Thinking about buying a home in an HOA community? Before you decide, learn how rising fees, strict rules, and unexpected fines might make homeownership more expensive than you anticipated.
HOAs Are Taking Over, And They’re Coming for Your Money
Published on Oct. 10, 2024
If you’ve ever bought a home or gone through the house-hunting process, you’ve probably heard of homeowners associations (HOAs). Love them or hate them, one thing is clear: HOAs aren’t going anywhere. In fact, a study by the Foundation for Community Association Research found that 3,000 new HOAs are expected to form in 2024 alone, and their growing presence might just be making it more expensive for you to own a home.
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What Is an HOA?
An HOA is a governing body for certain neighborhoods or communities. Developments with shared amenities like parks, swimming pools, or community gyms, are likely part of an HOA. Homeowners in HOAs pay regular fees to maintain these common areas, cover community expenses, and keep the neighborhood looking spiffy.
HOAs are intended to ensure the community looks neat and tidy, rules are followed and amenities are well-maintained. You know, that lush, green lawn in the front yard? Or that sparkling pool down the street? That’s where HOA dues come into play.
However, they do come with drawbacks, which is why some homebuyers outright refuse to move into an HOA community.
Cons of an HOA
Another factor making HOAs costly is enforcing their sometimes very particular rules. Most HOAs have an extensive list of dos and don’ts for homeowners, and failing to comply can lead to fines.
Want to paint your front door bright red? Better check with the HOA first. Thinking about planting a small veggie garden in your front yard? Depending on the community rules, that could be a no-go.
It’s not uncommon for homeowners to find themselves fined for seemingly harmless actions—like leaving a trash can out one day too long or failing to pressure wash a driveway. Fines are another source of income for the HOA, ultimately making it pricier to own a home in an HOA-managed community.
Why Costs Continue to Rise
When you first buy a home, you probably budget for your mortgage, property taxes, and maybe homeowner’s insurance. HOA dues can be a hefty added cost that buyers often underestimate or overlook entirely. These dues vary widely, from as little as a few dollars per month to thousands.
One of the biggest reasons HOAs are making homeownership more expensive is that they tend to escalate their fees annually. Even if inflation isn’t skyrocketing, HOA fees usually keep ticking upwards. It’s easy to feel blindsided when, in just a few years, you’re suddenly paying double what you were initially.
Plus, many HOAs also impose special assessments—one-off charges for unexpected expenses, like major repairs to a shared roof or pool maintenance after a particularly rough winter. These assessments can be hundreds, if not thousands, of dollars on top of regular dues.
What to Consider Before Moving Into an HOA Community
If you’re considering buying a home under an HOA, do your homework. Ask about HOA fees and whether they’ve been increasing. Review the rules to ensure you’re comfortable with any restrictions on pets, parking, or holiday decorations. Attend an HOA meeting to understand how the board operates—whether they’re reasonable or overly strict.
HOAs can be a mixed bag. Some homeowners value the security and upkeep they provide, while others find the costs, rules, and conflicts burdensome. Before buying into an HOA, understand the trade-offs. A little research now can save you money and stress later.
Source:
Foundation for Community Association Research: “Statistical Review: Summary of Key Association Data and Information” 2023
