[quote=sdsurfer]…Worst investement? Even if it cash flows and is in a great area where the rents tend to stay high and most people do not ever want to leave?

Monthly fee will never go down…I know that, but would’nt rent go up…increasing my cash flow or increasing my own reserves toward future mainteinance of the property?

Special Assessment…would’nt that be a write off?

Ticking time bombs…Are they all inexperienced? I’ll agree that some boards are sub-par, but I believe 4 out of 5 board members in the community I’m thinking of live in the community and have for over 10 years. I would think that qualifies them.

Only a small group to pay the fees…would’nt spreading the cost of a new roof over a number or owners be better than having to pay the entire expense yourself?

I really just like the idea of critically thinking for yourself to make your own decisions…[/quote]

sdsurfer, unless the roof leaks and is beyond repair, it likely doesn’t need replacement. I don’t currently own any rentals but have in the past and would prefer to “critically think for myself” whether my propertie(s) actually need new roofs (or not). The same can be said for any other repair/replacements that condo associations specially-assess their owners for.

My posted opinion was based upon the presumption of a property owner’s right to control all aspects of his or her property. This is impossible (and also illegal) with the presence of an HOA in the mix.

As a landlord, I wouldn’t want to be told what to do (within reason) and/or how to manage my property. I wouldn’t want to be fined for the children of my tenant repeatedly chasing a ball through a garden on assn land. I realize a city/county has the right to zone the use of my property and could cite me for high weeds, excessive “storage” of junk visible on my property (both visible from the street) or failure to evict well-known local narcotics dealers. But as a landlord, that’s all the “control” I’m willing to concede to someone else. It’s hard enough managing one’s own rental property without another layer of bureaucracy in the way costing a fortune and untold headaches for a LL.

If my smallish rental SFR needs a roof, I am free to critically think for myself to choose T-lock shingles and have the entire job done for =<$5K in the absence of a HOA. I am free to use cheaper landscaping and fencing than a typical HOA would use. I am free to hire my bro-in-law to roof the place or even do the job myself. I am free to cut a deal with a tenant to maintain the landscaping for a rent credit. The law and local custom does not require or force me (due to what tenants expect in the local SFR rental market) to pay ANY utilities for them, have ANY personal utility accounts open for that property in my name or even have them turned on prior to a tenant's occupancy! Not so with condo rental properties. As an "investment owner," many of these freedoms are taken away from you and relegated to the condo assn board (who often have wildly diverging levels from one another of expertise, knowledge of property mgmt law and motives for choosing to be board members). Unlike a detached SFR, when in escrow for the purchase of a condo property with shared walls, a buyer's inspector is often only able to do a limited inspection of the areas he/she can access and issue a limited report as it applies to the inside of an individual dwelling unit. If you, as a buyer, haven't done extensive due diligence on a complex, you can easily get stuck with one which has litigated over construction defects in the past or even distant past, its assn prevailed in suit and those defect(s) are still present today. Just because each owner at one time received lawsuit proceeds to fix the defects in their individual unit/PUD, this in no way means that they used these funds for that purpose or even made any repair(s) at all! There are many, many complexes around the county which have prevailed in construction defect lawsuits even 25-40 yrs ago where only a fraction of the units were actually fixed.

No matter where its locale, the value of a condo owner’s property is entirely dependent upon the quality of each owner’s current and future tenants, the decisions of their current and future board members, how economically the assn’s management company is able to get the required and necessarily regular and periodic maintenance done and keep ALL the dues collected and how well the original developer’s construction methods hold up over time. Condo-unit occupancy (both owners and tenants) turns over faster than SFR occupancy but I don’t know by how much.

You state you have a rental unit in Encinitas and that “everybody wants to live there.” Even if a tenant is living exactly where they want and need to (for work commute purposes), they often move next door or down the street for a better rent deal or upon notice of a rent hike. They do this because they CAN, far more easily than an owner-resident. IMO, it doesn’t matter where the rental property is, whether Del Mar or Lomita Village, tenants will always periodically price what they are renting against similar rentals in the same area and adjacent areas. When rents get too high for them in one area, they often move to an adjacent area with lesser rents. In small condos, tenants usually don’t have much to move or as many utility accounts so moving isn’t such a big deal. As a LL, you must be intimately familiar with your own rental market, i.e. what tenants expect to live in there for the price they’re willing to pay for it. Proximity to the beach is only so desirable for most tenants until the rent level is no longer sustainable.

Any monthly fee hikes or special assessments a HOA imposes on an investment owner has nothing to do with the desirability of their unit to prospective tenants OR the monthly rental amount they’re willing to pay.

For $300 month (typical HOA dues amt), I could get load up nearly an entire pickup bed at Home Depot or from a craiglist ad with all kinds of things to make my rental SFR more marketable to tenants and do the work myself or have it done cheaply. But I would only have to do this periodically between tenants or when something critical breaks, not every month!