There’s a lot that you should know about a Homeowners Association (HOA) and how it affects not only your home purchase but also property value. It can be a great feature, but knowing what it will offer and how it will constrict you is of the utmost importance.
What is an HOA?
HOAs is an association that has a board and a set of rules as to what “can” and “cannot” be done to individual properties. The association’s fees could be monthly or annual, depending on the association.
In most instances, fees vary from $200 to $400 a month. This is in addition to your mortgage and escrow payment. Due to the cost, it’s something to keep in mind as it might put a home outside of your price range.
The fees will go towards the upkeep of common areas, such as landscaping and swimming pools. Some association fees are higher because of the amenities that are provided. Whether you live in a single-family home or a condo, you might have a fitness center, walking trails, and more that are accessible to you as a homeowner. All of these shared amenities are covered by the monthly or annual fees.
How can an HOA affect your home purchase?
There are several things you need to know about a homeowners association. One might be very different from others you have dealt with in the past. It’s a good idea to familiarize yourself with the by-laws. There might be rules about parking on the street, where you can store your garbage cans, and even if you’re able to fence in or put an above-ground pool on your property.
You need to know about the “dos” and “don’ts” before you purchase a property. If you want to do things to your home or within your community that are banned by the association, that home inside that community might not be right for you.
Additionally, many homeowners’ associations will require you to fill out an architectural review board application if you plan on modifying your home in any way. This could include fences, gutters, paint colors, and landscaping. The applications don’t cost anything, but if you are requesting something that is not accepted, you could get rejected. If you decide to go forward with the changes anyway, you could incur fines for not following community guidelines.
The good thing about having such an association, however, is that it can protect your home value. You never have to worry about a neighbor painting their home bright pink or another neighbor putting old cars up on bricks in the front yard. While some of the requirements might not be ideal for you, it helps to maintain consistency. It keeps all of the homes looking their best, ensuring that you have a great community for years to come.
Do Your Research
When you’re looking to purchase a home, find out about the homeowners association. Learn about the costs per month or year so you can add it to your total home payment and make sure it is within budget. Also, find out about how the association might limit what you and can’t do around the community and to your home.
Your property value is likely to go up with an association. When you get a lot of great amenities, and it keeps everyone’s homes looking their best, you’ll often be glad you purchased a home with a home owners association, as long as they have reasonable rules that you can live with.
