Today we’re talking about the things you need to know when you buy an HOA property in the Phoenix area.
The HOA communities in Phoenix are often the best looking neighborhoods in town. They make great investment properties and I love buying there myself. Not everyone is going to want one, but the neighborhoods are usually better and you’ll be able to attract some great tenants. The benefit for the tenants is that they don’t have to pay the HOA cost – you do. Make sure you keep that up. Don’t put the payment of HOA dues on the tenant because if they miss a payment, that will really mess up your relationship with the HOA. Instead, you can factor those HOA charges into the cost of rent.
Before you buy, make sure you understand how much your HOA membership is going to cost. This monthly cost will have an impact on your cash flow. This is especially important when it comes to townhouses and condos. You want to know what you’re getting in exchange for those HOA fees and whether the cost is worth it.
In Arizona, the myth that you can’t rent in an HOA is old and untrue. They can’t keep you from renting out your property, but they may have some restrictions. They might have your tenant fill out a form with their contact information. There might be some additional paperwork for you, and some HOAs want to do their own background check on your tenants. Be prepared to provide this information. Some HOAs designate a percentage of the neighborhood that can be occupied by renters. So if only 15 percent of the neighborhood can be rentals, you want to make sure you will be able to rent out your home. Call the HOA and ask if they need anything from you. They’ll let you know if the 15 percent maximum has been reached. You’ll also need to find out if there are any restrictions on the signs that can be posted. Confirm those requirements and talk to the HOA about gate codes, too. We usually do a temporary gate code for prospects and then we have tenants moving in establish their own gate code.
Get to know your HOA rep. A good relationship will make a big difference in your investment and the success your tenant has in the property. Please contact us at HomeQwik Property Management if you have any questions about HOA properties in Phoenix.