Strategize Your Investment Before Investing in Your Strategies

By Holman Valdez

The immediate or future intent of investors, vacation home residents and even full-time residents might be the option to lease their homes if the need arises. Do you think it's possible to be restricted from renting your home either seasonally or yearly? You own the property so why shouldn't you be able to fully control how the home is occupied. Well, beware because renting your home may be forbidden.

Many areas throughout the United States, especially in more populated areas have Homeowners Associations. These HOA's have rules called CC...R's (Covenants, Conditions ... Restrictions). You have an obligation as a homeowner to abide by these rules and regulations. These rules and restrictions mandate how you as the homeowner can use the property.

Surprising enough there are guidelines as to what percentage of grass you are allowed in the landscape, the colors and trim on your house and even your window treatments. Review and thoroughly read the CC...R's before purchasing a home. You are usually given a certain time frame to review these documents and will have an opportunity to cancel your contract.

Some CC...R's restrict owners from renting their homes. Some rules state that the property cannot be vacant for any length of time. Most homeowners are aware of the restrictions. During the real estate boom in 2004-2005 many new home builders would not allow someone to buy a home unless it was their primary residence. Even though many homeowners were aware of their responsibilities, the housing crashed left the homeowners no other choice but to break some of these rules. Of course, it was unintentional.

People's perception of rental properties usually relates to higher crime rates, declining property values and un-kept homes. Although this is the assessment by many, it is not true in most cases. In the current housing crisis the foreclosures and bank-owned properties are portraying a worse image.

With the declining Real Estate market and more homeowners considering renting their homes, we are starting to see Homeowners Associations attempting to amend their CC...R's to include rental home restrictions. Many people believe that CC...R's cannot be amended. Amendments happen regarding all sorts of rules and regulations. Can this be true for rental properties too?

When we agreed and signed the purchase agreement on the home, we also agreed to abide by the Homeowners Association Rules and Regulations. Well, that is just fine and dandy, but can the HOA's now change these rules midstream?

Although somewhat difficult these amendments to the CC...R's are realistic and can be done. Take these factors and considerations to heart when purchasing a home. Your investment strategy decisions could weigh differently in the short and long term.

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