I would have to agree with what everyone else is saying about Section 8. I do like the fact that they know that they have a good thing going, so they do tend to stay out of trouble and keep the unit/house in decent shape. There is a yearly inspection and depending on the inspector, you usually fail during the first inspection. They get you for things you would have never thought about. They will give a list of failed items that are usually easily remedied. I also like the fact that the tennants stay for longer periods of time. My current tennant has been with us for 4 years and we just signed another 2 year lease with them.
The worse thing that I think can happen to an Condo HOA is probably not being able to pay water and insurance. There is a complex that I have been following and there are only 7 people paying out of 72 units. They have no reserves and owe $5K for a pumbling job. There is still a water leak that they cannot afford to fix. They have not paid the insurance and water for at least the last couple of months. The Management company quit this month and the HOA is on their own. As of a couple of weeks ago, the management company said that the water was to be shut off, but I don’t think that it has happened yet. I wonder what will happen if the water gets shut off. I also wonder what will happen if there is a fire or flood and they don’t have any insurance or money for repairs. Obviously there has not been any routine maintenance for awhile and the gounds have not been attended to. The pool doesn’t look bad, but I don’t think that is has been attended to either. Also the older of the 3 buildings needs a new roof from my observations (I am not a roof specialist, but it just looks really worn out). This complex has 9 units available and there are also 2 currently pending. They units available are 40K-70K below market for that area. I will continue to check in on this place because I think at some point in the near future the banks will have to unload these units. If enough people buy into this complex and pay HOA’s everything should begin to get better. I’m sure there will be a couple of special assessments due, but overall I think it will make for a good investment.
