Sunday, June 08, 2008

Can You Rent Out Your Chicago Condo?

Several recent real estate dealings of mine in Chicago got me thinking about rentals. Can you rent out your condo? If you don't know, you either didn't work with a Realtor or your trusted agent didn't help with due dilligence.

As we speak, I've sold a client's condo in East Lakeview to an investor buyer. My client decided not to rent it out herself and listed her place with me. But she knew that the by-laws of her condo association allowed her, or a new owner, to rent the condo out. You must simply follow the association rule governing renting the condo out. East Lakeview is a great place to own a condo and rent it out. The demand is very high from young professionals and artisits to live near Lake Michigan and local retail.

The buyer's scrutinized the fact that the condo association allows rentals... even though it was written in black and white. We also furnished statements from the management and the Board President. Of course, this COULD one day change... but there is a huge process. The Board has to put a by-law amendmant on the agenda, give owners ample notice of a vote, and OWNERS have to pass it on a super majority. I don't want my option to rent my condo restricted. How about you? Its tough to amend the by-laws in most cases.

Here's a piece of legislation via that I'm for. It may limit stingy condo associations from restricting owners from renting units out in their building.


Anonymous said...

I have two big problem with the legislation.
First it negates the idea that owners run the association and replaces that with the concept that the association exist to be run by the government.
Second it assumes a one size fits all solution. Something impractical giving the wide range of condominiums in the state.

I have specific problems with two of the proposals set a minimium percentage of rental units and exempting current owners. Both create two classes of owners. In the case of rental percentage once the limit is reached no one else can rent their unit. Leaving some owners free to rent and others prohibited. Similiarly with allowing existing owners to rent, but not new owners.

I see no unfairness with allowing it to be controlled by the declaration and bylaws. With a little due diligence you can determine if you can determine the rental rules before purchase and decide if they are appropriate and acceptable. If not, there are numerous condominium in the state, find one that you like.

Eric Rojas said...

Thanks Ed... I'd rather not have the restrictions and agree with your "two classes of owners" analogy.


Anonymous said...

I live in a 30 unit building in another popular Chicago neighborhood and we are getting close to the point where renters outnumber owners. It has changed the community and we have to deal with a lot more problems as a result. Not that I don't like keggers and people throwing up in the hallways, leaving trash and generally disrespecting the property. Hey, who doesn't like that! It begins to feel like those of us who live here are babysitters for the renters. Most renters are not like that but it's just a fact that renters don't really care about the property that much because they have no ownership and property maintenance costs doen't affect them. I know because I was once a renter myself, that's just the reality of it.

I agree with you about 2 classes being bad - we face that issue here. I'm almost to the point where I would vote for no renting allowed. However I'm worried that would have an even worse impact on the sale value as well. Unfortunately it's not a simple situation.

Maybe a solution is that if you rent you have to pay a percentage of your profit to the association for the general wear and tear that is expected as well as babysitting and general problems?