CONDO OWNERSHIP
From Listings to Living
The job offer is in another city, the condo market is slow, and the rent your unit could fetch would roughly cover the mortgage and the association fee. Keeping it and renting it out looks like the easy answer. Then you open the declaration and find a clause about leasing that you never read when you bought.
How to rent out your condo comes down to five checks in this order: whether the association allows leasing and on what terms, whether your mortgage lets you move out yet, which insurance policy fits a rental, what landlord law in your state requires, and how the income is taxed. Skipping the first check is the expensive mistake, because a lease that breaks the declaration can be fined or blocked even after you sign it.
The good news is that each check has a document behind it. The steps below walk through them, with Florida and California as worked examples for the association rules. For the investment math, our guide on whether buying a condo is a good investment runs an illustrative rental return.
Leevli Editorial Team
The table shows what changes once the unit is rented:
| Item | As your home | As a rental |
|---|---|---|
| Association rules | Apply to you | Apply to you and your tenant; leasing rules, approval and fees may apply |
| Mortgage | Owner-occupancy covenant | Allowed once the covenant is satisfied or the lender agrees |
| Insurance | Unit-owner (HO-6) policy | A landlord or rental policy; the tenant carries renters insurance |
| Property tax | Homestead benefits where your state offers them | May be lost; in Florida, renting can end the homestead exemption |
| Income tax | Mortgage interest and property tax rules for homeowners | Rent is income; expenses and depreciation are deducted on Schedule E |
Associations restrict leasing in several ways, and many buildings combine them:
Rules adopted by amendment after you bought may or may not bind you. That depends on state law, and two states show how far apart the answers are. If the rules and your plans collide, our guide to HOA enforcement shows what the association can do about it.
Under Florida Statutes 718.110(13), an amendment that prohibits renting, changes the rental term, or limits how many times owners may rent during a period applies only to owners who consent to it and to owners who take title after it takes effect. Restrictions already in the declaration when you bought still apply to you. So an owner who bought in Miami Beach before a building adopted a minimum lease term (an illustrative case) keeps the old terms unless they consented to the change, while the next buyer of that unit does not.
California Civil Code 4741 says governing documents may not prohibit or unreasonably restrict an owner's right to rent or lease, and an association may not cap rentals below 25 percent of the units. It may prohibit transient or short-term rentals of 30 days or less. An association that willfully violates the section faces actual damages and a civil penalty of up to $1,000. An owner in San Diego can lease for more than 30 days unless a cap, which cannot be set below 25 percent, is already full, while a nightly vacation rental can still be banned by the documents.
Other states sit between these poles or have no specific statute, so the declaration and your state's condominium act decide. A local real estate attorney can tell you whether a rule adopted after you bought binds your unit.
Where the documents require board approval of tenants, expect an application, often a background check, and a fee. Florida limits that fee. Under Florida Statutes 718.112(2)(k), the association may charge for a lease only if it is required to approve the lease and the declaration, articles or bylaws provide for a fee. The statute sets the cap at $150 per applicant, adjusted every five years for inflation (the DBPR fee page still listed $150 per applicant in October 2026), counts spouses, or parents and their dependent children, as one applicant, and bars any charge for renewing a lease with the same tenant. If the documents authorize it, the association may also require the tenant to place a security deposit of up to one month's rent in an escrow account to protect the common elements.
Your tenant must follow the association's rules, but the association's relationship is with you. A fine for your tenant's noise or the cost of a damaged elevator can land on your account. Attach the rules to the lease and make following them a lease term.
Loans made for sale to Fannie Mae and Freddie Mac use their uniform security instruments. The Florida version, one of the state forms posted on Freddie Mac's uniform instruments page, says in Section 6 that the borrower must occupy the property as a principal residence within 60 days after signing and keep occupying it for at least one year, unless the lender agrees in writing or extenuating circumstances beyond the borrower's control exist. Read your own loan documents for the exact wording. If you bought intending to rent from day one, that calls for an investment property loan, which is usually priced and underwritten differently.
Renting also affects the building's financing. Fannie Mae's Selling Guide B4-2.1-03 treats a project as ineligible if it is primarily transient or offers hotel-type services or characteristics, which the guide says include rentals of units on a daily or short-term basis, or if owners must join a rental pool. If a building drifts toward nightly rentals, every seller in it can lose conventional buyers; our guide on how to sell a condo covers why that matters at resale.
Then the property tax. In Florida, Statutes 196.061 treats renting all or substantially all of a former homestead as abandoning it until the owner physically moves back in. Renting after January 1 does not cost that year's exemption unless the unit is rented for more than 30 days per calendar year for 2 consecutive years. For an owner in Orlando, losing the exemption can raise the tax bill noticeably; our guide to condo property taxes explains how the unit is assessed. Other states have their own homestead rules, so ask your county assessor.
Insurance is the step in how to rent out your condo that owners most often put off. The Insurance Information Institute says a standard homeowners policy may not cover losses while a home is rented out, and for long-term leases you will likely need a landlord or rental dwelling policy. Such policies cover physical damage, liability if someone is injured, and usually lost rent for a set period while the home cannot be rented after a covered loss. They do not cover the tenant's belongings, which is why many landlords require renters insurance in the lease.
In a condo, the master policy decides where your coverage starts. Read it before you call your agent, using our guides to condominium association insurance coverage and how much condo insurance you need. Ask the insurer for a unit-owner policy written for a rented unit, or an endorsement that covers rental use, and confirm the walls-in coverage, liability limit and loss of rent. If you have a mortgage, make sure the lender is listed on the new policy as it was on the old one; our guide on whether you have to have homeowners insurance covers what lenders require. How insurers classify a condo unit is covered in whether a condo is a single-family home.
Write your criteria before you advertise: income relative to rent, credit and rental history, the move-in date and any pet rules the association sets. Apply the same criteria to everyone. The Fair Housing Act covers advertising, screening and lease terms, and our guide to Fair Housing Act guidelines lists what a landlord may not do. Your state or city may protect more groups, such as source of income.
Good listings for condo rentals show the building as well as the unit: amenities a tenant can use, parking, storage, and the association's move-in process. Tell applicants up front that the board must approve them and how long it usually takes, because a strong applicant may not wait three weeks. Our printable lease agreement guide walks through the clauses, and our renters rights guide shows what your tenant can expect from you on deposits, repairs and entry.
IRS Publication 527 is the federal rulebook for a rented home. The points that matter most for a condo:
An illustrative example: your adjusted basis in the condo is $290,000 and its fair market value on the conversion date is $300,000. The lower figure, $290,000, is the starting point. If 80 percent of it is assigned to the building, the depreciable basis is $232,000, or roughly $8,436 a year over 27.5 years, before the partial first-year convention. Renting also changes the home sale exclusion when you later sell, so ask a CPA before you sign the first lease.
Owners who already rent in your building know how the board treats landlords. Ask them on Ask a Resident, and compare rents on similar units on Leevli's listings. If you would rather live on-site as a landlord, a two-family home is the other common route.
The declaration says what is allowed, but only owners who rent here know how the board applies it in practice.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
Start with the leasing section of the declaration and the rules, then ask the manager how approval works and how many units are rented. Next, check your mortgage's occupancy clause and your homestead status, switch your insurance, and learn your state's landlord rules. Only then advertise, screen applicants consistently and sign a lease that attaches the association's rules.
It depends on the documents and state law. A declaration can cap rentals, set minimum terms or require approval. In Florida, a new restriction binds only owners who consent and later buyers. California bars outright bans and caps below 25 percent of units, though it allows bans on rentals of 30 days or less. Check your own state's condominium act.
They include a cap on the share of units rented at once, a minimum lease term such as six months or a year, a limit on how many leases a year, a ban on short-term rentals, a waiting period for new owners, and board approval or registration of each tenant. Many buildings use several together, so read the whole leasing section.
Usually, yes. The Insurance Information Institute says a standard homeowners policy may not cover losses while a home is rented out, and long-term rentals generally need a landlord or rental dwelling policy. In a condo, ask for a unit-owner form written for rental use, check what the master policy covers, and require your tenant to carry renters insurance.
It varies by building and state. Florida lets an association charge only if it must approve the lease and its documents allow a fee, capped by statute at $150 per applicant and adjusted every five years, with no charge for renewing the same tenant. Some documents also allow a deposit of up to one month's rent to protect the common elements.
Usually, once you have met the loan's occupancy terms. The Fannie Mae and Freddie Mac uniform instrument asks owner-occupants to move in within 60 days and live there at least one year, unless the lender agrees in writing or circumstances beyond your control apply. FHA and VA loans have their own rules, so check your note and security instrument.
Rent is income reported on Schedule E. You deduct ordinary expenses, mortgage interest, and association dues for maintaining common elements, but not special assessments for improvements, which may be depreciated instead. The building portion is depreciated over 27.5 years. Losses may be limited by the passive activity rules. A CPA can apply IRS Publication 527 to your numbers.
Two clocks apply. Your mortgage may require at least a year of owner occupancy, and your declaration may set its own waiting period or rental cap queue. Then add the time for board approval of the tenant, which depends on the building. Ask the manager for the typical approval time before you promise anyone a move-in date.
Advertise the unit with the building's amenities, parking and move-in rules, and say up front that the board must approve the tenant if it must. Use written criteria for income, credit and rental history, and apply them to every applicant. Current owners in the building can tell you which listing sites and agents brought them reliable tenants.
Signing a lease before checking the declaration, keeping an owner-occupied insurance policy, forgetting to attach the association rules to the lease, and assuming the homestead exemption survives renting. Another is deducting a special assessment for an improvement in full, when Publication 527 says it is not deductible and may instead be recovered through depreciation.
This article is informational and does not constitute legal, financial, tax or insurance advice.
