Issue link: https://hub.associaonline.com/i/1355341
LONG-TERM SINGLE-FAMILY RENTAL INVESTMENTS One of the main reasons people buy into an HOA is the consistency of property values, so your single-family investment rental home is sure to see a profit from more than rent alone. As with any home purchase in an HOA, be sure to review the governing documents before signing on the dotted line. Working as an investor or landlord, you reap the benefits of HOA living and rental income, but you might also face some challenges. THE BENEFITS: • Increased loan equity. With every rent payment collected, your tenant is bringing your principal loan balance down and increasing your equity position in the asset. • Tax incentives. Real estate investors benefit from tax incentives, as well. These tax benefits come in the form of write- offs, benefits tied to holding a mortgage, and even IRS classification of your rental, depending on its usage. • Selection of amenities. Walking paths, pools, recreational areas, gyms, and parks are all amenities long-term renters appreciate. • Standards of compliance. There are guidelines that all homeowners must comply with, and buyers and renters alike should make themselves familiar with the governing documents before signing into any living agreements. • Common area maintenance. A well-maintained community not only attracts potential renters but also eases your burden to maintain this space as a landlord. THE CHALLENGES: • Rule compliance. Without constant eyes on the property, it can be inconvenient and stressful for landlords to keep up with assessments, fines, and unexpected violations. • Neighbor disputes. Whether it's a dog bite or a parking situation, tenants can, at times, get into issues with neighbors that may call for intervention from a landlord or the board. • Renter obligations. Besides paying rent on time, communicating the tenant's obligations in maintaining the property is critical in avoiding penalties. • Rental vacancy possibility. The longer a rental property sits vacant between tenant turns, the more costly it is to upkeep the home.