Buying a home that’s part of an HOA

Category: Housing

Modern real estate


If you’re purchasing a home, you’ll see that many homes these days are part of an HOA (Homeowners Association). A Homeowners Association governs various aspects of the community, and this also means an extra fee added onto your monthly mortgage payment. Homeowners Associations are especially common amongst new construction homes, townhouses, and condos. Although it usually means paying a bit more to purchase a home that’s part of an HOA, in some situations, the included amenities can actually help you to save money overall. In other cases, especially when the HOA dues are high, it might not be worth it. Although it will vary greatly depending on the specific HOA-regulated property you’re considering, the following are some pros and cons to consider when comes to homes that are part of a Homeowners Association: 

Benefits of an HOA

Fewer things to worry about

When you have HOA dues, some of the money goes towards taking care of things that you won’t have to worry about on your own. This can include things like landscaping, snow removal, trash pickup, and so on. Additionally, they go towards maintaining the community itself and keeping the common areas looking nice. If your HOA dues are very low, there’s a good chance they won’t cover very much, but they might take care of what you need. 

Association management

If you’re having a dispute with a neighbor—for example, they throw very loud parties at inappropriate hours—you can usually contact the HOA directly about the problem, rather than have to deal with the neighbor on your own.

Amenities

Depending on your specific HOA, you might have access to amenities that are included in your fees. Generally speaking, the higher your payments are, the more amenities you might have. This can include things like a fully equipped gym, swimming pool, sports courts, and much more. If you have no interest in these things, paying the extra fees for access might not be worth it. But if it gives you the option to cancel your costly gym membership, your HOA dues can possibly save you money in the end—and not to mention, there’s the convenience of being able to work out without even leaving your own neighborhood.

Drawbacks of an HOA

HOA fees can increase

There are various fees that make up each community’s HOA dues, and for some homebuyers, that added expense is enough to make them avoid HOA homes completely. But even if you are considering fitting that added expense into your budget, you’ll also need to remember that HOA dues aren’t set in stone. It’s very common to see an increase in HOA fees, especially if you own the home for many years. Additionally, you may be required to pay a special assessment at some point (or many times). 

The HOA regulates many things

By living in a HOA-regulated community, you also agree to the bylaws that are set in place. These regulations can affect everything from exterior paint colors to landscaping choices. Some HOA regulations are very relaxed, and they might not affect you at all. Other communities have stricter HOA bylaws set in place, which can be a huge disadvantage for many homeowners. After all, you purchase a home to experience the independence of having your own property, and in some communities, it can almost feel like you’re renting again because you’re constantly asking for permission to do certain things. As such, if you’re considering buying a home that’s part of an HOA, ask to see a copy of the bylaws first.

You may have to pay fines

If you don’t comply with the bylaws set in place, you may be required to pay fines. If you receive multiple violations, you can face more serious consequences. And if you’re unable to pay these required fines (or your HOA dues), you might get a property lien on your home, or you could even potentially lose your home.

Would you like to buy a home, but need extra cash? If you’re receiving long-term payments from an annuity or structured settlement, we may be able to help. Contact Peachtree Financial Solutions today to learn more about selling future payments for a lump sum of cash.

Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.

Tags: Buying a Home, HOA, mortgage payments

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