Pros and Cons of HOA
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Pros and Cons of HOA’s
When you are shopping for a home, it’s likely you will find some HOA properties.
HOA’s, or Home Owner’s Associations are governing structures for a planned community such as a development of single family homes, townhouses or condominiums. They are kind of like a landlord or property manager in that they provide repair and maintenance services, only unlike a landlord, the services are not included in the rent. It comes with an additional fee.
There are several pros and cons that come with owning a property that is governed by an HOA. This article will review the advantages and disadvantages so you can find out if an HOA property is right for you.
Pros
Less Maintenance
One of the best things about and HOA is, they take maintenance costs and responsibilities off your hands. Of course, this does come at a price, but it could be worth it if a major repair is needed.
Higher Resale Values
HOA homes tend to sell for more than non-HOA homes. This may be because they are better maintained while residents are living there.
They’re Good for Recreation
Many HOA’s provide swimming pools, tennis courts, golf courses, playgrounds and gyms. Tenants can enjoy these amenities while hanging out with friends and the HOA provides full maintenance for these facilities.
Cuts Down on Bills
In addition to providing maintenance, HOA fees also include certain utilities. Not only does this cut down on expenses, it also eliminates the need to keep track of all your bills.
Conflict Resolution
Just like a landlord, your HOA will be responsible for conflict resolution. Therefore, if you’re having a problem with a neighbor, in addition to confronting them, you can use the HOA as a mediator.
Cons
Fees
The biggest disadvantage of having an HOA is the fees. Research shows that HOA generally save residents money with every dollar bringing in $1.19 in return.
Still, fees can be costly, sometimes as much as $10,000 a year. When added to a mortgage, this can discourage some potential buyers. If there are expensive repair for the entire building the HOA may have a special assessment in addition to the planned fees.
Increased Risk of Lien of Foreclosure
Your HOA fees are considered a part of your mortgage payment and not paying them can lead to a foreclosure or a lien on your property. It should also be noted that these do accrue late fees if they are not paid on time.
Rules and Regulations
HOA’s have several rules and regulations regarding how you maintain your property. This can come into play in several situations including everything from the color you paint your living room to how high your grass should stand. If you don’t like to live by the rules, an HOA may not be for you.
Possible Poor Management
Some HOA’s are very reliable and professional, others…not so much. Some neglect to take care of maintenance needs. Others may mismanage money and if they don’t have enough in reserve, they can increase their dues.
When buying a home, you must consider if a HOA property is right for you. You should also review the HOA’s master deed, CC&Rs and latest board meeting minutes to find out how the HOA is run and what the financial standing is.
We wish you luck finding a property that’s right for you.