Should You Buy a Rental Property with an HOA?

Should You Buy a Rental Property with an HOA?


38 thoughts on “Should You Buy a Rental Property with an HOA?

  1. I would steer far away from homeowners associations in this case. I've known too many people that have gotten into very difficult situations when the HOA banned rentals. Another thing to consider is that some associations have bylaws that make it near impossible for the leadership to change. Even though you may have a vote, your vote may never matter. There are numerous parliamentary tricks that can be used to keep a select group in control.

    I've seen the opposite of your roof issue. I know of one HOA that failed to maintain the properties. The city actually came by and condemned every deck in the condo complex because the HOA would not fix structural issues (The money was being spent on unnecessary things). When residents sued the board, they lost (If you thought fighting city hall is hard, try fighting the HOA sometime).

    In the end, the units in the complex lost over half their value and put the owners in very difficult financial situations. There are better properties to be had and such associations give you a very large amount of risk for an at best, average reward.

  2. Not every HOA is extreme as you have explained in your video. I have known many HOAs that dont have any and all restrictions you have talked about. I get it. HOA fees are a pain. However, same thing applies when you own a SFH. it's not all walk in the park, when you have to do the lawn, clean the snow, fix the roof leak after a snow worst yet change the roof. And guess what? All these cost money. So it's not always hunky dory with SHF purchase.

  3. Hey Clayton, this actually isn't regarding the video, although you've done a fantastic job with you channel! I've been devouring your podcasts lately and in a recent one you mentioned that some of the earliest episodes are the best, but for some reason the earliest ones keep disappearing from the feed whenever a new one gets uploaded. Any idea how I can access those? Thanks and keep up the amazing content!

  4. 3:55 The same thing happened to a friend of mine in Florida, he lost his job and the same month when he lost his job the HOA decided to do an assessment for some maintenance on his property and they charged every unit like $2,000 for the assessment and repairs just as he lost his job. HOA is the devil, they can demand money at any time for any reason and your obligated to give it to them, my friend said he has 2 dead people on the council membership for his HOA but their spouces are making all the decisions for the dead people too.

  5. What do you consider kick ass return?on an apartment of 125000 with HOA of 300 per month if you pocket 400 would that make sense?

  6. no because they can raise the association fee lot more than you can even get for rent and mortgage and second of all they can change for you can not sublease rent the property so do not do it

  7. HOA–JUST SAY NO!

    You touched on the same thing with assessments, but one more thing. If the HOA loses a lawsuit, guess who is on the hook?

    When you go for a mortgage, you will have to get the HOA to fill out a questionaire. HOAs love to charge for this, and love to take their time.

    Watch out for an "HOA of 2" which is where a patio home is titled as a HOA for builder conveniance. You are at the mercy of your neighbor. If you buy one of these, figure out how to get the HOA dissolved and the deed restrictions removed.

    I say never, ever, buy a single family detached home in a HOA. Good news is HOAs usually do not cover older stock at the lower end of the market, the $50K homes.

    Put another way, HOAs are for people for who federal, state, county, and local restrictions are not enough and need more rules to follow.

  8. I refuse to rent or buy a property with an HOA. I avoid communities with them entirely. I have even refused job offers when I found out that the town was filled with HOAs.

  9. Hi Morris

    Great video!! I have a question, I have a friend who is currently renting out her condo unit to a tenant however the HOA has decided that she can no longer rent her unit and now the tenant must move out. Do you think there are any options for my friend and her tenant or is all lost and the tenant MUST absolutely move out?? My friend thought of a plan for her to sell the condo to her tenant for 1 dollar temporarily to kinda go around this, what are the repercussions of doing that.

    Any input would be appreciated. Thanks

  10. HOAs are good for nothing in my opinion. Just a bunch of Napoleons dictating what everyone can do. I wouldn't buy a chicken coop in an HOA.

  11. I blindly got involved with HOA with outstanding lawsuit that title search couldn't find .
    Just stay away from HOA for peace of mind on your investment.
    Thanks always Morris invest.

  12. HOA is a fucking joke and a pain in the Ass. My HOA only charges $40/yr and all they do is Shovel the Snow in winters. I never ever heard anything from them. I can move my lawn when ever i want, Or if I want, put on what ever color i want on my house, put on any colored curtains in my rooms, I can cut of plant trees or plant them without asking anyone, and the Best part is that I can throw a backyard Party when ever I want without taking permission from anyone. I am in no way a Bad neighbor and I am always on top of my Moving and keeping my Yard clean, But this sense of Freedom that I have is priceless. I know, all the people who are struck in a Strict HOA neighborhood are really jealous of me Now………. Lol.

  13. Then you get a bad HOA and even worse Property Management company like at Summer Wood estate in SC. HOA refuses to fully disclose minutes of board meetings or be transparent in their actions and Property Management company Gold Crown have not submitted books for financial audit for over 7 years. Tail wagging the dog and a great reason to not have either a HOA or Property Management company!!!

  14. If you have to live in an HOA, just make sure it's on a smaller scale, < 20 units and check HOA fee history.

  15. Our HOA is currently changing the rules to restrict rentals for the exact reason this guy mentions. Rentals ruin HOA communities.

  16. I'm with you that if the numbers work I'd be willing to go with an HOA condo. I'd carefully research the association and meet the directors ask neighbors, etc. before purchasing just to see how much of a pain in the ass they may be. And make sure they are taking care of business with their fees and not going to get in trouble with assessments in the future, etc. I'd feel much more secure knowing I don't have to deal with the outside of a house.

  17. Make it simple don’t do it, you’ll never make your money back. They will dick around with you they just want to hang you out to dry with fines fees, and outrageous by laws that never work for you!!!!!!

  18. HOA, is unconstitutional in so many ways it should be illegal period.
    It’s socialism and fine example of a tyrannical majority oppressing a minority’s own god given right to control their own property.
    Contact or not, no one owns, or controls something that they just sold.
    HOAs, are nothing, but a bunch of democratic dictatorships that pimp free communities into brothelized socialism whores!

  19. I have herd so many horrer story's about HOAs the past few days.

    I have herd story's about HOAs requiring dog owners to J-walk there pets in the road meant for cars as there not allowed to walk there dogs on the sidewalk, to HOAs thinking there traffic cops & issuing fines to home owners for going 2mph over the speed limit, to telling people to paint over stucko walls on there homes thus destroying the homes walls & the homes value, to telling people there expensive professionally installed & up to state code safety fences is made of the wrong metal & that they must go without a safety fence that the owner had put there for safety & liability reasons.

    Honestly after what I have herd, I'm beginning to wonder if I would have to file forms to the HOA just to take a leak in my own bathroom. They probably would fine me for wetting myself just because I couldn't hold it while filing out all there annoying forms.

    Glad I don't live on an HOA.

  20. Hello Clayton. I remember during one of your videos you liked the Indianapolis rental market. Well I have an opportunity for you. I have a single family home that has been successfully rented in a great neighborhood that I have been considering selling. It’s a 2056 sq ft ranch, 4 bed 2.5 bath, 2 car garage and there aren’t many this size on the market according to a friend of mine who’s a realtor. He’s been wanting me to sell for a while but the rent is too good so I just keep collecting. FYI it’s not in your wheel house of the price you want to pay, no where near but if you would like to talk please provide contact info here.

  21. Can we truly say "if the numbers work" when you have that variable factor of what and when the HOA can do anything that could change your numbers. Or when saying the numbers work, it would have to be such a large return, that changes wouldn't completely destroy your profit, and is that even possible?

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