Thinking about purchasing a home as a rental? Whether you are an investor or second home buyer this might not be your initial intent but could definitely be a consideration in the future. As a second home buyer you may consider renting your home during the off season. Could you imagine a law informing you that you are restricted from renting your home? It occurs more frequently than one would believe.
In Arizona for example, most communities built after'90 are in master planned communities and have Homeowners Associations in place. Also called HOA's, these associations have rules and restrictions known as Covenants, Conditions ... Restrictions (CC...R's). These rules are specific as to how the homeowner may alter or use the land and the property.
Surprising enough there are guidelines as to what percentage of grass you are allowed in the landscape, the colors and trim on your house and even your window treatments. Review and thoroughly read the CC...R's before purchasing a home. You are usually given a certain time frame to review these documents and will have an opportunity to cancel your contract.
Some CC...R's restrict owners from renting their homes. Some rules state that the property cannot be vacant for any length of time. Most homeowners are aware of the restrictions. During the real estate boom in 2004-2005 many new home builders would not allow someone to buy a home unless it was their primary residence. Even though many homeowners were aware of their responsibilities, the housing crashed left the homeowners no other choice but to break some of these rules. Of course, it was unintentional.
Rental properties have often been associated with higher crime rates, declining values and homes that are not maintained. Although this is a perception by most, it is usually not common in every community with rental homes. But a couple of bad apples ruin the bushel.
Is renting our homes today an option? This is a good question. Many HOA's are trying to amend their CC...R's to prevent rentals in the community. Where does that leave us? Do we have any leverage or authority in the HOA's? Can they make these changes without our approval?
Most states have laws clearly stating that if you reside in a Homeowners Association that has CC...R's, there is a contract between the property owner and the Homeowners Association. When you execute your purchase, the imposed restrictions are binding. Hence, you must follow the rules.
The issue with amending the CC...R's after the purchase may be difficult but it can be done. When purchasing a home in a Homeowners Association, read the documents carefully. Consider the long term effects of the restrictions and how they may apply to your investment strategy.
In Arizona for example, most communities built after'90 are in master planned communities and have Homeowners Associations in place. Also called HOA's, these associations have rules and restrictions known as Covenants, Conditions ... Restrictions (CC...R's). These rules are specific as to how the homeowner may alter or use the land and the property.
Surprising enough there are guidelines as to what percentage of grass you are allowed in the landscape, the colors and trim on your house and even your window treatments. Review and thoroughly read the CC...R's before purchasing a home. You are usually given a certain time frame to review these documents and will have an opportunity to cancel your contract.
Some CC...R's restrict owners from renting their homes. Some rules state that the property cannot be vacant for any length of time. Most homeowners are aware of the restrictions. During the real estate boom in 2004-2005 many new home builders would not allow someone to buy a home unless it was their primary residence. Even though many homeowners were aware of their responsibilities, the housing crashed left the homeowners no other choice but to break some of these rules. Of course, it was unintentional.
Rental properties have often been associated with higher crime rates, declining values and homes that are not maintained. Although this is a perception by most, it is usually not common in every community with rental homes. But a couple of bad apples ruin the bushel.
Is renting our homes today an option? This is a good question. Many HOA's are trying to amend their CC...R's to prevent rentals in the community. Where does that leave us? Do we have any leverage or authority in the HOA's? Can they make these changes without our approval?
Most states have laws clearly stating that if you reside in a Homeowners Association that has CC...R's, there is a contract between the property owner and the Homeowners Association. When you execute your purchase, the imposed restrictions are binding. Hence, you must follow the rules.
The issue with amending the CC...R's after the purchase may be difficult but it can be done. When purchasing a home in a Homeowners Association, read the documents carefully. Consider the long term effects of the restrictions and how they may apply to your investment strategy.
About the Author:
See more information about gilbert az homes by clicking the link: gilbert az homes today.
No comments:
Post a Comment