According to the 2019 American Community Survey, more than 44 million American households rent their homes. That number has only gone up since then, and for many Americans, renting makes economic sense. Do you want them in your community?
Some homeowners ask their HOAs to bar the practice. The issue of rentals in an HOA community hasn't yet found a uniform conclusion, and communities must navigate the issue on their own.
Before you make the decision, you should have a good sense of the benefits and drawbacks. We'll walk you through some of the biggest pros and cons of letting your HOA community welcome America's millions of renters.
Pro: Increased Income
If your members struggle with fees, dues, and other realities of HOA living, a renter can help. Renters give their landlords additional income with which to meet HOA obligations.
If your community has seen a strong push for renovation or green building, renters can encourage these types of investments as well. Rentals can provide tax deductions and other advantages for members looking to contribute to maintenance. If your HOA board needs the funds for a major community improvement, renters might help.
Con: Rentals in an HOA Community May Not Follow Rules
Do you have strict rules about pets in your HOA? Do all members expect noise to cease at 10:00 sharp? Allowing rentals might not work for your community.
While nothing prevents a renter from making a great showing as a neighbor, some renters feel less committed to HOA rules than their owner counterparts. They might feel less of a stake in the community as they don't own their dwellings.
If you allow renters, make sure to outline the importance of any of the HOA rules. Texas law refers to these as restrictive covenants, and they play a major role as a binding contract in HOA life.
Pro: Builds Loyalty
Rentals in an HOA community can encourage long-term loyalty and incentivize renters to buy within the community. If renters like the atmosphere and their financial situations improve, they could look at purchasing a home within the community.
Mixed: Property Values
While renters don't make a significant impact on property values in themselves, they can behave in ways that do. If renters pay their rent on time and contribute indirectly to HOA dues, they can encourage growth in rental valuation. If they make poor neighbors or become habitual rule violators, however, they can drive values down.
HOAs don't need to stay passive on these issues. Firm HOA management can encourage compliance and commitment among renters. This, in turn, helps get the best property value effects out of your new residents.
Your Space for Rent
Rentals in an HOA community can contribute to a fun, exciting community life. If they set down roots, they can transition to homeownership and become a long-term part of the community. Make sure to underline the necessity of commitment to the HOA rules, though.
If you need an HOA management firm that can help you get the best effects out of renters, contact PMI Bluebonnet Realty, and let us bid to manage your association. We have more than a decade of experience enforcing covenants, conditions, and restrictions, and can ensure that your renters and residents alike help build a wonderful community.
