Arizona
My husband and I recently purchased rental properties in Arizona. We were told by the real estate group that there was a requirement in place that newly-built homes be owner occupied and that if we intended the property as rental-income property, we must purchase "used" homes. (I've not determine who set this "rule," be it the builders or HOAs, but I do know that not all of the communities in the area have that rule. I've made a few phone calls and expect to have that answer today.)
I understand that there are multiple incentives in listing a property as owner-occupied, chief among them: lower interest-rates.
We played by the rules. We purchased used-properties, from original owners, so that they could then be turned into rental-income properties.
I now have my properties advertised for rent. As I look over the other rentals in the area, I see that there are many "brand new" homes advertised for rent in the same communities where we purchased our properties. Some are priced higher, some are priced lower, and one owner has undercut the market entirely.
I decided to research those "new homes" that were listed and found that a large number of the homes had been filed with the County Assessor as "owner-occupied residential" and yet these brand-new empty-homes are now being advertised as rental property. (They were built in 2004 and purchased at the end of 2004 or the beginning of 2005.)
In addition to those homes listed as owner-occupied, quite a few are listed as "vacant land". It was interesting to see the rental ads that pictured those lovely vacant houses on that land listed as vacant.
In the homes that I have researched, the owners of the "vacant land" that now have vacant homes for rent were: 3 builders, 1 construction company, and 2 individuals.
I'm assuming that the builders don't have to change the description with the assessor until the property is sold, but would like to know when vacant becomes residential.
My general motto is "live and let live" and yet I now find myself in an interesting position: I played by the rules and purchased property that was always intended to be rental-income property. I am now competing for renters with homeowners who have played a game to lower their interest, and receive no telling how many other incentives, and I am seemingly losing.
I am losing money, monthly, because my "used" home is less attractive than the "new" home that is renting for a similar price. I've reduced the rent as much as I can, but clearly would like to at least earn the mortgage and monthly fees out of the rental price. Yes, it was great to know that I took a $6K loss on the properties last year, but I'd rather be at "break even" on a monthly basis.
I know that this is not a new issue, but it is new to me.
What do you suggest that I do?
My husband and I recently purchased rental properties in Arizona. We were told by the real estate group that there was a requirement in place that newly-built homes be owner occupied and that if we intended the property as rental-income property, we must purchase "used" homes. (I've not determine who set this "rule," be it the builders or HOAs, but I do know that not all of the communities in the area have that rule. I've made a few phone calls and expect to have that answer today.)
I understand that there are multiple incentives in listing a property as owner-occupied, chief among them: lower interest-rates.
We played by the rules. We purchased used-properties, from original owners, so that they could then be turned into rental-income properties.
I now have my properties advertised for rent. As I look over the other rentals in the area, I see that there are many "brand new" homes advertised for rent in the same communities where we purchased our properties. Some are priced higher, some are priced lower, and one owner has undercut the market entirely.
I decided to research those "new homes" that were listed and found that a large number of the homes had been filed with the County Assessor as "owner-occupied residential" and yet these brand-new empty-homes are now being advertised as rental property. (They were built in 2004 and purchased at the end of 2004 or the beginning of 2005.)
In addition to those homes listed as owner-occupied, quite a few are listed as "vacant land". It was interesting to see the rental ads that pictured those lovely vacant houses on that land listed as vacant.
In the homes that I have researched, the owners of the "vacant land" that now have vacant homes for rent were: 3 builders, 1 construction company, and 2 individuals.
I'm assuming that the builders don't have to change the description with the assessor until the property is sold, but would like to know when vacant becomes residential.
My general motto is "live and let live" and yet I now find myself in an interesting position: I played by the rules and purchased property that was always intended to be rental-income property. I am now competing for renters with homeowners who have played a game to lower their interest, and receive no telling how many other incentives, and I am seemingly losing.
I am losing money, monthly, because my "used" home is less attractive than the "new" home that is renting for a similar price. I've reduced the rent as much as I can, but clearly would like to at least earn the mortgage and monthly fees out of the rental price. Yes, it was great to know that I took a $6K loss on the properties last year, but I'd rather be at "break even" on a monthly basis.
I know that this is not a new issue, but it is new to me.
What do you suggest that I do?