Second homes

I was an owner of 2 homes. One in the HOA and one outside of one. My house in the HOA was my primary residence and the other house was bought for investment purposes only. It was to be a remodel and resale. Unfornately, the bank doesn't allow this to happen. I had to have a one year lease on the other HOA property before being approved for the loan for the second property. So I decided to Rent out my HOA home. I was President of the HOA at the time. I still could be the president or board member since I was still the owner of the home.

Unfornately for me, my renter stopped paying rent for several months, I lost my job, and was stuck with 2 mortgages. Just like the bank had warned me about if I had kept both homes as residences. I was forced to sell the HOA home and now stuck in the remodel from "a really HOT place".

I will tell you the time period that I did use my HOA home as "Rental" was good for me financially. I was able to rent the home out slightly above my mortgage payment. Plus the HOA fees were tax deductible. HOA dues are NOT tax deductible if it's your primary residence. So I liked the fact that any repairs or dues that I paid were completely counted off on my taxes. At one point, I was involved in a possible lawsuit with the HOA. It was about an illegal assessment for an overpriced repair. I was only a board member at that time. I had a group of owners on my side. The legal costs of my fight was also tax deductible since it involved "investment property". So all in all, I didn't have a problem with my HOA property. I did have one with my renter. He destroyed the place. Unfornately, Renters have rights and kicking them out isn't as easy as one thinks.

Would I own a second home again? Most likely "Yes" if I could afford it. Would it be in a HOA, maybe. There are many factors that go into a decision like this regardless if it is a HOA or not. There are laws against purchasing multiple properties in a short amount of time in some states. Especially involving Condo's. So you have to be careful about purchasing multiple properties. I can't tell you the exact circumstances off hand, but there are regulations.

Owning HOA property and NOT living in it, doesn't make you immune to the rules or regulations of it. So always keep that in mind. The OWNER's are always held responsible ultimately for any damages or failure to pay dues. The owner's are responsible for paying HOA dues NOT the renter. A HOA can be liened or foreclosed on if you the owner don't pay the dues or assessments. Having bad tenants can play a factor as well.

I don't know what your really contiplating here about owning a second home. I do recommend you don't own one in a HOA if your not interested in maintaining it or paying your fair share.

PER MELLISSA P..."There are laws against purchasing multiple properties in a short amount of time in some states. Especially involving Condo's. So you have to be careful about purchasing multiple properties. I can't tell you the exact circumstances off hand, but there are regulations."

Mellissa -- Being in the construction industry and working with multiple lenders I have never heard of any laws regarding purchasing mutiple properties in a short peroid of time....I have worked with some rather wealthy individuals who have purchased NUMEROUS properties in one pop... I would be interested in knowing where in the world did you ever hear of such a thing....Thanks Bunches LindaC

I believe in Florida is where one law originated from. It may not apply to most states. What happened in Florids (I believe) is that there were some scrouplous condo buyers. These buyers would purchase condo at a low price, fix them up, and jack the price way up. However, they were using "shotty" materials. Items of which would break almost immediately after purchase. We are talking miswiring or possible fixing plumbing leaks with duct tape. Things of that nature. The new owners would then get stuck with the bill of the repair plus the repair of the other units above or below if necessary.

The "duped" owners of these condo's sued the sellers. It took years to get through the court systems. Finally, the sellers were put in prison for what they did. I heard one got 10 years minimum in the State Pen. From what I have gathered, there was possible legislation involved in preventing this type of situation from occurring again. A law that restricts purchasing multiple condo's within a years time is limited. I believe the owner must own the condo for a year before they can sell it. This is to prevent people from gutting out a condo and selling it within 3 months.

Now NOT all states have this restriction. I know of only one that exists for Condo's since they fall under a different catagory of housing. It's extremely hard to prove and no one for the most even cares to pursue it. No one's going to make an issue out of how many properties you own or "flip". They will make a big deal out of it if you ever "flip" a house with substandard workmanship.

I don't believe many people are in danger of violating any laws. However, you should be aware that if your considering remodeling a home for resale, make sure it's done correctly. You get an owner angry enough, they may just pass legislation against it.

Robert, as posters here have stated, whoever purchases a second property (let's not use "home") is the owner, whether they own one, two, or fifty units/properties. As the owner of those properties, the owner is solely responsible for the HOA commitments, taxes, mortgages, etc. If the owner chose to rent, then the owner is still the responsible party to the entities listed above. It matters not whether the owner lives there or in another property, they are owners, and entitled to all of the benefits afforded - as well as the responsibilities as well. As to a President of a board not living on-site, all I can address to that is that he was not "born" into his role as President, he was elected, by the other owners. Obviously those who voted (or those that did not vote), did so knowing his status. If that is a huge problem for a majority of the owners in that community, they can always vote him out of office and try to elect a "on-site" President. Other side is, what should it matter if he lives there or not - if his performance is good for the community?

Melissa, when you post comments about "prevention of purchasing multiple unit/properties," etc - you should provide a case law, or legislative (passed) statute/code which supports. America is a capitalist society, and rarely does government seek to limit financial enterprise. Not saying that illegal "flips" (which is fraud) do not occur - but there are no laws preventing a person from purchasing multiple properties. There however maybe "peripheral" laws which establish conduct of such purchases, with specific requirements (which are often only amplifliers to single purchase properties), which are to safe-guard. Example, my community, during sales period there was a clause in every contract (condo, townhouse, and single-family) that for the first 12 months of ownership, the new owner "agreed" not to rent the unit. Largely if not impossible clause to enforce, because if the funds and desire to purchase more than one unit, and rent - is not secured by any state code/statute. I think that what you are referring to is HUD's and mortgage companies which police housing laws, with regard to predatory loans, and fraud - or with construction inspection agencies, or laws (state/local) which address poor craftmanship on homes.

Jadedone4,
Thank you for your input. I must say that is seems a little strange to reply to what I wrote in such a fashion. I was speaking primarily of Second Homes which I am sure you are aware is different than just two different properties. I never insinuated in any way that absentee owners don't have the same rights as full time residents, they certainly do, but I would have to also state their physical abscence from the property over 90% of the time changes the day to day responsibility to the property. If you have 20 % of the folks full time and you have most of the rentals for as short as three days and as long as a month, where is the prescence of the absent owners that have the same obligations to protect and perserve the property.

After observing and living under these conditions full time for over 17 years I am smart enough to recognize change, and that is the reason for the post. What is this shift in ownership in HOA and condos going to do to the management of the places. I think we can see a big surge in Hotel Condos already, the proliferation of second home investors, (call it like it is) is going to require some condos to address these changes. This is my belief but it was not my idea, I just experience and live, and try to learn at little every day. Frankly and bluntly, to think that absentee investors are out for the same goals as full time residents trying to maintain a nice safe place to live is a stretch too wide for me to believe.