While HOA communities can offer value to their residents, they also come with some well-known drawbacks. Before you buy a rental property in an HOA community, learn what to expect from the experience. Then, you can decide whether this real estate investment is right for you.
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The Pros
You might not have considered all of the advantages of owning a rental property in an HOA community. Since many of these benefits involve services provided in exchange for your HOA dues, charging your tenants a little extra to cover these dues will help you maximize your benefits.
Property Management in San Diego Can Be Easier with an HOA
The HOA typically takes on the responsibility of maintaining common areas. Depending on the community, the HOA might hire private security guards, repair sidewalks, or even provide lawn care services. You’ll avoid having to take on these responsibilities yourself, and your tenants can live in a well-maintained neighborhood.
You’ll Have Support in Resolving Community Issues
If your tenant complains about a neighbor or has a problem with community amenities, you’ll have the HOA’s support. Rather than having to handle the issue yourself, leave it in the HOA’s hands. Often, they can settle an issue faster and more amicably.
You Can Offer Better Amenities to Prospective Tenants
Many HOAs offer community amenities, with access included in the monthly fee. Your access to those amenities will extend to your tenants. You’ll attract a broader range of prospective tenants when you can offer them access to a swimming pool, gym, or community playground.
You Can Attract a Better Type of Tenant
It can be a challenge to find a tenant with a good rental history and a high credit score. However, you can use the reputation of the HOA to attract better applicants who meet your standards.
Mention that the property is in an HOA community and point out special features, such as security, community amenities, and premium maintenance, to attract more worthwhile tenants.
The Cons
It’s equally important to consider the disadvantages of owning rental property in an HOA community. Some of these restrictions can limit property management in San Diego, so learn about the HOA’s rules before committing to buy property in the community.
There May Be Restrictions on Renting to Tenants
Before you buy property in an HOA community that you intend to use as a rental property, make sure to inquire about restrictions. Some HOA’s have restrictions on how long you can rent the property. For example, many HOA’s limit rental periods to a minimum of 30 days, or 90 days and some have a limit of 6 months. It is common for HOA’s to disallow short term vacation rentals in San Diego of less than 30 days.
Your Tenant Will Have to Comply with HOA Restrictions
Both you and your tenant will have to follow HOA rules while using and maintaining the property. For instance, there might be restrictions regarding the type of fence you can put up around your property. Your tenant may not be able to keep certain types of pets. If you or your tenant violate these terms, you might have to pay hefty fines.
You’ll Be Responsible for Your Tenant’s Actions
If your tenant becomes a nuisance or violates community restrictions, the HOA will bring those problems to you. Since you own the property, you take on the responsibility for your tenant. This could leave you facing fines or a possible foreclosure, depending on the specific details of the violation and how long it goes on.
You’ll Be Responsible for Updating Your Property
If the HOA determines there is a problem with your property, you may have to make renovations or changes to remain compliant. This can include removing an upturned tree or changing the color of your property’s exterior trim. In most cases, the HOA will give you a deadline for making these changes before they take action against you.
Combine Property Management Services with an HOA
While buying a rental property in an HOA will relieve some of the burdens of keeping the property in good condition, there are still many reasons to look into professional property management in San Diego.
A property manager will free up more of your time by dealing with your tenants for you. Together, these services will help you get more enjoyment out of your investment property.