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HOA Pros And Cons - Is An HOA Worth It?

Certified Mortgage Advisor
NMLS 1701021
December 6, 2019

HOA pros and cons and are they worth it?

So let's go ahead and dive into the pros and cons here of HOA. It's not going to be too long. We're going to cut down on the meat as quickly as possible. There's tons of stuff going on with HOAs, whether you're in a condo or you live in a neighborhood. They all look different, wanted to break down some of the main pros and cons here.

Pros 1: Keeps things tidy and home value high

So let's start with some pros first. The main pro of HOAs is they're going to keep everything tidy and keep that home value going up. So HOAs are going to help set some rules for the neighborhood that you're in or the community that you're in that way everything is tidy and kept neat.

You're not going to have neighbors who are putting like decorative gnomes in the front yard. If that's against your HOA rules, everything's going to be very standard and they're gonna make sure that people aren't putting up sheds or fences or things that could take down the overall look of the neighborhood.

This is going to make sure that your home value continues to stay on the same level or increase in the future. 

Pros 2: Amenities

Also with an HOA, you're going to get some amenities. So most often with HOAs, these amenities look like things like a pool, possibly a fitness center may be some security you might have a gated community, or it might be open.

But normally an HOA is going to have some sort of amenity with it. This is more common in a condo. HOAs might not be as common in a more neighborhood-style HOA, but it really depends on what the HOA is going to look like. And if you're looking at buying a house with an HOA, you want to look into the scope of what the HOA does and offers you and make sure that it's worth it.

Because frankly, there are some major ways that ask for a lot of money and fees, but they don't provide a lot of amenities. And on the opposite side, there are some agencies that have really great amenities. Maybe you have a gym and a pool and you really want access to those things.

Pros 3: Reduced responsibility

Also, you're going to get reduced responsible. So this is where with a normal house you're going to make, you're gonna have to mow the grass, possibly shovel snow. If you're in a colder area, like I am in Ohio, shoveling snow is a pain. Also, possibly things like maintenance. If you're in a condo you don't have as much of that. And if you're in something like a condo, you probably don't have to worry at all about any of that.

Most of that's taken care of. For you. So you're going to get some reduced responsibility of homeownership and there.

Pros 4: Community focused

Things normally going to be more community focused and you're going to find eight to R homes or condos with H ways tend to be more social. At least well-run ones are because the whole goal of an HOA is to form a community around one standard of living one standard of home.

Normally this creates a community atmosphere. Sometimes it can cause some HOA political division, which is always fun when that happens. More often than not. You're going to see that HOA putting together maybe events, or you might see the people on the HOA board looking to bring that community together.

Everything has a it's good and bad

So just as many as there are many pros on an HOA, there's as many cons as well. It really depends. HOAs are polarizing. You might love them or hate them. It's hard to find people who are in the middle a little bit.

Cons 1: Limited Freedom

One big thing here is you have limited freedom, so changing things. Can be difficult. So if you want to change the exterior of your home might be a little bit difficult, even things like if you like to not cut your grass for a few months you're going to run into some problems with your HOA. If you want to build a barn or a fence or anything that you're going to change that could change the look of the home. You're going to have to make sure that you check HOA bylaws and make sure that you're within those rules. Otherwise, you could face some penalties.

Cons 2: Costly

This one is huge. HOAs can be very costly. They can be several hundred dollars per month, and this might be beneficial for you if maybe it comes with a pool and a gym and all of this, and you actually are using it. I know a lot of people who are in hos and they initially talked about, yeah, it has a pool and it has a gym and they never go. Like I do with my gym, that was fun to pay for a year membership and never go If you're going to pay for it, make sure that you're using all of the benefits of it.

Weigh your options

I do know with an HOA, sometimes the cost is so much. If all you're looking for is somebody to shovel snow or mow the grass. I was talking with a retired vet who was looking at buying his first home and he wanted to buy a condo. Mainly because he didn't want to have to mow or shovel snow or worry about any of that. And, had a conversation about what he was looking for, and why he wanted to buy a condo.

And first of all, Ohio housing is really cheap. So these numbers might you might be a little amazed at these numbers, but he was looking at buying a $60,000 car. With an HOA fee of $250 a month. So as we were talking through, we explored some different options.

And with his realtor, he ended up buying a house that was $90,000, and then he could make the difference in his payment. The $90,000 house was actually cheaper per month. And then he could just pay for someone to mow and shovel snow. Monthly, because that's all he was looking for. And so in this, he increased his wealth and his potential for appreciation in the future, along with having a yard and more freedom and control that he wants to instead of being subject to the HOA.

So just consider, looking at the other options HOA might not be the solution for you. You also can pay, there are services for people to do those things for you, and they probably are cheaper than an HOA doing them for you.

Cons 3: Less privacy

Also less privacy. If you're in an HOA, you're probably close to people. You're either in a neighborhood or a condo. And again, HOAs tend to be tighter-knit communities. So you're going to have less privacy. You're going to have more people around this can either be a pro or con for you. If you're like most people usually tends to be a con. Maybe you like to have a lot of land or distance between you and other people.

And if so, HOA, there probably aren't gonna be any homes with an HOA that you like, because they don't have that flexibility for you. And you're just in a tighter community. You're going to have more oversight of things that you want to do. Which could feel like it's invasive to your privacy a little bit. So something to watch out for.

Cons 4: HOA trouble

Subject to HOA trouble. So some mismanagement politics. We often see this in things like shows on TV, where there's always, the kind of snobby HOA person who's always going through and winding it to make sure everybody's houses are in line and everything is edged up and neat and clean.

HOA finances

This isn't always true, but with an HOA, your subject is number one to the management of that HOA. So if they're handling the finances properly, great, you'll never know about it. If they're handling their finances poorly, that's not so great. You're probably going to hear about it. You may have to pay extra dues or an assessment to help that HOA get more financially stable, something to watch out for.

You can check HOA's financial status

You can get these documents when you purchase a home. When you get under contract, you can put in a review period of time that you want to see the HOA docs before you move forward with the contract and you can see things like the financial status of that HOA. So you can make sure that they're financially healthy and viable before you move forward with that purchase.

Politics is not just in the government, it also be can be in HOA

Also, you're subject to some of the politics as well, depending on how the board is set up, and who's elected to it. Who's on it right now. And what kind of standards are.

Make sure you read through the rules and regulations

There are some HOA that is super laid back unless you want to go put a playground in your front yard. Others are super strict on the way that everything is handled and laid out.

And you're really just going to have to read through the rules and regulations of the HOA to determine if that's the case and maybe even ask neighbors, to see their opinion of the HOA. Have they ever run into any problems or the things that they tried to do that the HOA has had complications with, or has it been a breeze for them.

What to choose? It's all up to you

So that wraps it up. These are the pros and cons of HOAs. There are some other nuances that tend to be the big things that you want to run through. Really, you're going to have to assess the HOA that you're looking at buying. HOAs can be so drastically different from one another. There they're not cookie cutter. They don't all do the same stuff. Some are easy. Some are not so easy. Some are expensive. Some are not so expensive. Some offer a lot, some offer very very little.

Really, you're going to have to be the judge of what that looks like for you and your family. And if you want to move forward with a home, with an HOA.

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Kyle Andrew Seagraves is Federal Mortgage Loan Originator (NMLS 1701021) licensed in all 50 states with the Dan Frio Team at Allied First Bank (NMLS 203463), an Equal Housing Lender. Separately, Kyle owns Win The House You Love LLC, an education company. Win The House You Love LLC is not a lender, does not issue loan qualifications, and does not extend credit of any kind. This website is only for educational usage. All calculations should be verified independently. This website is not an offer to lend and should not directly be used to make decisions on home offers, purchasing decisions, nor loan selections. Not guaranteed to provide accurate results, imply lending terms, qualification amounts, nor real estate advice. Seek counsel from a licensed real estate agent, loan originator, financial planner, accountant, and/or attorney for real estate, legal, and/or financial advice.

Servbank is not affiliated with the VA, FHA or any other government agency. This site has not been approved by any government agency.
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