[quote=HLS]If the HOA had raised your monthly fee instead of adding submeters do you think that you would be entitled to raise the rent for that reason alone ? (answer is NO unless it was in the lease)
What part of “water is included in the rent” that you put in to the rental agreement is confusing ?
It sounds like you bought a condo as a rental property, which is the worst type of property anyone can buy as a rental, and an even worse decision for a first time investor.
I can almost guarantee you that your monthly fee will never go down, and it will not stay the same, it will only go up.
Wait until you get a $500 or $1000 assessment for an HOA deficiency that you cannot dispute.
You cannot pass these on to your tenant.
HOA’s are ticking time bombs, often run by inexperienced people who think they know what they are doing, but really don’t.
If they had not done the submeters, they would have raised your monthly fee.
ALL HOA’s need money to maintain the complex and reserves and there are only a small group of people who MUST pay that money.[/quote]
Again, excellent post, HLS. I wanted to add that a condo owner can be subject to special assessments at the whim of a majority vote of its’ assn’s board members. For example, the Board might think the roof needs replacement (maybe it does and maybe it only needs repair). They could levy a $3K to $7K assessment for each condo owner … yes, even if it is a multi-story complex (NOT a “townhome” where each unit has its own roof). They are more likely to do this for a needed expensive repair/replacement if they have many (uncollectable) small claims’ judgments for delinquent dues and they don’t wish to foreclose their liens.
Unfortunately, most people who buy condos do so because the price “seems” better than a SFR and do not and will never have the money to pay a “potential special assessment” sitting in their bank accounts with 60-90 days notice.
Liens are placed by a condo assn on units in which those special assessments are not paid. Assns do NOT have to get a court judgment to place these liens! They can simply specially-assess the units within the assn and wait a period of time to be paid by the owner before filing a lien for nonpayment. As these liens sit filed for years unpaid and unreleased, their face value accrues 10% per annum interest.
Slightly OT: The ROI is NOT better on lower-priced condo-rental investments vs lower-priced SFR rental investments, nor do they necessarily have less closing costs, IMO. I think the reason they are preferred by some for rental investments (over SFR’s) is because most SFR’s in the same price range as a nearby condo need a little work on them before placing tenants in them at optimal market rent. Putting $2 to $8K into a recently purchased rental SFR and doing most or all the work yourself in order to place a market-rate tenant in it is a far wiser decision than buying a condo, IMHO. Those who have claimed it takes $25-$40K to fix up a <1600 sf rental house for future tenancy are quoting from what THEY would prefer it have if THEY lived in it. All tenants know what they can rent for their price point and preferred location. What tenants are used to for their rental price range and what owners prefer to live in are often two different animals.
Obviously, if a potential investor only wants to invest in "professional white-collar areas," then he/she will likely not be able to get an ROI on a SFR in those areas. Those owners who have a portfolio of well-acquired rental houses in working class and retired areas are the ones whose net worth will continue to increase in the long haul throughout their working and retirement years, IMHO.
