Many investors and vacation homeowners purchase homes with the intention of leasing them either full-time or seasonally. But what if you were told that you were prohibited from using the property as a rental? It happens more often than you'd think.
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.
Several years ago, home builders began including provisions within the CC...R's prohibiting rentals of any kind within their communities. These provisions also included language stating that the buyer would occupy the property until the time the owner sold the home, meaning the home could not be vacant for extended periods of time. Most home buyers were aware of these provisions and agreed to them when they purchased their homes.
In a normal housing market, rentals have always been considered to be in areas that have a higher crime rate or in an area where property values are low. This is not the case especially in today's economy. There are so many reasons today why property values are declining. Foreclosures and bank-owned homes are now attributed to this cause as well.
With the declining Real Estate market and more homeowners considering renting their homes, we are starting to see Homeowners Associations attempting to amend their CC...R's to include rental home restrictions. Many people believe that CC...R's cannot be amended. Amendments happen regarding all sorts of rules and regulations. Can this be true for rental properties too?
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.
Although somewhat difficult these amendments to the CC...R's are realistic and can be done. Take these factors and considerations to heart when purchasing a home. Your investment strategy decisions could weigh differently in the short and long term. - 31821
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.
Several years ago, home builders began including provisions within the CC...R's prohibiting rentals of any kind within their communities. These provisions also included language stating that the buyer would occupy the property until the time the owner sold the home, meaning the home could not be vacant for extended periods of time. Most home buyers were aware of these provisions and agreed to them when they purchased their homes.
In a normal housing market, rentals have always been considered to be in areas that have a higher crime rate or in an area where property values are low. This is not the case especially in today's economy. There are so many reasons today why property values are declining. Foreclosures and bank-owned homes are now attributed to this cause as well.
With the declining Real Estate market and more homeowners considering renting their homes, we are starting to see Homeowners Associations attempting to amend their CC...R's to include rental home restrictions. Many people believe that CC...R's cannot be amended. Amendments happen regarding all sorts of rules and regulations. Can this be true for rental properties too?
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.
Although somewhat difficult these amendments to the CC...R's are realistic and can be done. Take these factors and considerations to heart when purchasing a home. Your investment strategy decisions could weigh differently in the short and long term. - 31821
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