Lake Havasu real estate is unique in that it is primarily compromised of second homes owned by retirees. The community itself was marketed directly to this demographic during its early stages of development, due to the proximity to the river which creates ambiance and boating availability combined with the remoteness of the location. By being a small city located a large distance from any surrounding city, Lake Havasu functions as an island in the middle of the desert, and is perfect for people who want to get away for extended, relaxing vacations on their own terms. The Lake Havasu community purposely keeps itself small and untouched by most major developments or retail chains in order to stay as an area that attracts a very specific lifestyle. Residents of Lake Havasu typically come for a few months out of the year and live either in rentals or in homes they own. Many times, the owners will attempt to rent these residences out for the rest of the year in order to offset the mortgage payments.
The unique nature of the Lake Havasu real estate market brings into play some federal regulations that apply everywhere, but many people do not realize are in place because they only are considered in specific kinds of communities. The rule that may be most surprising about Lake Havasu is that in order to purchase a condominium with a conventional loan, the complex cannot be more than 51% second homes. This means that if the complex itself is owned by more than half of people who are not permanent residents, you cannot use a traditional mortgage to pay for your residence. In addition to that regulation, the complex cannot be more than 20% of the residences using conventional mortgages to pay for their own units. While it may seem strange that the methods that are being used to pay for neighboring units, which have nothing to do with you, are effecting your own ability to secure a mortgage, this is actually a regulation that protects the complex as a whole from failure due to defaults. The regulation ensures that even if there is a downturn in real estate, the majority of the units will have either been paid for in cash or will have enough equity built up to discourage abandonment.
Lake Havasu condominiums are directly affected by these rules due to the fact that the majority of small homes and residences in the area are not considered primary, and are actually vacation homes. This anomaly effects areas that you may want to purchase in which are “tourist areas,” where people are not going to live permanently. These types of residences are traditionally more easily abandoned and foreclosed upon than primary residences, so in complexes where the actions of one neighbor effect the rest of the community, there must be steps in place that will protect the whole. Typically, condominiums in Lake Havasu are paid for in cash or through an alternative form of mortgage secured by a local lending institution.
