If you are considering buying a house that is part of a homeowner's association (HOA), there may be several challenges you may face that you wouldn't have when buying a house that is not part of an HOA. It's important to realize that homes with HOAs are great options when the HOAs are well-managed, and one important aspect of an HOA you should look into is the rate of owner occupancy. Here are a few things to know about this important factor.
What do owner-occupancy rates refer to?
Owner-occupancy rates refer to the ratio of how many homes are owned and lived in by homeowners versus tenants. Tenants are people who rent the homes in the community, while the homeowners refer to people that actually own the houses and live in them.
Why does this matter?
The owner-occupancy rates of a community with an HOA matter for several reasons. When all the units are occupied by homeowners, it is viewed more favorably by lenders and by the people that live there. This is primarily because people who own their homes tend to care for them more so than people who rent. When a community has mostly renters, the community may suffer. The renters may fail to take care of the homes they live in, and this can lead to a loss of beauty and tidiness in a community.
What effects can this have?
If you are going to buy a house in a community with an HOA, you should make sure the owner-occupancy rate is at least 51%. If it is not, you might run into problems getting a loan. Lenders always ask about this when they offer loans for homes with HOAs, and you will have to find this out before you buy the house.
The other thing to consider is that if you do get a loan and buy a home in a community that has a low owner-occupancy rate, you might experience problems when you try to sell the house. A buyer might not be able to get a loan for it, and buyers might be worried to make offers when there are a lot of renters in the community.
When an HOA is managed properly, the owner-occupancy rate is usually fine, but it is something to ask about. To learn more about HOAs and the homes in these communities, contact a real estate agent in your city today, such as J & N Realty, Inc.