As you search for a new home, you might come across listings that are part of an HOA. It is estimated that one in five homes in the US are part of an HOA, especially when it comes to newer builds. David Sant with Cyprus Credit Union shared the following quick facts about HOAs and the pros and cons that come with buying an HOA property.
What is an HOA?
You've probably heard the acronym a lot, but you might not know what an HOA is. HOA stands for Home Owner`s Association; it is the governing body of a managed community. When you move into a community that has an HOA; condo, townhouse or planned development, you must pay a monthly or annual fee for your membership.
Pro - Amenities
An HOA neighborhood may provide you and your family access to amenities, such as a pool, tennis court or gym. These amenities might be something you wouldn't be able to afford otherwise; thankfully, these are included in your HOA dues.
Pro - Maintenance
Your HOA will handle the maintenance of common and shared areas in your development. They might also include snow removal, front yard care and more. The maintenance will vary based on the HOA so it's best to ask questions before moving to an HOA.
Pro - Mediate
The HOA will act on your behalf to resolve disputes with your neighbors. For example, if your neighbor is constantly throwing late night parties, your HOA will reach out to your neighbor to fix the issue.
Con - Fee
A monthly fee is incorporated into your monthly mortgage payment which could push you over your housing budget. Fees vary based on differing factors. Make sure you do your research prior to house hunting so you don`t fall in love with a home that has an HOA you can't afford.
Con - Restrictions
An HOA is able to set many restrictions that you wouldn't find in a regular community. For example, an HOA may dictate if you are can have a pet, what color you can paint your house, how you decorate during the holidays and more.
Con - Renting
If you are buying and HOA property to use as a rental, you might experience some roadblocks. HOAs have specific rules when it comes to renting a property. Be sure to read the HOA agreement before signing anything.
Find out more at cypruscu.com.