DFW REI Club
Dallas/Fort Worth Real Estate Investor Club
I'm interested in hearing what advice/experience anyone has to share about buying townhomes and/or condos as rentals and what the implications are for a property that's within an HOA.
I am just a contractor but have dealt with HOA on condos for a long time. They can be difficult to work with at times But typically you can do pretty much what you want with interior finish out but they will want to maintain exterior or have you meet the HOA criteria. Be aware if the HOA has chill water system and boiler to supply AC and Hot watre to units run fast as the water lines run trough all units and sometimes they burst flooding units and are very expensive to maintain and some HOA will not work expeditiously to make repairs or will fight with you on the responsibility of damages.
we have just completed a 400,000.00 condo in Dallas and had 0 issues with the HOA. I have an associate I work with (Realtor) who may be able to help you out with more info Jason Reynolds 817-269-0988.
If you would like more specific details please feel free to call me anytime at 682-597-6814 Kenny Powell
Thanks, Kenny. I have used your services...
Now, does anyone have any advice on *investing" in this type of property? That's my real question.
I haven't bought any condominiums or townhomes. They look and feel like apartments, but they're not. They're homes, and, as you mentioned, a Home Owners' Association (HOA) is often in place. In a scenario where my desire is to hold a condo as a rental, that alone is enough for me to be say "No, thanks." Why?
A quick Google search yielded the following. I borrowed most of it from www.frugalwoods.com. BTW, there's lots more info out there too. Again, the stuff below is more than enough for me to seek other investment opportunities.
Paula, I actually own a townhouse that is in a HOA for an investment property. There are certainly two sides to every coin on this so as long as you know both sides you will make the right decision. For me the attraction was that I could advertise a no-work needed property for rent. Meaning, no yard work, no pool cleaning, the renter could basically come home and not worry about anything! This townhome is also very conveniently located, had a gated community, pool, fitness center, etc. and those are also selling points to certain renters. It has always been rented and I always have a higher quality renter in this property than my other properties. Now, I did my due diligence with this property also. I reviewed the HOA bylaws before hand - they allow owners to rent the units as long as the HOA community has a copy of the lease agreement on file. And I made sure that the HOA monthly fee was factored into my costs and I reviewed the HOA budget to ascertain if the fee would ever increase (it hasn't increased for 8 years). For lending purposes a HOA is viewed differently than a COA (Condo Owner's Association). Since this would be a conventional loan type (or portfolio) for an investment property the conventional loan would require the COA to be approved by a Fannie/Freddie underwriter. This is normally not a big deal as long as the COA is financially solvent they normally pass. You will not be receiving an FHA loan since those are for your personal residences. Hope this helps!
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