Should I Sell?

Question

Hi.  I am relatively new to BP so hello everyone.  My experience with real estate investing is limited to purchasing properties using bank loans thus far - three thus far, one SF for my primary residence, and two condo rental units.

The situation I'm in is that I have a rental unit in Cape Coral FL (I reside in Denver CO).  It has been rented out with no issues for the past four years.  However, my previous tenant moved out and I am in the process of renting the unit again.  The HOA is making this process extremely difficult and I am at my wits end with dealing with them.

They are asking for my first born child and one month's worth of rent as a deposit for the common areas.  Is this normal?  I'm already paying $300.00 per month for HOA dues, which obviously eats into any cash flow that I would have.

I'm thinking about selling the condo unit and reinvesting in a SF elsewhere.  I purchased the unit in 2009 for $86k.  The Zestimate on it is now at $118k.  At it's peak, the same unit was selling for $200k.

Does anyone have any advice on this situation?

Thanks,
	Bryan

Bill S. · Answer

Bryan Calton what you are experiencing is not unheard of with HOAs and a very good reason not to invest where there are HOAs. They can be good if well managed and terrible if run by the Gestapo

You need to get a current copy of the Covenants and Restrictions. Those tell you what they can and can't do.

Personally with property that far away in an HOA I would sell but there are many good reasons not to as well.

Account Closed · Answer

Thanks Leon, great insight.

The tenant will cover all of the holding costs, yes.

Also, the unit was built new in 2009 so it is pretty much updated...but not flawless by any means.

I will see how the next couple of days goes and see if we can get this new tenant moved in - again, it depends on the HOA's approval.

Bryan

Account Closed · Answer

Thanks Bill, good information.  Yeah, my other condo was part of an HOA and it just adds a layer of unnecessary difficulty to investing.  I sold that unit recently so perhaps it is time to sell this one and at least purchase a SF home in the same area.  Bryan