Homeowners' Associations add an extra challenge or two when it comes to renting out your Palm Desert home. This does not mean you should avoid them when you’re looking for an investment opportunity. Tenants often appreciate living in a community that’s managed by an HOA. Amenities are often provided, and there are sometimes landscaping services available.
For you, the HOA can be good news for your property values.
Navigating their rules and regulations can sometimes be complex, especially when it’s your tenant who is living in the home, not you. When it comes to violations and accountability, you’ll still be the one receiving notices and fines.
Effective management of an HOA rental property in Palm Desert requires a good understanding of the requirements and the regulations as well as an excellent relationship with your tenant, which includes good communication. If you’re working with a Palm Desert property management company, you’re in especially good shape. You can count on your property manager to ensure your tenant complies with all of the HOA’s requirements.
If you own a rental property governed by an HOA, you need to familiarize yourself with the Davis Stirling Act, which provides guidance on what HOAs can and cannot do when it comes to regulating your rental property. Outside of that, we have some tips on how to stay in compliance and create a great rental experience for your Palm Desert residents.
Understanding Your HOA's CC&Rs
Each HOA establishes its authority and creates its rules and regulations based on its Covenants, Conditions, and Restrictions (CC&Rs).
Think of these as the corporate governing documents for the entire association. It’s basically the rules that you must agree to when you purchase a property within the HOA. As the property owner, you’ll want to familiarize yourself with these even before you buy and then again before you begin renting out your property. They can dictate things such as the permissible alterations to your property, landscaping requirements, noise ordinances, and rental restrictions.
Check your CC&Rs before you begin advertising for a tenant. Share them with your tenants once they move in, highlighting any specifics that are relevant to the people who will be living in the home.
Compliance Versus Conflict
HOA regulations might seem to make it more difficult to rent out your Palm Desert property. Some HOAs may not permit more than one pet per property, for example (they are legally unable to prohibit all pets). Or, they’ll have a minimum lease term that you have to follow.
This can get confusing and time-consuming. To avoid conflicts:
- Read and understand the HOA bylaws: Knowledge is power, and knowing what's in the bylaws can prevent mistakes as well as violations and fines. Your property is an investment, and you want to make sure that you won’t be prevented from earning money on your rental just because it’s in an HOA.
- Communicate with your HOA board: Keep open lines of communication to ensure you're up to date with any changes in regulations. Make sure you’re receiving all emails, newsletters, and regular mail. Join any social media groups that are specific to your HOA.
- Inform your tenants: Ensure your tenants understand and agree to the HOA rules from the onset, to prevent breaches that could reflect poorly on you. Share any information that you have, and make sure that they reach out to you or your property manager if they have questions or find themselves receiving a violation or a reprimand from the association.
Renting Out Your Property Within HOA Guidelines
While HOA restrictions can often seem limiting, they generally exist to maintain property values and a high quality of life within the community. That can be a great selling point when you’re marketing your rental property and attracting tenants. Here’s how you can benefit from renting out your Palm Desert property within these guidelines:
- Leverage the amenities to attract renters who value the added security, community pools, fitness centers, or clubhouse access.
- Use the HOA's commitment to maintenance to your advantage by highlighting the well-kept surroundings and common areas. Curb appeal is a big part of rental property marketing, and when your Palm Desert property looks great thanks to the HOA, tenants will have a great first impression of the home.
- Ensure your rental agreement reinforces HOA rules, so tenants are clear on their obligations. Always include the HOA information and list of rules in your lease. Be available to answer questions tenants may have, and if there’s something you don’t immediately know, reach out to your HOA before answering your tenant’s question.
Staying Informed and Active in the HOA
Involvement in your HOA can offer insights and influence if you’re willing to serve on the board or volunteer on committees. While most real estate investors prefer to be hands-off, there’s an argument to be made that owners who stay involved will have a bit more leverage when it comes to their rental property and their tenants. Attend meetings to stay informed about the community’s pulse and if you’re not interested in becoming too involved, at least form strong relationships with some of the board members so you can have conversations when necessary.
Dispute Resolution and Avoiding Conflict
Think about how you’ll be willing to handle conflict with your HOA. Disagreements between rental property owners and HOA boards can arise. In such cases, it's crucial to address issues with diplomatic communication first. If disputes escalate, seeking mediation or legal advice may be necessary. Always keep detailed records of your communications with the HOA.
Always remain professional. When you’re renting out a property in an HOA, professional Palm Desert property management support can be even more valuable. We can act as a buffer between you and the HOA. We can also represent you and your tenant if it gets to the point where we need to push back against a violation or a penalty.
Owning a rental property within an HOA community in Palm Desert can make your investment property profitable. However, it’s important to navigate the politics of your HOA and remain in compliance with their rules and regulations.
We have found that this is easy to do when we’re armed with all the necessary information, and we commit to a responsive communication strategy with tenants.
If you need help with your Palm Desert rental property that happens to be in an HOA, or if you’re thinking about buying a property in an HOA, contact us at Xepco Properties.
