The Pros and Cons of Homeowner Associations (HOA)
Whether it is your primary home or rental, it is important to consider if you want a homeowner association (HOA) included with the home you purchase. An HOA can add to your monthly expenses but also leaves less upkeep for you to do in addition to other benefits.
What is an HOA?
An HOA is a set of rules and guidelines for the neighborhood. HOAs can vary in complexity but are generally meant to help a neighborhood look its best and function smoothly. HOAs can be as simple as covering the costs of trash, yard work, and exterior maintenance to as complex as rules for paint options, pet ownership, and allowable mailbox sizes.
Pros of an HOA
An HOA lets a neighborhood shine. The yards are maintained, the neighborhood looks uniform, and it generally helps keep property values steady. An HOA may include a community gym, pool, or park. Some HOAs also provide a security gate for the community. The fees help maintain the common areas and keep everything looking clean.
If you ever have a dispute with a neighbor the HOA board can help resolve the conflict and keep the peace. An HOA can also build a sense of community within the neighborhood because everyone pays into it and has a vested interest in its success. They can offer community events, food trucks, and other discounts and freebies for local businesses.
Cons of an HOA
An HOA is an additional monthly or yearly fee, so it is important to budget for the extra cost. The costs vary depending on location and what is included but it can cost several hundred dollars a month. Also, if you are looking to buy a rental, some HOAs prohibit rentals or have strict rules about what you can and cannot do.
Depending on how restrictive the HOA is you could be prohibited from doing upgrades on your home without permission. You might have to submit projects for approval such as installing a shed, painting your house, or doing certain landscaping projects.
If an HOA is struggling financially it could raise its monthly rates and impact the home values in the area making it more difficult to sell. An HOA can be seen as too restrictive for what you get in return.
Like houses, every HOA is unique. When you find a home that you like it is important to see if it comes with an HOA. You will be able to find out how much the HOA is and what is included. And you will have a chance to walk away from a home if the HOA doesn’t work for you.
HOA is an Important Factor
An HOA can provide a lot of value, but it can also add unwanted costs and restrictions. And every HOA is different, the costs and perks vary greatly. So, it is important to weigh the pros and cons of an HOA when you are searching for a house.
