Benefits And Challenges Of A Homeowner’s Association

A lot of buyers try to avoid purchasing a home that has a homeowner’s association (HOA) to avoid the monthly dues and because they feel the covenants, conditions, and restrictions (CCRs) can make life difficult.  But, there are actually benefits to having an HOA.

Often buyers think that if a neighborhood has CCRs, there is no reason to have an HOA.  The problem with this reasoning is that CCRs are just the rules for a neighborhood.  They are worthless if no one enforces them.  Neighborhoods all tend to look really nice when the homes are new.  But, over time, a few of the homes will fall into disrepair and owners won’t take care of their yards.  Residents may also park boats, RVs, or non-running cars in the driveway which can be an eyesore.  People may play loud music or have wild parties on the weekends.  And, owners may repaint or make additions that don’t flow with the character of the neighborhood.  A strong HOA can enforce the CCRs to protect the integrity of the neighborhood.

Another HOA benefit is the common areas.  This includes a basketball court, clubhouse, park, privacy gates, or swimming pool.  These amenities make a neighborhood more desirable.  All the homeowners share these costs which keeps each owner’s cost reasonable.

Try to see the big picture when it comes to HOAs.  They actually do a lot of good for you as a home owner.  Read my last blog about possibly hanging on to your home long term instead of selling.  I still have my first home I bought back in 1994.  It just appraised for $218,000 more than when I bought it.  A strong HOA can prevent a neighborhood from going downhill over time which can protect the value of your home.

So maybe at this point you are warming up to the benefits of an HOA.  Double check with your lender since the monthly HOA dues will erode your home purchasing power.  (Essentially stack the monthly HOA fee on top of your house payment.)  Also, get a copy of the CCRs for your neighborhood to see what the expectations are for home owners.  (Maybe you want to operate a home business or plan to rent the home if you move away?)  Make sure the home you are thinking of purchasing will suit your needs now and into the future.