Purchasing a home in a 55+ community can be a great investment. Whether you’re planning to occupy the home full-time, seasonally, or rent the home as an investment property, you’ll find many attractive features like onsite amenities, desirable locations, and adjacent recreational opportunities for 55+ adults. For many homeowners, these are attractive properties that present an opportunity for secondary income. However, the big question is, can you rent in a 55+ community?
This is a question we get a lot from prospective homeowners. The short answer is: It depends on each unique community. Owning a house in a 55+ neighborhood does not automatically preclude that home from becoming a rental property. However, homeowners should be mindful of common homeowners’ association (HOA) bylaws and regulations that may impact this option.
The Basics of 55+ Communities
What exactly defines a 55+ community? For many active adult residences, these communities are distinct in offering more than a simple rental experience. Residents enjoy resort-style living with convenient onsite features like pools, golf courses, spas, trails, and parks. These communities seek to maintain a quiet and peaceful neighborhood character, built on shared values and commonality between residents. Based on these criteria, the HOA enforces rules to preserve the community’s culture and ensure compliance with federal housing authorities.
In most 55+ communities, the typical rule is that 80% of occupied homes must be occupied by at least one resident who is 55 or older. This ensures fair housing laws are upheld while preserving the character of these communities as retirement spaces. What this means for rental units varies by community. It’s always best to reach out to the HOA directly if you are scouting communities specifically for homes that can be rented some or most of the year. This is where our team of 55+ realty experts can help guide your house hunt.
Can I rent out a 55+ community property as a leased unit?
If you’re preparing to rent a home in an age-restricted community, a few basic steps can go a long way in securing approval. Typical rules and ordinances you may encounter include age stipulations, length of lease requirements, limits on the number of rental units per community, and the requirement to get HOA approval on qualified tenants.
The first step in the rental agreement process is to review the specific bylaws and set a meeting to discuss any questions with your HOA. If you’re an investor, be sure to thoroughly review any rental cap policies that discuss the number of homes that can be rented out to tenants. If you’ve inherited a 55+ home and are not yet over the age of 55, renting this property to an age-eligible tenant may be a great secondary income option.
Once you’ve obtained accurate information, you can move forward in securing an eligible tenant. Seek HOA approval for any tenants you plan to move forward with the leasing process. While this may add time and complexity to the rental process, it is ultimately worth it to work with your community at each step. Communicate clearly and put into writing any lease specifics so HOA, homeowner, and tenants are all on the same page.
While renting a home in a 55+ community is not the typical use for these properties, it can be done if managed with care and consideration for the guidelines of the community.
Can I rent out a 55+ community property as a short-term rental (Airbnb, VRBO, etc.)?
Many retirees enjoy the snowbird lifestyle, otherwise known as living the best of both worlds by retiring to a warmer location when the snow flies. This leaves the opportunity to rent out or, better yet, short-term rent their seasonal properties. These prime units are typically located in tourism-heavy areas such as ski resorts and beach towns, making seasonal properties desirable units for short-term vacation rentals. The benefits of short-term rentals (STRs) include less maintenance, shorter rental agreements, and higher revenue during peak season. It’s no surprise that many homeowners turn to STRs as a great source of secondary income.
So, are STRs allowed in 55+ communities? Well, there are a few different ways an HOA might handle vacation rentals.
The simplest, most straightforward guideline would be to allow STRs provided that at least one resident is over the age of 55. This opens the door to family rentals, other retirees looking for a luxurious escape, and solo travelers seeking active adult communities to pursue hobbies and recreation. HOAs may have additional guidelines and ordinances that must be written into STR agreements for residents to follow. These typically include provisions on things like noise, pets, and parking. In short, if residents follow the community guidelines, you’re welcome to rent out your house as a vacation rental.
However, many 55+ communities only allow rentals with leases of six months or longer, regardless of tenant age. This is to prevent these private communities from becoming vacation destinations. In cases where this ordinance comes into play, you’re better off exploring options for a longer lease and extending your seasonal stay to accommodate.
Renting Homes in 55+ Communities: The Pros and Cons
Homeownership in the growing 55+ real estate market can be an amazing investment opportunity. Let’s sum up the pros and cons of renting in these unique communities.
The benefits of renting in 55+ communities include:
- Mature tenants with proven credit history who tend to be more reliable and courteous of their environment.
- Low tenant turnover—those moving to 55+ communities have thought through their decision and are looking for a long-term move.
- Appealing amenities that drive tenants to these beautiful properties year-round.
As with every rental market, a few notable downsides might include:
- Limited applicant pool—some HOAs may exclude anyone over 55+ from renting a unit, regardless of the age of other tenants.
- Strict rules and ordinances may delay the rental process.
- Complying with the HOA at every step adds a layer of complexity that not all homeowners are willing to work with.
Next Steps: Let 55places Help You Find the Perfect 55+ Community
So, what are your next steps as a prospective homeowner in a 55+ community? We’d recommend getting in touch with our expert real estate team to review the bylaws and ordinances of your top communities. From there, we can help identify your options and find the best community suited to your rental goals. We take the hassle out of house hunting, so you can focus on enjoying everything these beautiful 55+ communities have to offer!
