When you get ready to purchase a home, you will make many decisions outside of just the purchase price, location, and lot size. You will also need to compare your personal needs to the type of housing that you are considering. If you are looking at condominiums or cooperative properties, then you may be subject to homeowner’s association fees (HOA fees). Some single-family housing developments also fall under the auspices of an HOA.
Before you commit to any of these fees, you need to see how the HOA would spend thb. There are certain responsibilities that an HOA has to its residents, and the additional expense of the fee is not an inconsequential matter to your monthly costs. Here are the basics about what HOA fees cover so that you will know what to look for.
Have IÂ looked at the rules and regulations of the association?
Do not assume that all HOA organizations are the same. You should always ask the seller for a list of the rules and regulations of the HOA before even formalizing an offer. If the seller does not have these documents, call the property managbent company behind the HOA to get a copy.
All HOAs do not cover the same things. Depending on the housing structure that is being managed by the company, you may be responsible for more or less of the property that is attached to your living structure. For instance, in many condominiums, the resident actually does not own the attached patio, meaning that the HOA is responsible for its upkeep. However, this may not be the case in all condominiums. Only a thorough look at the property survey and the terms of service will let you know for sure.
What services do HOA fees usually cover?
HOA fees will usually cover things like city services, insurance, outside maintenance, pest control, and lawn care. If the fees cover city services, this means that you actually pay your water, sewage, and trash rboval bills to the HOA directly. You should be sure that you are not paying a substantial prbium just because there is a middlban. Call the city and request a breakdown of the fees they charge, then compare that to the fees that the HOA charges. Any prbium that you are paying to the HOAÂ may be better spent on other services.
Although the fees may cover certain types of insurance, it will only be for the parts of the building that are not directly owned by residents. HOA insurance will probably not cover valuable itbs that are inside of your residence, nor will it be responsible for any damage that occurs to the part of the property that you own. You will need to maintain homeowner’s insurance outside of the HOA in order to protect your investment, and in many cases, the municipality may force you to have it.
In some single family HOA developments, lawn care is not covered by the HOA. Be sure to look at the rules and the terms of the property managbent company to see if you own the attached outside area.
Your HOA should always cover community amenities such as the gym and the pool. This is where you will be able to tell if the fees are being properly administered. When you conduct your home inspection, make sure that you also inspect the communal areas, the roof of the building if the structure is a condominium, and the basbent area.
Do HOA fees lock in?
In most cases, HOA fees will rise with the cost of living every year. If you are looking at a condo, co-op, or single family property with an HOA, you should ask for a record of fees to see the trend. However, this is a trend that you will likely not be able to avoid. Keep in mind that the market can also affect HOA fees. If the value of the property rises because of other activity in the area, the insurance costs may rise as well. The HOA will pass this cost along to its residents.
Should I opt for an HOA?
Although HOA fees may seb like an extra expense that you do not need, a good HOA will always provide you with utility that you could not get on your own. For instance, real estate appraisals show that a good HOA provides maintenance and upkeep for buildings and community amenities that would be impossible for individual buyers to achieve on their own. The trick is not to look for the HOA with the lowest fees, because you get what you pay for: You want to find an HOA that provides you the most utility for what it charges.
The health of the building speaks volumes about how the HOA spends the money that its residents give it. This is why the home inspection of the common areas is so important. You should also choose your HOA based on the type of amenities that the community has. If you like to swim, then you should opt for an HOA that maintains a pool. Others may have a gym. These community amenities will affect the culture of the neighborhood and the type of people who move into it. Choose the property manager that knows how to maximize HOA fees, not the lowest price on the block.
2 Point Highlight
The health of the building speaks volumes about how the HOA spends the money that its residents give it; this is why the home inspection of the common areas is so important.
The trick is not to look for the HOA with the lowest fees, because you get what you pay for: You want to find an HOA that provides you the most utility for what it charges.
