There are many reasons why homeowners choose to live in an HOA, from community-centered philosophy to property maintenance.
Yet, an important question remains: can HOA property owners rent out their homes to tenants?
The answer is "yes!"
There are plenty of reasons why such a homeowner would rent out their home. Their HOA property may be their second home. They moved to another area but want to keep their original HOA property in their portfolio.
Managing rentals in HOA community settings isn't the same as typical residential areas.
Here are a few things to nail down first before renting out a home.
Talk to the HOA Board First
If you're living in an HOA, you already know about the homeowners association board. This board consists of fellow homeowners. They may have titles like board president, vice president, treasurer, and so forth.
These members are appointed to do the following:
- ensure HOA common areas are tidy
- oversee compliance and governance
- HOA finances and budgeting
- choosing HOA management
- hold homeowner meetings
- communicate with HOA homeowners
The HOA board is the main point of contact for the renting out of properties. This point is the primary difference between renting out an HOA property vs. a typical residential home.
All HOA communities are different. Many communities outline rules for renting out in their governing documents. You may only be required to notify the board just so long as you're following the rules.
Rules About Rentals In HOA Community Neighborhoods
The biggest mistake you can make is not educating prospective tenants about HOA community life. These communities have rules about maintenance, occupancy, pets, and behavior. Tenants may incur fines for noise complaints to pet types if they violate the rules.
Ensure all applicants have read and understood the HOA's rules. You may want to include a little quiz in the application just to make sure.
Draw up a tenant contract approved by the board. An addendum will prevent you from having to pay your tenant's rule violation fees.
Once approved, tenants need to know how (and when) to communicate with the board.
Run a Tenant Background Check
Since HOA communities have many rules, run thorough background checks on applicants. This point is one reason to work with a property manager. They'll run a more detailed screening than a typical background check company.
A really important point to consider is the tenant's rental history. Screen for any issues with property damage, conflict, noise complaints, unpaid rent, and so forth.
Questions to consider:
- Did the applicant get along with past landlords?
- Did they pay rent on time?
- How did they leave the property?
A manager will conduct interviews, run credit scores, and use any other data sources to uncover the information you need.
Take the Next Step
Once you talk to the board, draw up tenant contracts, and run proper screenings, you can take the next step. Keep this guide handy as you start managing rentals in HOA community neighborhoods the right way.
PMI Properties in New City, New York brings a wealth of experience in HOA property management. It's part of an even larger network with over 20 years in the industry.
Schedule a consultation today or reach us during our office hours, Mon-Sun 8:00 am to 8:00 pm.