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Protect Your Ability To Sell Your Condo: Make Sure your project has less than 50 % rented

If your condo complex has 50 percent or more rental occupied units, good luck trying to sell your condo.

By George Gombossy

www.ctcondonews.com

As the result of the recession and the millions of foreclosures, renting is safer and more affordable than buying for many.

But be careful, if you complex is starting to approach the 50 percent mark, your association might want to consider putting a freeze on allowing more unit owners to rent their condos.

As MarketWatch's Lew Sichelman   explains "Fannie Mae, Freddie Mac and the Federal Housing Administration all shy away from backing mortgages in condo buildings where half or more of the units are not occupied by their owners. That could change, either up or down. But for now, those are their rules, and these days the primary lenders who fund new loans play by those rules, to the letter."

In answering a readers question, he wrote "For that reason alone, I would be in favor of the bylaw change, even if you are not interested in selling at the moment. But there are other reasons to limit rentals."

"One is that values tend to fall in buildings where the majority of occupants are renters. Well, perhaps not fall, but apartments certainly don’t rise in value at the same rate as those in buildings where owner-occupants predominate."

You can reach The Watchdog at george@ctwatchdog.com and he will answer for free as many emails as he can. Please check out his site, www.ctwatchdog.com for comprehensive consumer, health, finance, shopping, nutrition, elderly issues, media, internet, computer, travel, auto, and education tips. And check out www.CtCondoNews.com for condo consumer news in Connecticut.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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