The Ins and Outs of HOA Fees

My clients always ask me about HOA fees and whether they are worth it. Should we buy a home instead? Why pay all those HOA fees? Why are the HOA fees so high?

Here is my answer…Put pencil to paper. Figure out what the costs are for the following items (this is not a complete list and varies per HOA).

Snow removal  (I pay $190/month at my house).

Landscaping  (Oh please, this gets expensive. A spring and fall yard clean up can cost hundreds, each season).

Basic Cable TV (Yikes).

Internet (Double yikes).

Common Area Insurance and Taxes (HOA coverage of these items means you only insure and pay taxes on the interior of the property. Far less money than a home).

Roof Repair (Don’t even get me started).

Pool & Hot Tub (Do you have a pool and hot tub? I don’t have a pool and hot tub)

Some HOA fees also include all of the utilities. Think of it this way, you will know what it cost to own your vacation or rental income property when the HOA covers all of the utilities and common area. So when your guest cranks the heat and opens the windows, the cost is the same.

So, is it REALLY that much more to pay HOA dues than covering the tab on your own for the above expenses for a home without an HOA? Maybe, Because here is the clincher. When you receive the disclosers from the HOA that show the budget and meeting minutes, READ THEM. If the HOA is well run, then it’s a deal. If the HOA defers maintenance and is not well run, then run away.

Bottom line, do your homework. A well run HOA is worth the money. Better yet, join the board. That way you have more input on keeping on top of maintenance decisions and the budget. Always opt for an HOA board that is pro preventative maintenance. This will save you money in the long run.