When buying real estate there is more than just the listing price to think about. There are mortgage payments and property taxes that must be paid as well. Today we are writing about HOAs, another fee you may come across during your real estate adventures. Understanding what this fee is going towards will be helpful when deciding if this decision is right for you. Keep reading to find out more about what HOA fees are!
What Are HOA Fees?
HOA stands for Homeowners Association and is typically a monthly reoccurring fee. This fee can vary from property to property. While many people associate an HOA fee with condos, they can also exist with townhomes and homes.
Your HOA fee could go towards various features. The fee helps maintain common areas, which are locations that multiple people have access to. The cost of an HOA fee is based on square footage and amenities; such as size of the common areas as well as how many amenities are offered to you.
From this stand point, there are many people who don’t mind an HOA fee because they know that their neighbor’s yards will maintained to a set standard. This means minimal work for the owner. According to a study by the California Association of REALTORS®, “90% say association rules protect their investment and enhance property values”. This means that the HOA will stop your neighbors from painting their house bright purple. While you do have to pay a fee, buyers often rationalize the fee when they think of the maintenance they would have to hire themselves, such as a gardener or a pool cleaning service. HOA fees can also be used for repairs, like replacing siding on the buildings or repairing the roofs. Again, this is all subject to each properties HOA rules, and you can find plenty of differences between each HOA board.
If you happen to purchase property where there is an HOA, it’s a good idea to find out who serves on the board and who to reach out to when you have questions. Many associations will let you serve on the board, which will give you an outlet to let your voice be heard. Involvement from an HOA board will vary property to property. Some even have a voting process, where board members can approve or deny projects.
The Negatives
While an HOA fee may help protect your home values, there are some limitations. According to the same California Association of REALTORS® study, the worst aspects of living in a community association is the restrictions on exterior home improvements and paying dues. Many home improvement projects have to be approved by the board, which is a hurdle many do not want to deal with. If you are looking to have a unique custom home, than an HOA might not be right for you.
The Auker Group
The Auker Group is ready to help you navigate your way through real estate, and can help answer any questions you may have about an HOA fee and how it can impact you during the home buying process. Have more questions? Call us today at (619) 814-3499 or you can fill out our contact form.
