Unintended Consequences ....
We know that many times one new rule made to benefit others has the opposite effect sometime in the future. It's seems to be a new 'law of the universe' over the last few years with mortgages, appraisals and this new real estate economy.
A case in point for associations making rules against owners renting out their units or selling to investors. The rule is 'intended' to clean up the neighborhood making owners a clear majority in the subdivision. The normal thinking is that owners preserve their properties better than tenants so the entire subdivision benefits.
But do they?
Let me tell you a story about those unintended consequences. This particular subdivision stopped allowing renters and investor purchases many years ago and then the economy changed. Owners could not sell their properties and they couldn't rent them either. The board officers would now be able to hear 'on a case-by-case basis' the homeowner hardships for a variance of this rule. Another problem occurred when the board just said 'no' or the economic impact to the homeowners didn't seem damaging enough.
So what happened?
What did happen was these owners who were not able to sell and not able to rent their properties were left with one option - foreclosure. Now, I'm sure that was the furthest thing from anyone's mind when they voted for the anti-renting regulations nearly 10 years ago.
But things have a way of changing .....
This comes up many times a year when I'm asked and I've changed my stance on rent restrictions. Does the subdivision really benefit when restricting rental rights? Obviously in this example you can clearly say 'no'. Personally I would take a tenant in the subdivision over a foreclosure any day. A foreclosure has a heavier impact on the values than any renter ever could.
It's not always about right now!
Regardless of your age, you want to be sure that your assets passed down to your family are not hindered in any form. If your descendants can't sell at a decent price and they can't rent either - what are they to do with your home? It just becomes a money pit which your survivors cannot afford. Why restrict anything that they could do with your property?
Thank hard before you give up any future ownership rights.