Upsides and downsides of condo rental restrictions
Why would condo associations not want to enforce them?
Paying rent without any kind of tax break can grow old. It’s one of many reasons that renters transition to homeowners—not just for the home mortgage insurance deduction (HMID) but for the stability, too. Some choose to take on sole responsibility with a single-family home; others opt for condominium associations or homeowners associations, a happy medium with a group of other homeowners who pitch in for any needed repairs via monthly assessments.
Unlike apartments, which are usually owned by one person or company, these associations will have multiple unit owners. (Note: Homeowners associations, or HOAs, are made up of a neighborhood of single-family homes, which is different from a multi-unit condominium building of independently owned properties. This post is directed at the latter: a condominium owner association, or COA.)
Depending on the location, a number of condos will be solely owner-occupied while others will have space for rentals. Regardless of this ratio, all residents must follow the COA’s Rules and Regulations and bylaws.
But what happens when condo unit owners decide they want to move out, whether that’s to another state or a single-family home, and the only interested buyers are those who want to purchase the unit as a rental? For some condominiums, this is a non-issue; they have no restriction on rentals. But for other condominiums, the rental restriction stands firm. This is an issue that potential condo unit owners (and investors) should pay attention to before purchasing the unit.