What You Should Know about Homeowners Associations

When you buy a property in a planned development such as a condo, townhome, or subdivision, you are obligated to join the homeowners association, or HOA, of the community. This usually involves paying fees every month, quarter, or year for the maintenance and upkeep of the building and commons areas in it.

Homeowners associations also involve rules and regulations that you and other owners and tenants in the building must abide by. If you are planning on buying a leased land property or a home in a gated community, there are some things that you should be aware of before you sign on the dotted line.

What do HOAs involve?

Homeowners associations involve regulations regarding the property that are set by a board of directors or committee. These rules are then enforced by a management company or even a group of volunteers. The key is to find an HOA with regulations that fit your lifestyle and your own personal requirements. You can even become involved with the homeowners association to let your voice be heard.

While some people are fine with the rules set forth by the HOA, some buyers simply do like the fact that there are regulations that they must follow. They do not care for anyone telling them where they can park on their property or what color they can paint their home. If you are one of these people, you are probably not a good candidate to buy this type of home. There is certainly nothing wrong with wanting the freedom to make your own choices regarding your house! For others, living in an HOA community is something that they prefer. Below you’ll find some of the benefits of an HOA property.

Pros of homeowners associations

There are many reasons that homeowners prefer living in an HOA community. Here are a few:

• Maintenance is low. Tasks such as trash removal and the maintenance of your lawn and common areas are completed by the HOA. This means less work for you as a homeowner.
• Management can handle issues. Problems such as loud music and barking dogs can be handled by the management of the HOA. This means that you avoid getting involved in a shouting match with your neighbor.
• Community appearance is set to high standards. The association must make sure the property and development are maintained and looking fresh. Homeowners will probably not see houses with peeling paint or unmaintained lawns.
• You can enjoy many recreational amenities. Many HOAs have a pool, tennis courts, walking trails, and playing fields that are specifically for residents only.

Cons of homeowners associations

As stated before, living in an HOA community is not for everyone. Here are some reasons why:

• You have to pay HOA fees. These fees can be up to $400 every month depending on how upscale the property is. Some amenities such as the gym could save you money in the long run, but you must determine this before you buy.
• You must follow the HOA rules and regulations. If you don’t like anyone telling you that you can’t paint your house purple, you probably should not live in this type of home.
• The fees could have an impact on your finances. A condo with high HOA fees might end up costing you as much as the house you don't think you can afford.

So if you’re considering buying property that is managed by an HOA, remember to evaluate your temperament, preferences, and lifestyle. Be sure to learn the rules of the HOA before you buy!

Whether you purchase a condo or subdivision, it is a good idea to know the property’s value. Remember, you can always rely on a free home valuation report from Neighborhood IQ to help you in the buying process. Also, the Home Loan Advisor can analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm, and match you with potential lenders.