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Orginally, the point of Condos were they were real property. Board did not have to approve you to buy, no board approval needed when you sell and you could rent it out to whoever you wanted.
Coops which are popular in some places like New York City, had a long lengthy board process to buy and most restrict subletting, wont sell to investors and have all sorts of fees and restrictions on the use of your unit.. Therefore Coops always sold for less compared to a similar size condo.
Today I notice more and more Condos requires boad approvals to buy into one. Board Approval if you want to sell. Charge fees if you want to rent, some now restrict amount of units that can be rented and some now restrict winter or summer rentals and only want full time tenants. They also favor primary owners over investors.
But wait wasn't reason a Condo was worth more in first place is you could sell or buy it without board approval and can sublet it? Does this mean a Condo like this should not have a premium over a coop?
For folks who own condos what are you thoughts on folks renting out their units or selling to investors who plain to just rent them out. Do you want no restrictions, some restrictions or tons of restrictions. What would be the right amount?
There are lots of people to answer to these days...condo boards. Then there are condos that are part of a HOA. And there are management companies of HOAs which would include condos or managers of COA (condos).
About approval. It's a future financial survival thing.
So very very many bankruptcies last few years. Also inability to pay special assessments in areas where condos were a new thing in the 80s or so and are now really aging.
Rentals - over a certain percentage of units as rentals and a new buyer can't get some loans to purchase.
Over the decades in so many things...not just in real estate.... there are more and more and more laws thought up. And more and more and more ways to charge for things. Sublettors less likely to care for the place and neighbors being so removed from original ownership...make a law the place can't be sublet. Every little process...charge for it.
I disagree with your basic premise. I know of no condominium project in my region that was built with absolutely no restrictions on it. All condominiums that I know of were set up with by-laws, HOA's , etc. that limited what an owner could do with the unit. That included renting it out. The whole point of HOA is to develop conformity, not to create do your own thing.
If you want financing on a condo, lenders are looking for restrictions on the number of rental units and restrictions on investors in a complex. That is, most don't want to see one entity owning more than 10% of a complex and limit the per cent of rental units. Their money, their rules.
When a condo board wants to approve you, they are looking out for their bottom line. Mostly they want to
know about your credit worthiness to make sure you can pay the monthly condo fees. They may want to check to see if you are indeed an owner occupant. Fair Housing laws will keep them from denying people for other reasons. They really can't reject anyone, they can just exercise their right of first refusal to buy back a unit. Another question they may have is in regard to the type of financing a buyer may be using. Too many FHA loans in a complex may put the complex on an FHA exclusion list.
The condo board is simply trying to maintain the values of the units in the complex.
To answer your question-- If I was looking to buy a condo as a primary residence, I would prefer to see no tenants or investors in the complex. If I was looking to snow bird in FL for four months, for example, then I might look at a condo development built and designed with high rental possibilities in mind. In your case, maybe your just have to pick your location and complex carefully to do what you want to do.
I wouldn't include coops in your thought process. A coop is buying shares in a corporation. It's a different animal. When you close you get the equivalent of a stock certificate and a proprietary lease permitting you to use your unit. You don't "own" the unit.
I live in a condo now, which required board approval to move in. I am moving out next week into a new condo, which required all kinds of crazy fees to move in, but no board approval. they do seem to make things hard for the owners, and are trying to become more like coops (here in NY anyway). Coops are cheaper but the insane screening process makes me wonder why anyone would want to live in one.
It seems condos are trying to really restrict rentals. I guess they feel it brings the property value down.
I would never buy a condo, I do like renting them because they usually have better amenities than apartments (washer/dryer), etc....
My condo was built in 1979 at very early age of condos. There were bare bones offering plans. My condo has never updated the plan once since 1979 so it is an oddball. So we have zero rental rules and zero fees. In fact our only fees are maint and a 25 dollar late fee. There are no other fees or penalties.
My builidng is mostly primary owners. I rent but most people dont. And we dont have a single person who owns more than one unit.
I feel our days our numbered as lately bad people have started looking to buy Smokers, folks with multiple pets, folks who have roomates who rent etc At some point the benefits of no rules will outweigh the trouble no rules cause. For instance park your car in someone elses spot, throw your garbage on ground we never had finds or penalties buy now we may at one point need them
My condo was built in 1979 at very early age of condos. There were bare bones offering plans. My condo has never updated the plan once since 1979 so it is an oddball. So we have zero rental rules and zero fees. In fact our only fees are maint and a 25 dollar late fee. There are no other fees or penalties.
My builidng is mostly primary owners. I rent but most people dont. And we dont have a single person who owns more than one unit.
I feel our days our numbered as lately bad people have started looking to buy Smokers, folks with multiple pets, folks who have roomates who rent etc At some point the benefits of no rules will outweigh the trouble no rules cause. For instance park your car in someone elses spot, throw your garbage on ground we never had finds or penalties buy now we may at one point need them
Smokers and people with pets are bad? In my owner occupied condo you would be considered the bad people.
Condos and Coops are different. I don't fully understand the added restrictions and limitations of Coops.
I've been involved in the efforts of multiple condos to restrict 'flippers', short-term rentals, multiple pets, common area smoking, parking issues, etc.. These actions are typically 'after-the-fact' defensive measures taken to protect values and usually require owner vote/approval to change the by-laws. Board approval to buy is often stipulated, but, difficult, if not impossible, to enforce.
Renters are the biggest problem in many condos and, without some type of serious regulations, can quickly make a condo seem like an 'apartment complex or hotel' ... and seriously damage resale values.
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