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JohnW18 (Georgia)
Posts: 18
Posted:
Good morning!

Can anyone point me at any statistics about how rental property affects home prices in a neighborhood?

We are currently considering some changes to our CC&R's to limit the number of rentals and to our Design Guidelines to regulate "For Lease" signs.

We want to do our homework before we make any changes.

Also, does anyone have any anecdotal experience with this? I'd be happy to hear your thoughts.

Thanks in advance.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Please for the love of everything holy read some OLDER posts on this site. We have beaten this subject to death in many of them. In short the HOA can NOT interfere with the contracts of the owner. Only banks who loan the money for purchase can put rental restrictions on the property. A HOA can NOT restrict rentals except maybe in California.

Further more... A HOA does NOT maintain one's home values. That is a misnomer. A HOA purpose is to ATTRACT future buyers. Meaning a HOA offers amenities and keeps the place attractive to encourage buyers to want to purchase homes in that HOA area. The value of homes are based on location, homes that have sold/foreclosed in a few mile radius, and the size of the homes.

Sorry but please read the other topics related to this topic. You will find we have been down the road almost weekly at this point. There is no correlation between rental and home values. The correlation is rentals and being able to qualify for certain loan types. Government backed loans have a limit on how many rental properties can be in a HOA. That just means they won't offer their loan packages or will charge a higher interest rate to buyers. That is all.

Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posted:
JohnW,

Members of this site has discussed rental restrictions in the past and will likely do so again in the future. There are varying opinions and not one statistic (at least that I know of) how rental properties affect home values.

If the property isn't properly maintained (be it by the owner or the renter) and it looks shabby (need of painting, obvious disrepair, overgrown lawn, etc.) then it's likely that potential buyers may not want to live near that property. This may lengthen the time the home is on the market. Lessening the pool of potential buyers may also force the seller to lower the asking price.

However, the amount of crime, what school district the home is in, property taxes, available jobs in the area, commuting distance to available jobs and many, many other things also affect property value. What matters to one buyer may or may not matter to another. Since there are so many variables, there are really no statistics.

The only issue with rentals, due to laws enacted because of the housing crisis, is the HUD limit on number of rentals. Since most mortgages are resold, it's mainly Fannie and Freddie that purchase them and they must abide by the new regulations. Therefore, lenders typically use those same regulations as one of the factors in determining if a loan will be made.

When I last looked, the ratio was 50%.

Here is a link to the HUD mortgagee letters

If you are considering rental restrictions, the best I've seen was prohibiting rental of the property during the first two years of ownership. This tends to keep investors out but minimizes the impact on those owners who desire/need to relocate from renting. Of course, you also need to have hardship clauses.

The counter argument to this would be - would you prefer to have the property rented and maintained vs. being left to stand empty because they can't rent it?

Hope this helps,

Tim
JohnW18 (Georgia)
Posts: 18
Posted:
Tim,
Thanks for the thoughtful response.
John
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
Please for the love of everything holy read some OLDER posts on this site. We have beaten this subject to death in many of them.


LOL. This subject only comes up once a week.
CarolR11 (Colorado)
Posts: 2,563
Posted:
Regarding signs, John18. Our high-rise HOA does limit rental/lease/exchange signs to 4'X4' in the windows and only one per frontage, but I assume you're talking about yard signs. Our own rule is based on laws in our municipality, so you might get some guidance from your local government, which may have size or numbers of signs limits.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By JohnW18 on 03/18/2013 7:12 AM
Can anyone point me at any statistics about how rental property affects home prices in a neighborhood?

Good luck finding any scientific data. Those who advocate in favor of HOA's insist that associations increase home values and that agressive enforcement of their rules results in even higher values. Whenever I ask for some reliable statistics to support this claim my question goes unanswered.

Anecdotally, I can assure you that no matter what you do or do not do regarding the rental properties, your home is worth zero to me and many other Americans. Only 20% of all homes are in an HOA and I do not see any evidence that the other 80% of us are stampeding to get into one. When I purchased my last home two years ago, I told the realtor that there were two deal-killers: swimming pools and HOA's. Somehow I have survived into my so-called Golden Years without the need for a Mommy or an HOA to run my life.

ValerieS2 (Michigan)
Posts: 244
Posted:
"Please for the love of everything holy read some OLDER posts on this site. "

Some people are looking for a current discussion and are ceratinly welcome to do so. No one is forcing you to respond.

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