Renting out a condo can be a very complicated if not impossible. You have to deal with board members, a site manager, and other residents. In addition, monthly dues can be very expensive consequently making renting out a condo not very lucrative. However, condos can often serve as great rental properties, and there are an estimated 4 million condo rentals in the United States. However, the key to making money off a condo rental is choosing the right condo. According to NOLO there are several things you need to consider if you plan on renting out your condo or purchasing a condo as a rental property.
Review policies, declarations, and bylaws of the condo association
If you are going to buy a condo to rent it or you own a condo and your thinking about using it as a rental, then, you need to check whether the condo association allows rentals and if so under what conditions.
Check Owner-Occupant Levels
Federal law and association rules may require that the owners occupy a certain amount of condo units within a community. Therefore, it is recommended that if you are looking for a condo as a possible rental, then you need to ensure the community has the ideal owner-occupant ratio of between 60-70%. This ratio is generally perfect (depending on association rules) because it means there is plenty of room for you to rent out your condo and be within the owner-occupancy rule. Furthermore, if 30-40% of the community's condos are used as rentals then the practice is accepted and popular in that community.
Research the Condo Association’s Financials
A condo association takes care of external maintenance and upkeep. To pay for maintenance, upkeep, and general project costs, condo associations use financial reserves designated for larger projects and or require residents to split the cost on top of monthly dues. If the condo association is not run well, there may not be any significant financial reserves. If a condo association does not have substantial financial reserves then every time a major issue needs to be fixed the money will come out of your pocket and cut into your rental property profits.
If you are thinking about renting out your condo or purchasing a condo as a rental then you need to review whether or not it is financially feasible. If you are renting out a condo you need a property management system that can handle the specific needs of your rental property. RISSOFT Management Property Software has property management features that are specifically designed for those renting out condominiums. Making a profit on any rental can be difficult especially without the proper organization and administration capabilities that RISSOFT’s affordable property management software has to offer.
This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.