Fourteen months in the townhouse before I learned the HOA bans rentals

This is the exact gap I've been building a service around. Most buyers get a stack of association documents days before closing and nobody has time to read them, so they get filed unread. Reading them for someone and pulling out the rental provisions is a couple of hours of work against a five figure mistake. wren, did anyone at the closing table mention them out loud, or did they just slide across with everything else?

Been going back and forth on which strategy fits me and this post pushed me hard toward plain non-association houses. One less body that gets a vote on what I do with the thing I own.

The documents you want have names, and asking for them by name is what gets them produced early instead of at closing.

The CC&Rs, the bylaws, the rules and regulations, and the most recent resale or estoppel package the association issues. Rental restrictions can live in any of the four, and they can be amended after you buy, which is its own risk. What varies is who owes you those documents and when. Some states require a seller or the association to deliver a resale package with a review period attached, some leave it entirely to your contract, so ask a local closing attorney or your agent what the delivery rule is in your state and put it in the offer either way.

The questions I'd send the management company in one email, and I'd want the reply in writing:

Is there a cap on leased units, and what is the current leased count against it. How long is the waitlist today. Is there a minimum owner-occupancy period before an owner may lease. Is there a minimum lease term. Does a lease have to be approved, and what's the fee.

A management company will usually answer that in a day or two because they answer it constantly. The bit people skip is the current count. A 25% cap tells you nothing if 25% of the units are already leased.

wren, one more thing worth knowing for next time. "No short term rentals" and "no rentals" are separate provisions and a community can have both, one, or neither. Seeing the first one doesn't tell you anything about the second.

This is most of why I look at raw land. No association, no board, nobody amending the rules under me while I hold. The tradeoff is that land doesn't pay me anything while I wait, which is a real cost and I know it.

Nearly identical near miss on a condo three years ago. I asked the cap question because a friend had been burned, and the cap was full with a six name list. I walked and bought a small duplex instead. wren, you paid for the lesson I got for free off somebody else's story, so keep telling it.

The cap is a binary I underwrite as a yes or no before anything else, because no amount of good rent math survives a no. Where your money actually went, though, is the 14 month hold. Buying and selling a 250k house costs somewhere around 7 to 9% round trip once you count commission and closing on both ends, and 4k of appreciation doesn't touch that. The rental restriction created the situation. The short hold is what set the price.

I'd put the cause slightly differently than sextant. You moved out before you had the answer. The documents were sitting in your file the whole time and month 13 was late to open them. Same lesson runs for city rental registration, which is a municipal thing and differs town to town, and I've seen people miss that one after clearing their HOA fine.

wren, could you have rented out a bedroom and kept living there while you waited on the list? Or does the cap catch that too?

Adding "cap, current count, waitlist, owner-occupancy period" to the sheet I take to showings. I have a first purchase coming and I'd have made this exact mistake, because I also would have read "no short term rentals" and stopped there.

Running your numbers as a total, you were in for 12,915 of cash at the start, out with about 6,400 less than that plus 5,400 of doubled housing, so 11,800 all in against 14 months of living somewhere you presumably liked. It isn't nothing but it isn't a portfolio-ending number either. What I'd want to know is what it did to your timeline. Are you a year behind now, or two?

So the loan wanted you to live there twelve months and the association wanted twenty-four before you could lease. If you'd known, you'd have had to stay a second year in a place you'd already decided to leave. That stacking is what I didn't see coming when I read this the first time.

Four months of waiting on a nine name list was never going to be enough. Those lists move when owners sell, and that's a multi-year clock in most communities. You could have held it another two years, met the occupancy period, and been on the list with the cheap loan intact. Whether you could stomach paying 1,935 a month on an empty unit that long is a separate question, and most people can't.

I did look at the version where you lease it anyway and take the fine. Priced out the fines against the cash flow and then read further, and in some states an association can go after enforcement that ends with your tenant being told to leave, which would have made me the reason a family had to move. Dropped it. Not worth finding out how my state handles it with a real tenant in the house.

Twelve grand for a lesson you'll use on every purchase for the rest of your life. I've paid more for less. The only thing I'd be annoyed about is the loan you gave up.

No associations at all in the markets I look at, which is one of the few things going for 95k rural houses. Everything else about them is harder.

This is the version of the strategy I want, a plain detached house with nobody's board between me and a lease. Fewer parties who can change the rules while I'm holding. wren, thanks for putting the actual dollar figure in the post instead of rounding it into a shrug.

Did you price what renting your own place instead of moving in with your partner would have cost, versus the 5,400 of double housing? I ask because that's the fork I'd have gotten wrong too, and four months of waiting sounds like a decision you made in a hurry.

The question I'm writing into my own process from this is a phone call, not a document request. Call the management company before you write the offer and ask what the leased count is today against the cap. If they won't tell a non-owner, ask the seller to ask. Slow, and it costs nothing.