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Why Do Condos Ban Rentals?
Question: Why do many condos ban rentals?
Answer: Many condos ban rentals because a large percentage of rentals can reduce the value and marketability of all units. When lenders see a condo property where at least 30 percent of all units are rented, they look at the entire property and define ALL units as investment real estate. Unit owners now have a problem. Real estate financing with little down is readily available for residential real estate. But financing for investment property often requires 20 or 30 percent down. With a requirement for a large down payment up-front, the demand for condo units is constrained -- and so are prices. To avoid being tagged as "investment" real estate, and to avoid tough financing standards, condos often ban or restrict rentals for the benefit of all unit owners. For this reason, it is important to ask about rental policies when considering a condo purchase.
© 1997 Peter G. Miller. All Rights Reserved.
Written by Peter G. Miller.
© 1997 Peter G. Miller. All Rights Reserved. Rules, Disclaimers & Notices.
Copyright © 2012 Realty Times. All Rights Reserved.
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