In this article, Summit Way Realty dives into everything you need to know about HOAs, including how it works and all of the pros and cons. The latest statistics reveal that homeowner associations or HOAs govern more than 60% of single-family homes in the United States. There is a good chance that you may come across an HOA property when you are shopping for your dream home. Summit Way Realty is here to dive into all of the advantages and disadvantages of homeowners association properties. People who are retiring love these homes since the majority of them are looking for a low-maintenance lifestyle.
The Foundation for Community Association Research reveals that more than 63% of residents living in HOA properties believe that the association’s rules protect their property value. But there are times when planting a tree in the front yard or painting the house can lead to violations when you don’t get the proper approvals.
So, what are the advantages and disadvantages of investing in an HOA property? This article provides information on the pros and cons of an HOA for homebuyers.
What Is an HOA and What Does It Do?
The homeowners association is a governing structure for a planned community, including condominiums, single-family homes, and townhouses. The association has a formal agreement to collectively manage the common areas of the properties and share the costs. The HOA is like a landlord or property manager. They take care of specific features in the community and maintain them in exchange for a fee. They will set rules for the community for the buyers to follow.
In a planned community, the land developer will outline the rules and restrictions to follow. The developer will hand over the operation and governance of the community to an elected board of homeowners that comprises volunteers. The board of homeowners or the homeowners association should run the community and maintain its budget. The association will hire a lawyer and management company to assist them in running the daily affairs of the association. The rules and restrictions of homeowners associations can differ in every community. Buyers need to understand any rules and restrictions of the HOA if they plan to purchase property in the community. It will help reduce your stress levels over time.
There are over 347,000 homeowners associations in the United States, which equates to approximately 24% of US homes. The states with the least community associations include Alaska, Arkansas, North Dakota, Mississippi, South Dakota, Wyoming, and West Virginia – which has less than 1,000 associations.
Fees Associated with HOAs
The fees associated with homeowners associations vary depending on the specific association. For example, some homeowner associations charge $90 a year while others charge $9,000 a month. The money usually goes towards the homeowners association’s regular expenses and savings for future expenses. The more the association does in the community, the more you may have to pay. You can always ask about the history of the HOA’s fee increases so that you get a better idea about what to expect in the future.
The Pros of an HOA
The Community Associations Institute’s 2018 survey reveals that over 85% of residents are satisfied living under an HOA. In fact, 63% of these residents have rated their experience as positive, while 22% rated the experience as neutral. Here are some of the many advantages of investing in an HOA property.
- Low Maintenance – When you live in an HOA property, the homeowners association may handle exterior upkeep. You may not have to mow the lawn or worry about landscaping if the HOA will take care of these matters. Pest control is also not your worry anymore. Most people think it’s pretty convenient living in such a community. The HOA may also handle HVAC repairs, plumbing repairs, electrical repairs, snow removal, trash pickup, painting the building’s exterior, and repairing roads in the community.
- Increased Resale Value – Single-family homes under homeowners associations sell for at least 4% more than similar homes outside the community. If you want to sell your home for top dollar in the long run, you should consider investing in an HOA property.
- Cutting Down on Bills – An HOA may take responsibility for water and gas or even handle city services like sewer, recycling, and trash pickup. These paid services can help cut down on the number of utility bills you pay each month.
- Shared Amenities – You have access to shared amenities such as pools, lakes, playgrounds, outside grills, and security without any charges from you.
- Conflict Resolution – If you dread conflicts with neighbors, an HOA property is ideal for you. If you have an issue with your neighbor, you only need to talk with the HOA, and they will take care of the problem for you.
The Cons of a Homeowners Assocation
- Fees – HOA fees are mandatory in communities that have them and can be expensive. The average cost of a single-family HOA is between $100 and $500 per month in the Kansas City Area.
- Risk Of Lien Or Foreclosure – HOA fees are in addition to a mortgage, homeowners insurance, and property taxes. You should pay these fees even if you don’t use all the amenities.
- Strict Rules – HOAs have strict guidelines about the home’s exteriors. You need to follow these rules and restrictions when living in such a community.
How to Decide If an HOA Is Right for You?
The most important thing is to ask for the HOA’s declaration before purchasing the HOA property. The declaration should indicate the restrictions and how often the HOA has increased dues and assessments. Ask the residents who already live there what their opinion is of the management. Don’t forget to review your lifestyle, budget, and personal preferences before investing in an HOA property. These are some of the most important things to consider before deciding if an HOA property is right for you.
Summit Way Realty is here to help you with all of your real estate questions and concerns. We hope the above pros and cons of investing in an HOA property help you in your decision-making process. Summit Way Realty is your real estate expert in Kansas City and the surrounding areas. We are here to help you find your dream home! Contact us today to get started.
