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5 HOA Real Estate Investor Fast Facts

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Are you considering purchasing a Real Estate investment property within an HOA?

If so, you’ll face a number of additional issues and considerations. It’s important to enter into this investment with some knowledge of:

  • The advantages and disadvantages of investing in an HOA property.
  • How every HOA may be managed differently.
  • What’s covered in the monthly HOA cost?
  • What to do if you get an HOA violation?
  • Should you contest an HOA violation?

Learn about each of these issues in our 5 HOA Investor Fast Facts below.

Introduction | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, Nevada

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HOA Real Estate Investor Fast Fact #1: Advantages and disadvantages of investing in an HOA property

HOA Advantages and Disadvantages | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, NevadaHOA Real Estate Investor Fast Fact #1: Advantages and disadvantages of investing in an HOA property

Advantages of Investing in an HOA Property

You can rest assured that certain standards will be upheld in regards to the outward appearance of the neighborhood. No one is going to get crazy and paint their house purple or rebuild transmissions in the driveway. The HOA forces your tenant to pay attention to the yard. This helps maintain property values.

Disadvantages of Investing in an HOA Property

There is usually a monthly fee associated with an HOA and there is a chance you will get a love letter (violation notice) from the HOA if your tenant is not playing well with others.

HOA Real Estate Investor Fast Fact #2: Each HOA is Managed Differently

HOA Various Management Styles and Practices | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, NevadaHOA Real Estate Investor Fast Fact #2: Each HOA is Managed Differently

Some HOAs are super aggressive or impossible to satisfy and others just lay there. Generally, you can get the feel of an HOA by looking at the surrounding properties. If there are garbage cans out after garbage day and if there are few cars parked on the street, you can pretty much assume they are reasonable.

Reasonable HOAs are the best for rental properties. Why? Renters within an HOA do not have the same incentive to take the HOA rules and regulations as seriously as home owners in the HOA. If you’re a renter and you get into the bad graces of an HOA it’s much easier to move out and go elsewhere than if you’re the home owner. As a Real Estate investor it is YOU, not your renter, who is ultimately responsible to the HOA. HOA violations and actions are ultimately your responsibility, not your renter’s responsibility. HOAs that micromanage a host of strict rules will not be the best fit for some renters. So, try to stick to HOAs that are managed reasonably vs. strictly.

HOA Real Estate Investor Fast Fact #3: Understand what's included in the monthly cost of an HOA

HOA Rules and Enforcement | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, NevadaHOA Real Estate Investor Fast Fact #3: Understand what’s included in the monthly cost of an HOA

Common Grounds & Standards: The HOA takes care of the exterior walls surrounding the HOA, common plants, gates and/or pools. Some HOAs take care of the front yards of each single family house.

The most important component is enforcing rules of the community. Some person is on patrol driving around making sure standards are met. There is also a phone number neighbors can call to squeal on someone. Remember, if a neighbor squeals on your renter and generates an HOA violation, YOU as the homeowner are ultimately responsible.

HOA Real Estate Investor Fast Fact #4: Don’t ignore an HOA violation!!!

Ignoring an HOA Violation Notice | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, NevadaHOA Real Estate Investor Fast Fact #4: Don’t ignore an HOA violation!!!

Violations just don’t go away if you toss them in the garbage. You will just get late fees, and the late fees will grow! If you ignore the HOA violation long enough, the HOA can put liens on your property and bad things happen soon after. The good news is that most HOAs will give you a warning before they spank you.

If we’re managing the property for you we will, with your cooperation, have arranged to receive HOA violation letters directly.
Our goal is to cure the problem so you don’t get a fine.

We send the violation to the tenant and give them a few days to cure it. If they don’t cure the problem, we send someone out there to cure the problem and then bill the tenant. If the tenant doesn’t reimburse us, we evict them.

It is very very important that you pay the fine if you get one. We will then force the tenant to reimburse you.

HOA Real Estate Investor Fast Fact #5: You can contest an HOA violation, but don't count on it getting overturned!

Contesting an HOA Violation | 5 HOA Investor Fast Facts | Jim Eagan | Limestone Investments | Las Vegas, NevadaHOA Real Estate Investor Fast Fact #5: You can contest an HOA violation, but don’t count on it getting overturned!

It isn’t easy to contest an HOA violation. Standard procedure is to appear before the board and explain why the violation is not applicable. If you want us to contest the violation for you, we charge $100 to deal with it. It’s rare that a violation is overturned so you are better off just paying the violation unless it’s over $500.

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