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How to Rent out A Condo

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photo by Tokyodcs

Realtor.com quoted me in How to Rent out a Condo: Watch out! It’s Not the Same as a Home. It opens,

How to rent out a condo: This may seem like a simple question, but if you own a condominium, you probably know it’s actually rather complicated.

For those who are foggy on what a condo is, let’s start with the definition: It’s a home, typically part of a larger building, that comes with shared common areas such as yards and garages that are maintained by hired help, rather than by individual owners. This makes condo ownership a breeze, by comparison with the labor involved in maintaining your own house, and you pay for that convenience in condo fees.

This more communal living arrangement, however, also means that you can’t just rent out your place whenever the whim strikes. In the past, condominiums were pretty flexible about allowing unit owners to rent out their homes. In recent years, though, condo associations have become a little more restrictive, according to David Reiss, professor of law and academic program director at Brooklyn Law School. Here we break down everything you need to know about how to rent out a condo.

Step 1: Read your condo association’s governing documents

Every condominium is different, but they all have one important feature in common: Owners are subject to a set of rules established by the condo association and upheld by the Board of Directors. Some do not allow for renting as an option. Review your condo association’s bylaws, and/or rules and regulations, to understand the existing policies regarding renting out units.

Step 2: Know your condo association’s restrictions

If renting is allowed, there may be limitations on the length of the lease term—including minimum and maximum times—and on whether pets are allowed. Also look into whether or not renting has been an issue in the past, which could give you a crystal ball into your future. “Review board meeting minutes to see if any new policies are being discussed that might impact your plans,” says Reiss.

Another potential renting deal-breaker to be aware of is that some condominium associations allow only a certain percentage of total units to be rented out at any one time. Check to see if the current ratio of rented to non-rented condos will accommodate your unit. Keep in mind that some associations only allow renting after an owner has lived there for a minimum period, usually two years.

Millennials and Luxury Housing

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photo by Jeremy Levine

The Phoenix Business Journal quoted me in Avilla Homes Finds Millennial Niche in Luxury Rental Market (behind a paywall). It opens, 

As home ownership rates declined in the past decade, more and more people have opted to rent homes. This provided a niche market for young professionals: luxury rental home communities.
Arizona-based NexMetro Communities has developed Avilla Homes, which COO Josh Hartmann calls a “hybrid between single-family living and apartment living,” with communities in the Phoenix and Tucson areas, as well as recent expansion into Denver and Dallas suburbs.
Hartmann said the draw of Avilla Homes is it is a unique hybrid: providing the feel of living in your own house without the responsibilities of being a homeowner. It incorporates some aspects of apartment living, such as on-call maintenance, but focuses on the draw of living in a single-family home, such as four-walled individual units with one’s own yard space.
“I think (owning a home) is less of a draw for investment’s sakes and if you take that away, owning a home is a lot of work,” Hartmann said. “You have to be constantly fixing things. What the real draw of our product is that you don’t have to worry about all those things but you still get to live in a home.”
When the project first began in Tucson in 2011, the board of directors thought its main consumer would be people who lost their homes in the recession and were looking to rent. But the project ended up being a success with an unexpected demographic-the millennials.
Hartmann attributes millennials’ attitude toward homeownership and how they spend their money as a factor in the communities’ success. He estimates that about 65 percent of Avilla Homes’ customers are early in their career, between the ages of 25 and 34.
“I just think what they want to spend the dollars they make on is different than what my generation or the generation before me did,” Hartmann said.
David Reiss, a professor of law at Brooklyn Law School says lifestyle changes coupled with the recession caused many people to turn to renting. The nation’s home ownership was down to 63.7 percent in the first quarter of 2015 from about 69 percent in 2004, according to census data.
“Another piece of it is kind of long term trends: Household formation, student loans that millennials have, another thing is income and job security,” said Reiss. ” A lot of things people have in place before they want to be a homeowner are not in many households.”