Understanding Homeowners Associations: Pros and Cons
Homeowners associations, also known as HOAs, are becoming more and more popular. According to studies, there were 10,000 communities that operated under an HOA in 1970. As of the end of 2023, there were 365,000. Real estate experts expect there to be around 370,000 HOAs by the end of 2024.
With this in mind, it’s safe to assume that people who are looking to purchase a home need to consider how viable living in an HOA is for them.
Yes, there are plenty of houses on the market that aren’t under an HOA’s jurisdiction, but with these communities growing at such a steady rate, you may find yourself loving a property that’s part of an HOA.
Additionally, if you’re planning on moving into a condominium complex or a luxury apartment high-rise, you may find yourself dealing with an HOA. These entities aren’t only involved in single-family housing.
Today, learn more about what HOAs are, some of the benefits that they provide, and some of the drawbacks. This will help you ensure that you’re making an informed decision about your housing situation.
What is a Homeowners Association?
At the most simplistic level, an HOA is a government entity that enforces rules within a community. These entities can exist within condominium complexes, high rises, apartment complexes, or neighborhoods that are made up of single-family homes.
The people who live in these communities are responsible for paying membership fees. The HOA then uses the money collected from those fees to maintain or even improve the common areas shared by the members of the community.
There are plenty of misleading videos and articles on the internet that depict HOAs as something that they’re not. However, these types of communities are not right for everyone.
Now that you have a better understanding of what an HOA is, let’s take a look at some of the pros and cons of HOAs that you’ll need to consider before signing the paperwork on a property that you’re interested in.
Benefits of an HOA
Contrary to what you may have heard, HOAs are not all about fees and control. There are plenty of people who only want to purchase homes that are in an HOA, which means they must offer some benefits.
Before we get into some potential cons of an HOA, let’s spend some time looking at the pros.
Improved Aesthetics
Have you ever had a neighbor who didn’t care as much about what their property looks like as you do?
Maybe you’ve dealt with the headache of being one of the only people in the neighborhood who regularly mows your lawn.
That won’t be the case in an HOA because the guidelines that are put in place by the HOA’s leadership ensure that everyone is taking care of their properties, which creates a more appealing look for the entire neighborhood.
This is also why property values in communities that have an HOA are typically higher. When your home and the homes around yours are all aesthetically pleasing, property values increase.
By establishing and enforcing codes that focus on lawn care, exterior paint colors, how many vehicles can be parked at a single property, and more, HOAs actually create a more appealing community for everyone.
Improved Conflict Resolution
At some point, most people have some sort of conflict with their neighbors. No, this doesn’t have to turn into some sort of feud that lasts for generations, but conflict is normal when you have people dealing with one another.
Depending on the type of neighbors that you’ve had in the past, you may have seen these conflicts turn into something incredibly contentious that involves lawyers, surveyors, and other legal aspects.
Even if things never went that far, you may have seen relationships between neighbors turn sour over a simple misunderstanding or another form of conflict.
HOAs typically have policies in place that aid in conflict resolution, which helps everyone involved in the conflict get an answer without going through an expensive legal battle.
Whether it involves property disputes, noise complaints, or some other point of contention, letting HOA leadership use the written conflict resolution plan that they have in place is one of the biggest pros of an HOA.
Improved Security
Many HOAs have security measures in place that protect residents and their properties.
For instance, if you purchase a condo that’s in an HOA, you may have trained security staff near the entrance of the building and policies that ensure that people who show up at the complex are there to visit a resident.
If you’re looking at an HOA that governs single-family properties, there may be gates near the entrance to the community. Most HOAs invest in security cameras that cover the entire area that’s under HOA governance, which makes everyone feel safer.
Safety and security are among the most important aspects of homeownership for most people. If you want some of the most secure housing possible, an HOA may be a great choice for you.
Access to Amenities
One of the biggest benefits of an HOA involves the common areas that we briefly discussed earlier. When some people hear about the fees associated with living in an HOA, they assume that the money just goes to the people who oversee things.
That’s not the case. Instead, most of that money gets invested into the community to maintain and improve those common areas, which include pools, tennis courts, gyms, and other luxuries.
When deciding if this benefit is appealing enough for you to purchase a home in an HOA, think about how much you would need to spend to have access to these luxuries, along with how much money you would spend traveling to and from them.
Having access to amenities like these, often within walking distance of your front door, is a huge benefit.
Drawbacks of an HOA
If you’re being completely honest with yourself, nowhere that you live is going to be perfect.
With this in mind, you have to be willing to negotiate a bit on which cons of an HOA are worth the benefits they provide.
If you find that these drawbacks are simply too strong, you may find that an HOA isn’t for you.
Membership Fees
Depending on where you live, you may find yourself paying a mortgage, insurance, and property taxes.
For many people, the thought of adding regular HOA fees into that equation is just too much. Yes, it costs money to be a part of an HOA, but as we’ve discussed, you do get some benefits for spending that money.
However, if you’re not interested in spending more in addition to your house payment, homeowner’s insurance, and other monthly bills, an HOA may not be the best option for you.
Rules and Regulations
For some people, the idea of having someone dictate when they mow their lawn, how long the grass should be, what color they paint the outside of their home, and how many cars they can park in the driveway is just too much.
Undoubtedly, there are some HOAs out there that have some ridiculous rules. Fortunately, nothing says that you have to move into an HOA with rules that you can’t envision yourself abiding by.
Before you commit to a property that’s in an HOA, spend some time reviewing the rules and make sure that you’re not going to run into problems with abiding by those rules.
Lack of Autonomy
Not being able to make decisions about a property that you’re paying for is a sticking point for some people.
The rules and regulations that HOAs put into place, which are largely designed to protect property values and improve the safety of the community, may make you feel like you have no control over a property that you’ve purchased.
This can lead to some conflict between homeowners and the board members who govern the HOA, especially if there are issues with how the HOA is run.
Is an HOA Right for You?
Weighing out the pros and cons of living in an HOA is not something that you should rush through. Choosing the right place to live is an important decision and purchasing a home is the biggest investment that most people will ever make.
If any of the potential drawbacks of living in an HOA outweigh the benefits for you, it may not be the right move, at least not at this point in your life.
Spend some time reflecting on what matters the most to you, how long you plan on staying in the next home you purchase, and other factors and make an informed choice.