What does a 20 percent HOA rental cap actually do to a new buyer who intends to rent?

Ask the HOA's management company for a written rental status letter before your inspection period ends, and get it from them rather than the agent. What you want in writing is the current count of leased homes against the cap number, and whether there is a waitlist and how long it is. "Half the street is already rented" is exactly the answer that should worry you, because if they are at 22 of 18 allowed then someone eventually complains and the board starts enforcing. The 12 month minimum is usually the easy part, since most long term leases run 12 months anyway. The registration requirements are the annoying part, as some associations want the lease on file and charge a fee per tenant turnover.

Grandfathering varies by how the declaration is written and by state law on amendments, so the only version that matters is what a lawyer tells you after reading your specific documents. Whether an HOA can force a tenant out or only fine the owner is the same story, and neither the agent's word nor anyone's in this thread should settle it. One underwriting angle nobody has raised yet: the cap follows you to the exit. If you ever want to sell to another investor, a maxed cap shrinks your buyer pool to owner occupants, which can cost real money on the resale. And run the dues through your yield math. Dues of $180 a month are $2,160 a year off your cash flow before you have paid for anything else. What is the count actually at right now? If they are under the cap with room, this is a paperwork problem. If they are at it or over, the board's enforcement history is the thing to know before putting money in.