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Stevet445, Home Buyer in Belmont Shore, Long...

I'm thinking of buying a condo in Long Beach, near the college and renting it out. Is there varying rules that allow it, or rules that require?

Asked by Stevet445, Belmont Shore, Long Beach, CA Mon Jun 6, 2011

it to Is there varying rules that allow it; or rules that require it to be owner occupied?

Help the community by answering this question:


The rules on renting out units is based on the specific CC&Rs (Conditions, Covenants and Restrictions) of each individual condo complex. Some complexes have no limits whereas a few have limits ranging from zero tolerance for rentals to more reasonable limits ranging from 25% to 50%. As a practical matter, even though a particular complex may not have a limiting factor in the CC&Rs, they will want to keep the rental ratio to below 50% as it is generally impossible to get financiing if their is an inverse ratio of tenants to owners.
Congratulations on considering buying a condo for investment purposes.
If you have any further questions or if I can assist you in anyway, please contact me.
Jack Nendel
RE/MAX College Park Realty
140 Linden Avenue, #280
Long Beach, CA 90802
0 votes Thank Flag Link Mon Jun 6, 2011
most condo's have long list of rules for the owners.. ect. and each one is different, some only owner occupied- or strick restrictions on subletting- also remember college students can't pay the higher rent when you figure in your added hoa's fee's ect to break even.. you might think more on 1- 4 units..if wanting to use for rentals instead of condo's but then..your talking $400,000 and up
0 votes Thank Flag Link Tue May 21, 2013
As mentioned by the other Realtors here, the answer depends on the operating rules and CC&Rs of the association. I agree 100% with Monica, it is also really, really important to make sure the condo complex is (a) solvent, and (b) eligible for FHA financing. As she says, even if you do not want to use FHA financing, more than 50% of buyers are now using FHA financing. So when it is time to sell, you will have a much larger pool of potential buyers. There is an old saying in real estate, "You make money when you buy, not when you sell." Basically, it means buy right and you minimize your problems in the future. Kind of akin to the business axiom of buy low, sell high.

As in any purchase, I recommend that you be approved for a loan so you know what your purchase options are. I am associated with Mark1Mortgage and we have 30+ banks that we work with. I am sure we can meet or beat any deal you currently have.

Good luck,
Gene Scott
ERA Buy America Real Estate
0 votes Thank Flag Link Wed Jun 8, 2011
Ask to see the CC&R's or call the HOA to find out about rental restrictions. Even if they don't have restrictions regarding rentals it's a good idea to find a complex with a low ratio of rentals to owner occupied units and be sure the HOA is solvent otherwise you will be hit with added HOA maintenance bills if the building needs repairs.

Since this is going to be a rental you also should think ahead and preserve the ability to sell. Exposure to the max amount of buyers is important which means making sure the unit will qualify for FHA financing. FHA buyers are the largest group of buyers in the market right now and may continue to be so depending on the market. In order for a buyer to use FHA financing the HOA needs to meet a minimum standard of financial solvency and a low ratio of rentals vs owner occupied units.

Good luck Steve445

Monica Hernandez
Bankers Realty Exclusive, Inc
0 votes Thank Flag Link Wed Jun 8, 2011
Hi Steve!
Like the other agents stated, it depends on the CC&R of that building. Long Beach has many options and right now the prices are extremely low. I actually just got a new listing in for 230K. 2bed/2bath that can be rented,renovated,. and it's in a great neighborhood. It would be best for you to work with a Realtor that can get you the most up to date information about the properties you are interested in. Please feel free to contact me at anytime. Good luck!!!!

Melissa McCrone Seidel
0 votes Thank Flag Link Mon Jun 6, 2011
Great question Steve, and even a better idea =) If you need any help with this, or any Real Estate related question, we live in The Shore as well and can be found most mornings at Starbucks or Peetes enjoying the best Long Beach has to offer in neighborhoods! (BTW - another great call on your part, living in BS. Dang, you're full of great ideas)

Anyway, best of luck!

0 votes Thank Flag Link Mon Jun 6, 2011
And the cc&rs do come in to play! Everyone complex does have their own rules.
0 votes Thank Flag Link Mon Jun 6, 2011
Hi Steve, The city of Long Beach doesn't have any restrictions, but individual complexes sometimes have their own restrictions, which would be noted in the CC&Rs (covenants, conditions & restrictions). Please let me know if there's a particular complex you're interested in and I'd be happy to help you find out whether it has any restrictions. Or if you want help locating a condo, let me know. If you check our website, you'll be able to see all available listings.
Web Reference: http://www.ShowMeHome.com
0 votes Thank Flag Link Mon Jun 6, 2011
All depends on the loan. If you are doing an fha loan, which many condo complexes are still for NOW, approved, it needs to be owner occupied. But if you put 20% down, you can do it as an investment. All depends on the loan and the lender. Talk to a direct lender and they will help you with this!
0 votes Thank Flag Link Mon Jun 6, 2011
Yes, Steve, there are rules. Most condo complexes have a certain percentage of units that can be rentals, the rest are owner occupied. The reason for this is to preserve the quality of the community. The idea is if too many units in a complex become rentals, the quality will go down, along with values. Also, in order for a buyer to get financing, there must be a majority of home owners over rentals. The rules are called the C,C & Rs. (Covenants, Conditions and Restrictions.) If I can be of further assistance, please feel free to contact me.

Nancy Cardena
Main Street Realtors
0 votes Thank Flag Link Mon Jun 6, 2011
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