HOA stands for Homeowners' Association. Often times, condominiums, homes in gated communities or particular subdivisions are part of an HOA. If you choose to purchase one of these homes, you must join the community's association and pay any applicable fees. Fees are typically paid monthly or quarterly and range anywhere from $35-$500. Although this may initially seem like a significant monthly expense to some, there can be many benefits of buying within an HOA. Every home buyer is searching for something a little different in their dream home. While purchasing a home in an HOA has some benefits, it is not for everyone. Read on for our lists of pros and cons to assist you in making your decision.
If you absolutely dread spending your Saturday afternoon doing yard work, you might consider purchasing a home within an HOA. Many HOAs handle the lawn care or the entire front yard to keep up the community appearance. At the very least, most of them handle all landscaping in community areas so you can be assured the streets, parks and playgrounds will always remain in good shape.
If you choose to buy a home in an HOA, its very unlikely that you will have to worry about the neighbor who paints their house bright pink or only mows the lawn a couple times a year. Your home owner's association will likely have a set of rules to prevent these type of things from happening. Most HOAs have a color palette that every homeowner must stay within. They likely will not allow peeling paint, unkempt yards and some do not allow for cars to be parked along the street.
If you want to live in an area where everyone knows their neighbors, you might prefer to live in a community that offers various social events. Although it is not always typical, many HOAs organize events for the whole neighborhood. In the past, I have seen Fourth of July Parades and fireworks at the community park, roads blocked off during Halloween to keep kids safe while trick or treating around the neighborhood, game nights at the community clubhouse, community garage sales that are advertised in the newspaper for you and sometimes even singles nights for the community. Living in an HOA can potentially give you a great sense of community that you may not find in other neighborhoods that do not offer these type of events.
Some HOAs offer amenities that would be extremely costly if you were to have them in your personal home. Many offer large, beautiful clubhouses with a chef's kitchen that are available for rent to an individual homeowner in the association. If you love entertaining and hosting for large get togethers, this could be a huge benefit for you! Many HOAs have a community pool, spa, gym, tennis courts, basketball courts, playgrounds or saunas. Some upscale condominiums even offer valet parking, valet dry cleaning and valet groceries! While not every association in general has this many amenities, many in Scottsdale do!
If you're having an issue with your neighbor's dog barking all night, cars blocking your driveway, loud parties or raking up leaves from the neighbor's tree that fall into your yard, you can always contact the management and have them handle the issue on your behalf. Having this conversation with neighbors directly can be very difficult for some people and may not solve the problem. Having the HOA to go to bat for you can be a huge benefit in some circumstances.
Rules, Rules, Rules
Having a perfect uniform neighborhood can come with a large rule book. Many HOAs have rules against parking RVs, boats, or recreational vehicles in front of the property. Having the freedom to park these kinds of vehicles in front of the home can be necessary for some homeowners. Most HOAs in Scottsdale and Phoenix only allow the homes within the community to be painted colors that you would typically find in the desert. For example, you may notice most homes are various shades of brown, tan or dark green. Some HOAs also dictate what type and the amount of flowers and trees you can plant. Some will not allow you to hang flags or particular decorations out front. If you are looking to show off your creativity and express your individuality, these rules could be a big downfall for you.
This is a big one! If you plan on renting out your property, make sure to check with the HOA and read your CC&R's before purchasing. With Airbnb properties on the rise, many communities have rules in place that prevent short term rentals. Some require board approval or potentially prohibit renting all together. Even if you plan on making the home your primary residence, it is hard to say what your needs will be in the future.
HOAs will typically send warnings for overgrown lawns, chipping paint or inadequate landscaping. However, if you are unable to fix the issue within the given time frame, you are subject to fines. Although most people purchase a home with the intent to maintain the property, unplanned events can happen that may prevent you from doing so.
Occasionally, HOAs may change their fees. Homeowners are not guaranteed that the fees will stay the same as the day they bought the home. If the cost of community upkeep goes up or many homeowners fall behind on their payments, HOA fees may go up for everyone. If you are late on your dues, the HOA may tack on late fees on top of it. In rare occasions, falling behind on HOA fees can cause your home to be foreclosed. Although these scenarios are not typical, it is a risk some buyers are not willing to take.
Buying a home in a community with a homeowners' association is not for everyone. You'll notice that some pros are also listed in the cons section. It really comes down to personal preference, what you plan on doing with the property and if the benefits for that particular assoation outweigh the cost. This is one of many reasons having a realtor by your side who is knowledgeable about the communities in your area is so important. Your realtor can help you do your due diligence before making an offer on a property in an HOA to determine if the rules, regulations and cost fits the wish list for your future home.