As we start getting into a part of the year when house hunting tends to spike, many people are getting geared up to put their homes on the market; this also means finding a new home into which to move. While there are cases where the move will take place within the same neighborhood or community, this isn’t always the case, which can mean a change in homeowner’s association rules or even their presence entirely.
Many people who aren’t currently part of a homeowner’s association may balk at the idea of giving away more money each month or quarter to an entity that may have the final say over what gets done to homes in the area. While this is a concern for some, it’s a drawback that several potential positive aspects can offset, especially for those who have never been part of a homeowner’s association. Knowing more about it can help you make an informed decision.
Pro: HOAs Help Maintain Higher Average Property Values
This is a commonly-cited reason that many people favor homeowners’ associations. If you are looking to build equity and value in your potential real estate purchase, your local HOA will have a vested interest in that. They will enforce rules that make neat appearances and property upkeep at certain standards, ensuring that neighborhood homes are always on the market for a premium.
Con: They Can Have Significant Costs
Most people that get ready to buy their first homes, get a ballpark estimate of their potential mortgage payment from an easy-to-use mortgage calculator, and use that to begin the browsing and pre-approval process. The problem is that with many simple estimates of monthly payments, failing to consider an HOA fee can be devastating. In some cases, they can be a few hundred dollars a year, in other cases, they can amount to thousands, even rivaling the mortgage payment itself.
Pro: Communal Property Maintenance
Being able to enjoy your communal amenities and common grounds without having to coordinate maintenance with other residents means more of your time can be spent having fun. With routine maintenance and property upkeep paid for and arranged by the HOA, you won’t have to worry about any of it.
Con: Limited Options & Approval Needed
If you are the type to want to paint your home, or even just your door, a funky or unique color, then living with an HOA will probably not be in your best interest. To make the neighborhood homes more unified and beautiful, most HOA-run communities will only allow a narrow range of colors to be used on the home when painting. Any potential additions or structural changes will usually need extensive inspection and approval.
Pro: Homes In The Community Will Look Nice
Since the homes in the community are regulated and prevented from making design and decor choices that are too bold or drastic, the communities are often seen as “ideal” or “picture-perfect”.
Con: Homes In The Community Will Look Similar
While the homes will all have a very conventional aesthetic, this also means that the neighborhoods are often seen as “repetitive” or “boring”. Sometimes those with very similar exterior home designs are referred to as cookie-cutter communities.
Pro: You Get Closer To Many Neighbors
Being part of a homeowner’s association will allow you to get closer to your neighbors and know them on a more personal and dynamic level. Serving on the board of directors for your HOA, or even volunteering your time, can not only earn you recognition in the community, but it can raise social status for those interested in such things. Even if there is no direct social benefit, volunteers actively make their communities better.
Con: The Personal Dynamic Of The Board Can Affect Operations
The HOA is governed by a board of directors, who will vote on important community matters, even things like approval for a particular resident’s addition. This means that those same decisions can potentially be influenced by social interactions and other sentiments. Someone seeking approval for a screened-in back porch who just had a fight over a parking space with someone on the board, for example, may be in for an uphill battle.
Pro: Conflict Mediation Can Often Be Provided For Neighbors
There will be times when one neighbor has a disagreement with another, and there is usually no immediate way to resolve the issue other than to go to court. However, in a community with an HOA, there may be provisions for mediation at the community level. Not only can this avoid potentially costly and relationship-damaging court proceedings, but it can also help maintain good neighborly relations in the community.
Con: HOA Mismanagement Can Be Costly
This can be a pro or a con, depending on what your timeline is and your expected return. If you are buying a residential property with the objective of building equity and value over time, then spending money on the annual HOA dues may be worth it, in the context of your investment risk tolerance. However, if you may be able to better use the likely hundreds and possibly thousands of dollars per year that it will cost to be part of a homeowners’ association, then it may be a better fit for you to find a home in a neighborhood without an HOA in place. You may still be able to make a sound property choice while saving overall on monthly and yearly costs.
Is An HOA Right For Your Next Home?
There are a lot of really solid reasons why being part of an HOA can benefit you and your next home purchase. On the other hand, there are some significant reasons why you may be wary of moving into a neighborhood managed by a homeowner’s association. So, before you give any home on the market serious thought, make sure you know ahead of time all the details of any HOA and how they may impact your future enjoyment of your home.