An overhead image of an HOA neighborhood

As part of your new home search, you’ve likely heard the term homeowners’ association (HOA) or have even visited a few properties that are part of an HOA. Also referred to as a property owners’ association, an HOA is an organization that makes and enforces rules for multiple-unit buildings like condominiums and townhouses and planned communities of single-family homes. HOAs are typically run by resident homeowners elected to a board of directors that oversee the HOA’s management. This is often in conjunction with a professional HOA management company that oversees the operations.
If you buy a property with an HOA, you’ll be required to adhere to specific rules and regulations, and regularly pay dues, known as HOA fees. Wondering if this option is the right one for you? Like so many other decisions you’ll have to make when buying a property, you’ll need to weigh the pros and cons of committing to a property with an HOA.

The Pros

Access to Numerous Hotel-Like Amenities

One of the biggest appeals of living in an HOA community is having access to numerous amenities such as a swimming pool, tennis court, golf course, walking trail, playground, fire pit, community social activities, such as movie nights, game nights, theme parties, exercise classes, holiday events, and much more. Often hard to come by in traditional neighborhoods, these amenities give you the feeling of living in your own year-round retreat with access to plenty of activities.

Less Property Maintenance and Upkeep on Your Part

If the idea of living on a property with part of the area maintained at all times — with less effort on your part — sounds enticing, then a HOA property is the way to go. Most HOAs have rules about the community’s appearance, and unlike living in a traditional neighborhood, the association does an outstanding job of maintaining their common areas and amenities. Your HOA fee may cover everything from exterior building maintenance (e.g., painting, roof repair, etc.) to landscape maintenance to the operation of swimming pools, fitness centers and clubhouses.

Avoid Neighbor Disputes

From loud parties to property line disputes to barking dogs and unkept yards, having to deal with an unruly neighbor is never a pleasant part of homeownership.

If you’re living in an HOA, your community management team will not only discourage these issues in the first place, but they’ll help any neighborly issues get resolved as quickly as possible, sometimes imposing fines.

Stabilize and Potentially Increase Property Values

One of the benefits of having an HOA board is that they help keep property values from declining. How? By enforcing rules and acting quickly to keep homes in pristine condition they maintain the value and vibrancy of the community. This results in the neighborhood being more desirable to homebuyers, thus producing higher property values.

Thanks to the targeted services provided, homes in these communities tend to sell at a premium relative to houses not in HOAs. That means that if and when you decide to sell, you’ll most likely be doing so at a higher price than you would get if you were in a non-HOA community.

Furthermore, the presence of a tight-knit neighborhood can be a huge draw for potential buyers who welcome a friendly, community type of environment, and can help improve the property value of your home.

The Cons

Regular Fees

The downside of not ever having to break a sweat mowing your lawn or having access to a swimming pool that’s only feet away from your front door is having to pay for these perks. You’ll need to pay monthly dues in addition to your mortgage, insurance and property taxes so be sure to factor these in when deciding whether a HOA home fits into your budget.

HOA fees will cost homeowners around $150 to $400 per month. HOA fees can be lower or much higher depending on the size of the property and the services provided.

You should also be aware that, should you ever get behind on those fees, the HOA may choose to try to collect those dues through normal collection processes (like by making collection calls and sending letters), by filing a civil suit to obtain a personal judgment against the homeowner, or by initiating a foreclosure.

Poor Management

Like any governing body, HOA’s can be run effectively or managed poorly. Not all HOA communities are created equal. For the most part, HOAs are governed by capable board members that always put the community first. However, there are few out there that suffer from poor management, either due to a lack of time or expertise. Before purchasing a home in an HOA community, we recommend asking residents for their opinions on the management.

Once you contract to buy a property in an HOA, you will be provided with all rules, regulations and financial statements, including the amount of HOA reserves in case of an emergency. For instance, if a hail storm severely damages the common areas, your HOA should have money in reserves to fix at least part of the problem. Failing to have reserves could be a sign of poor management.

Limits on Personal Taste

A majority of HOAs enforce restrictive conditions in order to maintain consistency and curb appeal in the community. Depending on the HOA, that might mean you can’t paint the exterior of your house a certain color, must use a certain stain on your fence, or need to restrict what kind of furniture or decor you can place in your outside space. Some HOA communities even have rules about the number of pets and the weight of the pets that a resident can have living with them.

Before signing up to live in an HOA community, be sure to pay careful attention to content of the documents and bylaws provided by the seller or developer.

Living in an HOA community is not for everyone. But for many, it’s the right decision based on their lifestyle, personal preferences and budget. If you’re considering buying a home in an association, do your due diligence and consider the pros and cons before making your final decision. If you would like more information about HOAs in general or about specific HOAs in the Austin area, please reach out to us at (512) 482-8651.