Townhhouses as Rentals????

We don't have many HOA properties around us so we don't have to worry about it. Run your numbers on the deals. HOA isn't something I would mess with unless it was a great deal in a great area. I've read where the association will pass spending bills faster than congress for roofs and parking lot paving and other things and you are relatively defensless against it. Talk to some of the owners involved and see how the like the HOA.

We have non-HOA townhouses. They are great rentals, with excellent cashflow. Those HOA fees could eat up all your profit though. What area of the country are these in?

People in general are aware of HOA fees and don't forget rules. For the most part they know what they cover and are OK with it. It buying and selling in the condo or town-home market is very iffy to say the least.

You really want your Realtor to check the comparables for days on market. This will give you a good idea how hard they are to sell. Renting them out is generally not a problem but remember to figure that in when setting the rent. To get a good idea on rent go to www.rentometer.com.

Randy Bailiff
Official Dean Graziosi Real Estate Investment Coach

I have a rental property (condo)with HOA fees... last year one of the owners carried a large Christmas tree in the elevator and some twigs fell and got stuck in the mechanical; after several unsuccessful repair attempts, it was concluded that a new elevator was needed, and since there were not enough funds in the reserve account to cover that expense, the issue was brought to a vote; everyone had to pay $5000 towards the new elevator, plus the HOA fees were increased by $50/month over a two year span to build up the HOA cash reserve!

Also, if you are delinquent on the HOA fees, the HOA can and will put a lien on the property!

Valerie

Hi Terry,

HOA's can be good things and they can be bad things especially when it comes to condos. You should always touch base with the upper-most official of the HOA before you decide to buy. This is usually the President, and you can get that contact information from your Realtor.

I was recently able to lock up, under assignment contract, a beautiful 2/2 condo in a very nice neighborhood at a great discount of 34% below FMV. The owners were desperate to sell it. There was absolutely no rehabing to be done as it was in perfect condition and ready to sell/rent. But upon speaking with the President of the HOA, I found that there was a cap on how many of the condos that could be rented >(25%)< as per the HOA rules and that that limit was already reached. This meant that the condo was not going to be able to be an investment property to gain cash-flow by renting.

Because of this one thing, I therefore had to let it drop with no possibility of selling it. Also, check out what the HOA fees cover before you buy. This condo had a high fee at $135 dollars per month. But with speaking to the President, I found that this fee also covered the water bills for the unit.

Theo T.
CogniWorld-LV

P.S. Terry, you should really try to find the time to fill out your profile in your account area. It allows your DG family members to know you better. And welcome to our family, Terry.