The Pros and Cons of Homeowner’s Associations

The Pros and Cons of Homeowner’s Associations

If you’ve ever considered buying a home in a community with a homeowner’s association (HOA), you’ll know they sometimes receive negative press. It’s easy to find reasons to avoid taking the plunge, from stories about nosey neighbors to news items about persistent rulebreakers.

However, such stories are often wildly overblown. According to recent stats, over a quarter of Americans currently reside in private HOA communities – proof that they must have some perks! To help you make a balanced decision about moving into a managed community, we’ve put together a handy guide below to their pros and cons. 

First things first: What exactly is a homeowner’s association?

An HOA is a governing body that helps sustain a planned community, such as condominiums, townhouses, or family homes. The organization’s purpose is to ensure the community of homes stays looking clean and welcoming while promoting that all-important community spirit. Consider an HOA as a kind of landlord or property manager – in exchange for a fee, you can enjoy a low-maintenance lifestyle while getting to know a group of friendly new people.

What are the pros of an HOA?

There are plenty of excellent reasons to buy a property with an HOA, including:

1. They take care of difficult jobs

Does the thought of cutting grass, picking up trash, trimming hedges, or shoveling snow fill you with dread? An HOA will take care of these chores, allowing you to get on with your day without having to lift a finger. 

2. They often host recreational activities

HOAs often host community parties, cookouts, sports events, and yard sales. Some communities even feature golf courses, tennis courts, or swimming pools – great news if you enjoy getting active. Retired individuals also tend to find that HOA communities give them a new lease of life, particularly if they enjoy socializing and getting out of the house.

3. They represent smart investments

Single-family properties in HOA communities sell for around 4% more than similar properties outside of HOAs. If you’re feeling a little worried about committing to a new home, therefore, you can rest assured that your prospects for selling it further down the line are very positive. You could even make an attractive profit.

4. They mediate neighbor disputes

Ideally, you won’t get into any arguments with your neighbors. However, an HOA can be useful if problems arise, acting as a mediator to deflate tensions and prevent potential rule violations.

5. They cover basic bills

While HOA policies can vary widely, most cover bills for basic utilities such as water and gas. As well as cutting your monthly expenditure on bills, your HOA will save you the bother of making payments and responding to utility companies. 

What are the cons of an HOA?

If the benefits listed above are making HOAs sound attractive, take a look at these cons before committing:

1. They involve fees

Fees are by far the most common complaint among HOA members. While you should expect to pay something (the HOA takes care of exterior upkeep and bills, after all), fees can sometimes extend well into the hundreds of dollars per month. It is also worth noting that HOA fees aren’t fixed and can occasionally increase. As such, you must budget carefully before selecting an HOA.

2. They carry rules and regulations

HOAs establish rules about the appearance of properties under their remit. While some communities are relatively lenient, others impose restrictions on everything from door color to the type of windows you can install. Some HOAs even feature rules about the number of vehicles you park in the area.

Before purchasing a home in a governed community, remember to read the rules and regulations very carefully. Violating even minor rules could result in a fine and generate tensions with your neighbors. 

3. Defaulting on your fees could be costly

In a worst-case scenario, defaulting on HOA fees could put you at risk of losing your home to foreclosure. Even if this doesn’t occur, however, failure to pay your costs could impact the value of your property as the community may not be able to afford sufficient upkeep. 

4. HOAs don’t always make good decisions

Unfortunately, you’re not in control of the money you hand over to the HOA. Some governing bodies can mismanage your money or fail to conduct repairs in a timely fashion.