When you are starting the home buying process, you may run into homes that are in homeowner's associations (HOAs). If you do not know what they are, it helps to know these 3 things before you seriously consider the property.
HOAs Require Additional Cost
When the neighborhood has an HOA, it will require an additional annual fee that you must factor into your budget. These dues go towards running the HOA, which include paying for upkeep and maintenance of the community. They can even go to the HOA board members to pay for their time running the association.
HOA fees are not something that go away once you pay off your home's mortgage, and fees can increase with inflation as the cost of maintenance gets more expensive.
HOAs Have Restrictions With Things You Can Do To Your Home
HOAs will have restrictions that can dictate what you can and cannot do with your property, and the rules are legally binding. If you decide to do things that do not conform to those rules, you could end up having to pay a fine and correct the problem.
For example, you may be restricted to using a certain kind of fencing around your property, make sure that your grass is cut on a regular basis, or limit the kind of landscaping that you can do in your front yard. While your city will typically have some rules that you must follow when owning a home, HOA rules are typically much more strict so that the community has a unified look and feel between the homes.
You should only consider a home in an HOA if you are comfortable with not having total control with the look of the outside of your home.
HOAs Can Offer Group Benefits
There are actually some great benefits of living in a HOA that you would otherwise not see. One of these benefits includes group insurance purchasing. You may find that you can save some money on your home insurance policy.
An HOA will also help ensure that the your home's value does not go down over the years. You do not need to worry about neighbors moving in that do not take care of their home, which can make your home look bad by being in the same neighborhood. It's one of the reasons why an HOA has the regulations that they do.
If you have questions about HOAs, be sure to ask your real estate agent since they will be very familiar with them.