Condo Rentals vs Property Values

What do rentals do to a condo community in terms of property values
Do they decrease values? Do they affect the property values at all? Where could I look to get legitimate back on either of these points of view?
Susan

Rentals can increase or decrease property values in the community.

On the one hand, rentals increase the pool of potential buyers for units by making the units attractive to investor owners. However, if the condo community has too many rentals with no caps, the condo may pay higher insurance rates and not meet mortgage underwriting guidelines. In turn, property values go down.

Furthermore, a high number of renters usually means more homeowner apathy by the investor owners and may affect association politics. For example, investor owners more than other homeowners want the assessments kept low even if it means cutting back on regular maintenance.

Susan,

IMO, the only effect a high number of rentals may have on a condo complex might be the inability for potetial buyers to secure FHA or VA mortgages. If your condo complex is on HUD's approved condo list, then 80% of the HUD-insured mortgages must be owner occupied. If your condo complex is not on the list then the lender may go through the "spot approval" process whereby at least 51% of the units in the project must be owner-occupied. More info on this may be found at: www.easyfha.com/fhacondoproject.htm