Well intentioned homeowners associations everywhere are restricting the percentage of condo units that can be rentals. Many associations feel that restricting the number of units that can be used as rentals will help support or even increase the value of all the units in the complex. Remember of course that homeowner associations (HOA’s) are made up of individual unit owners.

On the surface this makes sense – the problem for investors is that no standard percentage for rental units exists. One complex may allow 25% of the units to be rentals while another only 5% while some complexes may have no restrictions whatsoever. The other major problem is that these percentages can be changed at any time by the association. This means that if an investor were to purchase a unit and rent it out - 6 months into owning it, the association could reduce the maximum percentage of rentals allowed to a point where this unit is in violation of HOA rules. This means that once the lease is up – the unit has to be sold or it has to become owner occupied or be in violation of HOA rules, in many cases, subject to fines and possibly worse.

Any real estate purchase requires very careful consideration, when its a condo being purchased for investment - be very careful - there is just no way to determine what the HOA will do.