Renters in Subdivision (Suwanee: apartment, renter, HOA)

[wilful]

I live in Suwanee in the Townsend Creek Subdivision and have noticed over the past several years a number of renters taking over houses that were previously occupied by owners. The neighborhood is still well maintained, in a good school district, and Suwanee gets high marks as a place to live and raise a family. We have about 270 houses in the subdivision and an HOA official told me we are now approaching close to 40 rental properties. I am getting a little concerned as to where this is all headed as I have heard that once you get above 20% rentals, the subdivision will begin to experience a decline in terms of appreciation, re saleability, and overall appeal. I know rentals are the new normal but am I right to be concerned? Any comments on this matter and or personal experiences will be appreciated.

[lorilove]

If they are taking care of the property, I would not be too concerned. We have about 20% renters in our subdivision but we do not have a HOA. In many cases, the renter is a step up from the original homeowner.

The problem I have with rentals in my neighborhood is that a few of the properties are looking SAD - they need a fresh paint job. The homeowner is under the water on the property and you find the homeowner taking short cuts in upkeep of the property. If your HOA will address this issue, you should be okay.

[10 feet tall]

Originally Posted by wilful

I live in Suwanee in the Townsend Creek Subdivision and have noticed over the past several years a number of renters taking over houses that were previously occupied by owners. The neighborhood is still well maintained, in a good school district, and Suwanee gets high marks as a place to live and raise a family. We have about 270 houses in the subdivision and an HOA official told me we are now approaching close to 40 rental properties. I am getting a little concerned as to where this is all headed as I have heard that once you get above 20% rentals, the subdivision will begin to experience a decline in terms of appreciation, re saleability, and overall appeal. I know rentals are the new normal but am I right to be concerned? Any comments on this matter and or personal experiences will be appreciated.

You are right, this is the new normal. Not everyone has to own a home to be a productive member of society.

[researchnerd]

It really is the new normal. I think the 20% number is outdated, especially post-recession. There are a couple of factors to consider:

1) As lorilove mentioned, in many cases, homes are underwater, and the owners can't afford to maintain them well. This is definitely the case with the house I'm renting now. The owner isn't a slumlord, she's just in a bad place financially.

2) Many current renters are former homeowners who are used to maintaining homes, and take good care of them. Evidently I am the exception rather than the rule, but I've been known to repaint, landscape, install flooring, and fence the yards of rental homes at my own expense.

You mentioned that the neighborhood is still well maintained, so I don't think you have any cause for concern. If you had a high percentage of vacant houses, that would be a problem.

[ATLTJL]

My neighborhood recently adopted a rule that only 5% of the neighborhood is allowed to be rental.

I think that's stupid and all it does is encourage people to rent under the radar. However, I would think that it could be legitimate for an HOA to require owners to run criminal background checks on anybody they wish to rent to and give the HOA right of refusal to any potential renter. If that's legal, and I think it is, because I lived in an apartment that did it.

Something like that would be way more beneficial than just setting some kind of arbitrary cap. After all, a neighborhood with 90% renters could have much better residents than an area with only 20% if those 20% are the wrong kind of people.

[lorilove]

Originally Posted by ATLTJL

My neighborhood recently adopted a rule that only 5% of the neighborhood is allowed to be rental.

I think that's stupid and all it does is encourage people to rent under the radar. However, I would think that it could be legitimate for an HOA to require owners to run criminal background checks on anybody they wish to rent to and give the HOA right of refusal to any potential renter. If that's legal, and I think it is, because I lived in an apartment that did it.

Something like that would be way more beneficial than just setting some kind of arbitrary cap. After all, a neighborhood with 90% renters could have much better residents than an area with only 20% if those 20% are the wrong kind of people.

I don't like arbitrary caps and I don't like a HOA requiring anything from a renter that they would not get from someone buying into the neighborhood.

What I do like is a requirement that the rental agreement include a basic level of lawn service to maintain the property. If the renter wants to save the money and do he work themselves then there should be something in the agreement that says the property will be maitained according to the HOA requirements etc.

Many of the renters in my neighborhood do an excellent job on their own with the property. But the few that don't typically see this as an owners issue and what you find is that the topic was never discussed between the two.

[wilful]

Thanks for all the input. It appears that this is not an isolated phenomenon but something that is going on throughout the metro area. Guess I'll just wait and see what happens and not over react to the increasing rentals.

[FromGA]

Not sure about percentages, but tons of rentals even in Johns Creek across the river from you.

Not a whole lot you can do about it any way.

[Humanista]

When my HOA instituted a 15% renters cap about 6 years ago, they mentioned that people were having a difficult times getting mortgages in communities with a large population of renters. I'm not sure if this is still applicable today as the banks have strengthened lending requirements.

[lorilove]

Originally Posted by Esperanita

When my HOA instituted a 15% renters cap about 6 years ago, they mentioned that people were having a difficult times getting mortgages in communities with a large population of renters. I'm not sure if this is still applicable today as the banks have strengthened lending requirements.

How would a bank or mortgage company even know how many homes are being rented? When I bought my house and each time I refinanced (2x) this information was never requested.

I can see a condo association requiring you to report this information, but do most HOA's require this information?