Do People Ever Really Own Their Home Anymore?

[justbroke]

But even investors are having a hard time in HOA's as the HOA's are allowing less and less rentals in the neighborhoods. If the investor plans on selling right away it doesn't matter but those that want to rent out houses are in trouble.

An "investor" that has not read the CC&Rs, just as any individual who buys in an HOA, deserves exactly what they get. This is a contractual issue. Nothing more. When everyone gets "that" it a contractual issue... maybe they'll read. If you don't like the terms of the contract, then you don't sign the contract.

Real investors don't plan to sell right away... that defines a flipper. True investors understand the area, the rental market, the CC&Rs, and the value. Right now, HOAs are desperate not to have empty homes not paying assessments. In fact, COAs/HOAs in Florida that have foreclosed for assessments and obtain rights to the property, end up renting the property in order to cover the assessments. The typical owner to renter ratio is 6:4 in most COA/HOAs or about 40% renters. The problem is not that HOAs are restricting the number of rentals; they have always restricted the number.

(There are some "interesting" investors that are more predatory. They buy these COA/HOA foreclosures, rent the property, and just wait for the bank to foreclose. In the interim, they hope to make back the money spent to buy the HOA lien at the foreclosure, and make a little extra. I'm not sure these are real investors and COA/HOAs may be duplicitous in these schemes.)

Pretty simple stuff. You either like it or you don't. I am fortunate to live in a moderately well-run HOA (and COA since we have condos as well). It is managed by an outside management company. It does not look like ANY typical Florida master planned community. The streets are 18' curb-to-curb with parking on both sides. Detached garages on most single-family homes. Cozy neighborhoods. Trees galore (it was a wooded area). neo-traditional design with homes that have a more colonial appearance.

Other than just having to re-paint my mailbox... they have only once ever sent me a violation in 9 years. The last one (in 2006) was for dead grass in the easement. I'm sure that others have or have had significant issues, but I have absolutely no problems with and in my HOA. We have a mix of housing, renters, shopping, restaurants, dog parks, people parks, and the obligatory HOA/COA pools, tennis courts, soccer fields, and recreational facilities.

I digress. The original topic was about a municipality acting as an HOA and not about HOAs specifically. For the topic at hand... I own my home. While I can't paint it neon green or leave a car on cinder blocks in my front yard, I'm happy.

[Lilyat108x]

My old HOA just recently made rental restrictions. Too many houses sitting empty for that. There are ways around the restrictions. The investor can owner finance the property, put the property in a trust or put the property in an LLC.

[justbroke]

The HOA boards don't care so much about empty properties as much as maintenance fees and upkeep. There are many HOAs down here in Florida that are comprised almost entirely of snowbirds that are absent 8 months of the year! I visited one and it was like a ghost town, but so well maintained. The HOA maintained the landscaping of the single family homes and did keep the place looking pristine. (And, it wasn't an overpriced community either, although gated and with a very good gym, pool, and community center.)

It does come down to management, and just like some very corrupt towns across the U.S. -- remember Hampton, Florida! -- we do need to understand where we are living.

[TXskyblue]

You are right that it comes down to management. I know people who live in HOAs who say "yes, HOAs can be despotic but we have really good people on our board." That works as long as you have good people on the board, but I think many with first-hand knowledge of HOAs will attest that HOAs are attractive to harsh, arbitrary, power-hungry people. Your HOA has tremendous power (that you granted it) and when, not if, the wrong people are elected to the board, you will suffer.

It is inevitable.

[justbroke]

The real problem, is a people problem. You certainly hit the nail on the head when you write that a good HOA requires "good" people!

An HOAs "goodness" may, in fact, be directly proportional to the relative socioeconomic status of said HOA.