Should You Buy In A Neighborhood With A Homeowner's Association? 2 Things To Consider
When shopping for a home, it's important to consider the neighborhood you're moving into as well as the home itself. After all, you want to know if you're going to feel like you fit in with the community. That's especially true when you're considering a home in a neighborhood that's managed by a homeowner's association (HOA). There's no way around interacting with a homeowner's association if you buy into one, so it's important to understand how they work. That way you can decide whether or not the neighborhood is a fit for you.
Learn How HOA Fees Work
One of the biggest impacts any homeowner's association is going to have on your purchase is how it will affect the price of owning your home. Living in a neighborhood with an HOA requires paying yearly dues. These dues are based on two types of expenses: current year operations, like gardening or insurance, and long capital items, like road repairs. Whatever dues you pay will be divided among these two types of expenses.
Before you purchase, you'll want to know not only how much the annual dues are at the present time, but what they'll be used for and how those expenses are likely to increase over time. Higher dues should translate into more community benefits that you'll be able to take advantage of. For example, if one neighborhood has a community pool, and the other does not, but all other features of the neighborhoods are equal, your dues should be higher for the neighborhood that has to cover the expenses of a community pool. If having access to a community pool is a feature you're looking for, then it should be worth paying higher dues for that neighborhood.
Homeowner's association dues increase for several reasons, including rising costs of material and labor, failure of some members to pay dues, and unforeseen expenses or imperfect budgeting. It's also worth keeping in mind that if the HOA doesn't make enough in fees to cover needed expenses, they'll simply use a special assessment to charge homeowners for the difference. Ideally, budgeting should be as accurate as possible to avoid special assessments or exorbitant annual increases. Before you buy, ask for a printed history of dues for the last several years, a record of any special assessments, and a record of the association's reserve fund, as well as a list of expenses that are covered by your HOA dues. That way you'll know how your money will be used, and you'll get a reasonably accurate picture of how you can expect dues and other charges to change over the years. This will help you decide whether the HOA you're considering is affordable for you, as well as whether you consider it worth the money.
Understand HOA Rules
Next to paying dues, the biggest thing that you'll have to get used to when dealing with an HOA is the rules that you'll have to abide by. Rules vary widely from community to community, so it's important to get specifics. Some associations have strict rules for everything from how high you can allow your grass to grow to whether you can park your car in your driveway. Others take a more relaxed approach, setting few rules or only setting rules that pertain to common areas, instead of to the homeowner's private property. You also need to know how those rules are enforced – fines for violations can pile up quickly, and in some cases, an HOA can foreclose on a house with too many unpaid fines.
Ask for a current copy of the community's covenants, conditions, and restrictions (CC&Rs), and study it carefully. Some communities require homeowners to use pesticides and herbicides on their lawns, or ban things like solar panels. If environmental conservation is important to you, those communities may not be a good fit. If you are the type of person who simply dislikes being told what to do, you may not have the temperament for an HOA. Be honest with yourself about whether you can live by the regulations as they exist. Even if you're fine with the HOA rules, check to make sure that the property you want to buy is already compliant with HOA regulations before you decide to buy. You don't want to purchase the property, then find out that you need to make expensive changes to bring the property into compliance.
Homeowner's associations like J & N Realty, Inc. can have many benefits, from keeping property values high to providing great community amenities. However, they aren't for everyone. Make sure that you know exactly what you're getting into before you make a deal on your next home.