Are Condos Good Rental Properties
If you're thinking about renting out a single condo and you don't own the building, however, you may want to think twice about doing that. Here's why:
Condos Don't Always Have Tenant Agreements
When you purchase a condo, you're buying real estate. You're also buying an agreement that is much like a home owner's association. Unlike a single family home, however, the condo's agreements tend to do with who can and who cannot occupy a property that is owned by you. Many condos don't offer rental opportunities because they are a community that is seeking a controlled environment.
If the condo community does allow you to rent out your condo, you may need to vet several tenants in order for the rental to be approved. The tenant that occupies your property would need to meet certain income standards, or pass a credit check, or even pass an employment check in certain jurisdictions. Kids may or may not be allowed. Pets may or may not be allowed either. Because of this, you may be putting in a lot of work and not be able to get any value back in return.
I Have a Condo... What Can I Do?
If you own a condo within a complex right now and you're looking for extra income, then the first thing to do is check your HOA rules. You may be able to rent your property, but your tenant will not have any say in how the community is governed. With condos, you own specific portions of land, but you also own a share of common land that may or may not be used by the tenant, depending on your rules. You will need to specifically stipulate what a tenant may or may not do when renting from you to avoid legal complications.
It is also important to provide tenants with a copy of the complex's covenants, conditions, and restrictions. These CC&R's are a lot different than the agreements renters typically sign with an apartment lease and often have repair and upkeep responsibilities that a tenant may not be familiar in handling. As the owner and member of the HOA, you will be held responsible by the complex for the tenant's actions. Because of that, condos are sometimes a difficult rental investment to make.
Parking, pets, and the number of people in a home are the three biggest issues facing landlords who rent condos. If you know what the rules happen to be and clearly communicate them to your tenants, then you could have a profitable investment in your portfolio. If you keep your tenants in the dark, even unintentionally, then the price to be paid will likely come from your pocket instead.
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