Weighing the Pros and Cons of a High HOA Fee
By: Danielle Hegedus
When purchasing a new home, encountering a homeowners association (HOA) can feel like a mixed bag. You mady spare the expense of a lawn mower, snow shovels, and various other tools needed for the maintenance of your property, but how much are you willing to tack onto your monthly bills in exchange for these services? Are you willing not to paint your home your favorite shade of green in order to ensure your neighbor can’t paint their home pink? Being part of an HOA definitely requires some give and take.
An HOA is typically run by a group of your neighbors, elected to enforce the HOA by-laws and maintain certain standards for the appearance, and activity within a neighborhood. If you buy a home that is covered by an HOA, you’ll be responsible for dues (monthly or annual), as well as special assessments for major expenses. You must adhere to the HOA rules, but you also get to enjoy the perks.
The Bright Side of a Homeowners Association
Community Appearance is a Priority
Though services differ between HOA’s, most offer ongoing maintenance for the community’s common areas such as parks, pools, fitness centers, and parking lots. An HOA might also offer security personnel or a gated entry to your neighborhood. Regular maintenance such as landscaping is typically covered, as well as major repairs that would impact a majority of homeowners. If you are a first time homebuyer, face health challenges, travel often, or just don’t want to worry about handling major home issues, an HOA could be for you.
Access to Pricey Amenities
An HOA offers you access to amenities that you may not be able to afford in a single family home like a pool or a golf course. Even if you aren’t keen on these features, they could be major selling points for buyers when you are ready to sell.
Your HOA dues could save your some money, too. If your new community offers a fitness center, maybe you can cut the cost of an expensive gym membership out of your budget.
Does your neighbor’s dog bark all day? Has your neighbor found a new passion for “tinkering” with cars and turned your parking lot into a junkyard? Have you had enough of your neighbor’s year round blinking and singing Christmas lights? The HOA (or a property management company contracted by them in many cases) enforces the rules and has the power to fine residents that are not adhering to them.
Carefully consider all that an HOA offers in terms of amenities, property maintenance and repairs, and peace of mind
What’s the Downside? Renting Restrictions
Sure you are happy in your new home right now, but what if you get a great job opportunity across the country? Well, you’ll just rent your home out, right? Not so fast! If you are in a condominium, many HOA’s limit the percentage of condos that can be rented at any given time, and there is often a long wait list to be able to rent your home. In other communities, HOA’s can have a say in who you rent to with restrictions that may eliminate tenants with children or specific breeds of dogs. You’ll want to investigate this before you buy.
Limited Freedom–It’s a Two Way Street
It’s so great that your neighbor can’t keep their giant work trailer in front of your home, right? Well guess what? You can’t put up that political sign or decorative flag. Same goes for window coverings and that manatee mailbox (pictured) that you love so much. Understand not just the community standards before you purchase your home, but the fine print details of what you can and cannot do to individualize your home.
Via Holy Taco
Fees, Fees, and More Fees? Did I Mention the Fees?
Find out what HOA fees are like in your area for comparable properties. Depending on the neighborhood, HOA fees can range from $200 a year to $600 a month. It’s important that you know what you are getting into before you buy. Ask how much the HOA fees have increased over the past five years. Find out when was the last time major repairs, like the resurfacing of a pool deck were performed? Understand that special assessments for major repairs or maintenance can come without any warning, and unlike your mortgage, HOA dues are not tax deductible. Additionally, some HOA’s will level fines for rule infractions so toe the line!
All HOA’s are Different. Do Your Due Diligence
Ask your agent to get a copy of the HOA by-laws, fee structure, and any other applicable information. You want to be clear about what is the HOA’s responsibility and what falls under your jurisdiction. Investigate the financial health of the HOA and what major expenditures they have approved over the past five years. This information will give you a sense for what kind of fee increases or special assessments you may expect down the line.
If you ultimately decide that the high cost of an HOA is worth it to you, consider getting involved and even taking a leadership role within the HOA. If you’re a part of making the rules and approving expenditures, you just might get the best of both worlds.