Investor · Greenville, SC · Member since 2012 · 269 posts · 187 votes
I was curious to see what others think about this. I have a condo with an HOA that limits the number of units that can be rented to 25%. In your opinion, does that hinder the value of the property or does it enhance it?
There are two conflicting thoughts here, to me:
-One says that you are limiting the number of people interested in the condo because they won't be able to rent it out, thus lowering the prospect pool and price.
-The other says that it increases the appeal of the condo for someone who wants to live in it because they are not going to have a lot of turnover (i.e. consistent neighbors, other people who care about the community).
Ultimately I think the limit hurts property values, but I am sure there are factors I'm not privy to. Thoughts?
Virginia Beach, VA · Member since 2016 · 44 posts · 20 votes
10y
It can actually increase values. The FHA wont back a loan on condos where the rental rate exceeds 50%. If potential owners can't get qualified financing then units dont sell and thus prices decrease without rental restrictions.
full-time CPA & part-time RE Investor · Colorado Springs, CO · Member since 2016 · 102 posts · 46 votes
10y
In my experience, the limit increases property values. It can be a problem for a buyer who wants to rent out their unit (if the rental unit limit is reached), but the buyers who want to live in the unit, will pay more if the development isn't full of renters.