If you are searching through the housing market, you may have noticed that some properties include an extra fee for a homeowner’s association (HOA). An estimated 26 million properties across the U.S. fall within an HOA jurisdiction and homeowners spend some $88 billion in required assessments and fees each year.1 Buying a home is a significant investment, so you need to fully understand every expense before signing up for something you may not want or need.

First, let’s start by answering the question: What is an HOA?

Think of an HOA as a government for your community, neighborhood, or condominium. The board members of an HOA create and enforce regulations onto property residents to maintain the appearance and property value of the community. When you purchase a home within an HOA, you are automatically enrolled and must begin paying dues and fees to support the association.

So is paying for an HOA worth it? We’ve compiled a list of benefits and drawbacks to help you make that decision:

What You Get

  • Access to Amenities: The main benefit of investing in an HOA is taking advantage of swimming pools, clubhouses, tennis courts, and more that you would not ordinarily have access to. This can be particularly appealing if you have children who are looking for fun activities.
  • Protected Property Appearance: We’ve all seen houses with overgrown trees or unkempt lawns. Luckily, an HOA takes care of that! Their goal is to maintain property upkeep and keep the community looking presentable, so they will typically step in to address the upkeep if the owner falls short.
  • Improved Home Value: Ideally, the HOA will be successful in its attempt to keep the neighborhood looking pristine — which attracts more homebuyers. As more people become interested in living in your community, a sense of exclusivity emerges. Thus, the more you can boost the value of your home.
  • Built-in Exterior Maintenance: Don’t you hate shoveling after a big snowstorm? As part of their duties, your HOA ordinarily takes care of snow removal, upkeep of private roads, and landscaping of common areas, so you don’t have to!
  • Conflict Resolution: Minor disagreements between neighbors are normal. But if you need a third party to step in and mediate the situation, members of an HOA are the perfect solution.

The Downside

  • Money: Likely the largest con — and the reason many decide against buying a home included in an HOA — is the expense. Monthly fees can range anywhere from less than $100 to over $1,000.2 Typically, single-family homeowners will pay $200 to $300 per month on average, meaning they could be spending upwards of $3,600 annually on HOA dues alone.3
  • Unexpected Fees: As if that cost were not high enough, the HOA board has the power to increase dues over time and fine residents for various reasons, including:
    • Painting your house an unauthorized color
    • Parking in a spot that is not assigned to you
    • Putting up a fence
    • Having a pet
    • Drying your clothes outside on a line
    • Flying flags
    • Building a patio
    • Conducting business out of your home

…And more!

  • Limited Freedom: Purchasing a home means that you can do whatever you want to it, right? This may not be the case when you’re living within an HOA. HOAs touch virtually every aspect of your home and may constrain what you can do both on the outside and the inside.
  • Community Politics: HOA board members have authority in the community, which can easily be abused. Too much power in the wrong hands can create a negative environment to live in, so do your research on perspective HOAs before signing!
  • Sometimes Unreliable: When you’re a part of an HOA, you extend a certain amount of trust to the members to follow through on their claims to take care of landscaping, snow removal and more. And if they fall short, you may be paying hundreds or thousands of dollars for virtually nothing. Make sure you know what you’re signing up for before moving in.

Looking to make a move? Visit our mortgage page or call 888-LOAN-391 to see how we can help you get into the home of your dreams at a low rate today!