I've been following Jeff Opdyke's Love & Money articles in the WSJ....he and his wife were all set for him to take a position with WSJ in Hong Kong. The chance of a lifetime for their family...only problem was getting their current home sold. They tried and tried to get it sold and ran out of options and had to turn the job down....their subdivision did not allow them to rent out their home while they were gone and they could not afford to pay their mortgage and $4,800 rent in Hong Kong,
In last Sunday's article, he outlined what their new plan of attack will be. They are still trying to sell their current home and when they do, they will downsize and purchase in a subdivision/PUD that DOES ALLOW property owners to rent out their homes. They are looking for move flexibility and options with the purchase of their next home.
They are now considering the fact that they can not rent their current home as the SEVERE drawback it is in their particular situation.
This is happening more and more as owners must leave the area and their homes have not sold.
Locally, many HOAs have a limit on the number of rental/investor owned units and this restriction (along with the no real estate signs) will end up lessening the value of the entire subdivision/HOA.
As has been seen in Las Vegas and areas of Florida, as units do not sell, they go vacant and deteriorate. Owners go into foreclosure and when they do, the HOA is stuck for any deliquent fees and costs as the bank is not responsible and rarely pay these fees.
As property managers, we should know our market area and watch out for these problem HOAs/PUDs and steer our investor clients away from purchasing there....NOW, individual homeowners need to pay attention to these restrictions as they restrict a VERY IMPORTANT option if they can not sell their property when they need to.
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
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Wallace, what a shame their home couldn't be rented but another reason to read the POA restrictions before you buy. Thanks for sharing.
There are two sides to the story of course. But, not allowing rentals is a severe restriction on an owner and is a good reason not to buy a condo in the first place.
Bob - while these restrictions are prevelent in condos, they are also popping up in many SFR subdivisions and PUDs....the Opdykes' home apparently is in a higher-end subdivision with covenants that prohibit rental homes.
I see this as "tenants being second class citizens" and that mentality in the original developer/lender/builder is very unfortunate as it will ultimately lead to the option of home FORECLOSURE rather than renting the unsold home until the market rebounds.
While this type of restriction might have been meaningless in the past, buyers NOW need to consider its impact down the road on the options for their property.
Wallace, another reason for everyone to be aware of POA's. I'm not sure they always have the best interests of their membership at heart.... sic.