What You Should Know About HOA Fees and Benefits
Moving into a new neighborhood comes with many learning experiences; assessments are one.
This post will study all of the benefits and costs of being in a homeowners association (HOA). The benefits of living in an HOA neighborhood are many, but you also need to be aware of the costs and commitments of being part of a neighborhood.
Benefits of HOA Living
Each community association is different, but assessments generally cover the expenses related to maintenance of public areas, community amenities, and a certain standard of maintenance/decor for your homes so that the entire neighborhood feels like home.
Maintenance of Common Areas
Maintenance of common areas is a universal benefit from homeowners associations. Depending on the community, public parking areas, community amenities, and community utilities (trash is most common) are all maintained through the collected assessment fees.
Many HOAs bring different amenities that are available to all the members of the HOA and their guests. These amenities vary depending on your neighborhood, but they can include pools, tennis courts, gyms and business centers, parks, and more. For many homeowners, the amenities are the primary reason they choose a specific HOA or condominium association.
When considering a neighborhood with an HOA, check what the HOA provides amenities and standard area maintenance before choosing your community.
This can be a hit or miss for many homeowners. The standards can seem burdensome, but many people enjoy having a community that feels like a community. If you have ever had your neighbor's dandelions make a mess of your yard, you will understand the reason many people enjoy HOA standards.
Costs of HOA Living
Every HOA gets funded through association dues. The other significant costs are the work and capital it takes to meet the community standards and the time you invest in doing HOA work (volunteering for events, serving on the HOA board, etc.).
The primary means of funding for community associations are assessments which may be collected monthly, annually, or on another regular interval. These assessments vary between neighborhoods and are not tax-deductible unless the fees are for a property that you are renting out. Therefore, before you decide to move into a community association, you want to do your due diligence and determine how much the assessments are, when they are due, and what other fees will be part of your regular housing budget. Then, include these numbers in your budgeting for your house when you make a purchase decision.
The other cost of HOA living is meeting the HOA's standards. The rules for a community association are often called the Covenants, Conditions, and Restrictions (CC&Rs). The CC&Rs and Bylaws help you understand what commitments you need to make to be a part of this community, and you need to review them before you move into a neighborhood. The following are areas that many HOAs address with a CC&R.
- Home-Based Businesses
- Home Additions
- Landscaping and Lawns
- Home Maintenance
- Paint Colors
An association governing document defines what a neighborhood is about, the rules and helps you decide whether your lifestyle will fit with the community association.
Should You Move Into a Community Association?
It would help if you made this decision with due diligence and after consulting professionals. Community association assessments may affect your finances significantly, so talking to a CPA is a good idea. In addition, the HOA or condominium association determines the resale value of your home, so you should consult with a real estate professional as well. Finally, it would help if you made sure that you read all the documents and decide that will fit you and your lifestyle.
Moving into an HOA or condominium association was the best decision for many people, so make your decision wisely