Monthly HOA fees on rental properties
6 Replies
Steve Lawrence Sr.
posted over 1 year ago
The property in question is a Condo that is bank owned and is practically rent ready. It is a bank foreclosure but it has a monthly HOA fee of 230. Should properties with these sort of fees be avoided?
Ray Harrell
Investor from Chicago, Illinois
replied over 1 year ago
That's not bad at all. Just include it in the rent, and make sure the HOA is doing what they are supposed to do. In Chicago I've seen HOA fees as high as $1,000 per month. That fee includes water, trash, common maintenance, landscaping, snow removal, sometimes windows.
Ray Harrell
Investor from Chicago, Illinois
replied over 1 year ago
Also check with the HOA to see if you can purchase the unit as an investor. MOST HOAs require owner occupancy for at least a year. If they find out you are leasing during the first year they can foreclose.
Steve Lawrence Sr.
replied over 1 year ago
Definitely, I asked that question before I asked about the fees
Sathish Sekar
Real Estate Agent from Chicago, IL
replied over 1 year ago
Also please check on the past due HOA assessments. If this is a bank owned property, the HOA fees likely haven't been paid for many months.
In Illinois, typically the buyers of foreclosed condos need to pay the past 6 months of HOA fees.
Joshua A Kloos
replied over 1 year ago
I spent 6 months as an HOA manager and that was enough for me to avoid them like the plague.
A lot of power hungry board members arguing over what color fence to put up and what color doors are allowed.
May be good option depending on you though.
Make sure you read the governing documents and articles of incorporation - these outline the HOA rules and are public information. Your agent is able to request these, might be available on the HOA website or via the cities Business Commissoner website.
Read these in depth, some HOAs do not allow renters or even have clauses which allow the board members to control the rental agreements.
Hope this helps!
Best,
Josh
Steve Lawrence Sr.
replied over 1 year ago
Thanks that helps