What type of rental community can work best for a landlord is this week’s question for veteran landlord, property manager and real estate investor Hank Rossi.
Dear Landlord Hank,
I am considering buying a nice two-bedroom single-story condo in a gated community with great amenities. The location is great too. The only downside I can see is that this condo is in a 55 and older community and you have to have a FICO score of 700 or better to live there. What do you think of this as a rental investment property?
-Potential Landlord Linda
In general, I try to stay away from communities that restrict the tenant pool.
You usually will have a much longer wait to rent your place and you could lose four to five months of rent while finding the applicant that fits the mandated age and credit score, even if you live in a “retirement” area.
I fell into this trap last year.
Found a great condo in a 55+ community, at an excellent price, with nice neighbors, in a gated community, in a popular location. I checked the zip code and 25% of the population was 65 years or older so I thought my chances of finding the perfect tenant, fast, would be very good.
I priced this condo well and started advertising. After awhile I was getting 10+ calls and emails a day, all from prospects that were too young for the development.
Finally I rented the property to a great tenant, but it took months. I would not recommend buying as a rental in an age restricted development. You also need to check HOA rules and regulations regarding rentals in whatever community you are buying into.
Sometimes there will be no home owners association, other times, the association requires tenants to apply and be screened by them and they have the power to approve or not approve your applicant.
Just do your homework, before you purchase, and know what limits and requirements you’ll have on who can be your tenant.