get paid even if the soldier is deployed? If yes, for how long? If, no I would think that would lead to a SERIOUS cash crunch for the investor.
Would like to hear thoughts on this from investors in military towns as well as others.
Posted by Rich[FL] on February 18, 2003 at 16:43:24:
Hmmm, I may have to look into this more closely. I was always under the impression (after 23 years of service) that the military people can claim relief under the Soldiers and Sailors relief act ONLY when they have a PERMENANT CHANGE OF STATION (move from one permanent job location to another); a deployment is not a permanent change. They will still be required to perform on their obligations. I’ll have to ask our local JAG for clarification, especially since I’ll probably be renting to more military people later myself. I’ll try to remember to reply here with what I find out.
deployments are bad news for rental owners. Most military people demand that a “military clause” be put in their lease. I believe that they are instructed on this by the military. They require exact and specific wording that essentially says that “anytime” that they get orders to leave, the lease is voided with out penalty. The owner can not keep their security deposit for breaking the lease.
At a particular base that I’m familar with, the CO decided that the gate nearest the town would not be opened at lunch time. The lunch trade dried up as nobady was willing to drive the extra time/miles to get to town for lunch. Other businesses were also affected including gas stations, car wash, grocery stores, etc. The business owners met with the CO and asked, no pleaded that the gate be reopened. The official line was that it was closed initially as a cost cutting measure. The gate was reopened.
IMHO it would be a contrarian view to buy rentals in a military town at the BEGINNING of deployments.
Re: Military Towns & The War - Posted by Frank Chin
Posted by Frank Chin on February 17, 2003 at 08:47:43:
There was a big uproar in the local papers here in NYC regarding a major landlord whose rental policy includes NOT renting to military people citing the “Soldiers and Sailors’ Act of 1875” as I recall. The paper mentioned that the landlord cannot collect the rent when the soldier or sailor is on active duty, and can cancel the lease at will, under the law.
The owner apparently instructed his property managers via a memo, not too smart.
Some small landlord of a 3 family can be stuck if he’s got such a tenant, and may have to file bankruptcy if he’s counting on the rent to pay the mortgage.
> IMHO it would be a contrarian view to buy rentals in a military town at the BEGINNING of deployments.
Is the contrarian betting that he will be able to buy a lot of properties cheap when the soldiers leave? How is he going to hold on to them until vacancies come back to normal (deployment ends)? Having bought a bevy of rentals cheap during said downturn, how can he protect himself from the next one?