Buying a Home and the Community Rental Policy
Whether or not you are going to be a full-time resident, considering renting out your property for investment purposes, or just looking to cover some of your operating costs, it is important to understand the rental policy in the community. Knowing your rights and those of your neighbors is an important part of the due diligence process as a buyer.
By rental policy we mean the community rules and regulations permitting a property owner to rent out their residence. These often include the minimum duration of the rental period and the maximum number of times an owner can rent the property during a given year. A short-term rental is less than six months, and a long-term rental is more than six months.
The community rules and regulations include state law, local government jurisdiction and associations with governing authority such as a Homeowner’s Association and/or a Condominium Association.
Did you know the rental policy may impact the ability of individuals to obtain a mortgage loan in some communities? It may also influence the value through the amount of rental income generated, thereby affecting the purchase price when the property is sold. The rental policy may also influence the amount of activity at certain times of the year or week throughout the community.
So, who can help you determine what the rental policies are? The best place to start is with your realtor. Asking your realtor about rental policies and explaining what your objective is will help you zero in on the best options early on. Property management companies, and lender contacts are additional resources for greater understanding. Community documents are the best resource to make your final decision and you should always consult an attorney if you have a legal question.
By gaining this knowledge upfront you as a buyer are better prepared to decide on a property. You won’t waste a lot of time looking at properties that don’t fit your needs.
Pro tip is to align your search with a community/property having a rental policy consistent with your goal from the start.