In Defense of HOA’s

More than once I have been told by a buyer that they don’t want to look at any properties that are part of a Home Owners Association.  When asked for more information the most common answer I hear is “it’s too much money every month that is not going toward the principal on my mortgage.”

           

At first glance a $350 a month HOA payment in addition to your principal, interest, real estate taxes and insurance costs may seem like a lot.  However, it is important to understand what you are getting in return for that money.  Here in Summit County, CO the most common HOA inclusions are Cable TV, water, sewer, trash pick up, snow removal and common area maintenance (this may include a common hot tub or club house).  Admittedly, you can probably get cable, water, sewer, snow removal and trash pick up for less than $350 a month but, you will have many separate bills to pay so there is a convenience factor.  More importantly though, a portion of your monthly HOA payment is going to be put into the HOA’s reserve account.  Down the road when the building needs repair it will be paid for from this reserve account.  If you do not have an HOA you will be solely responsible for any expenses and if you haven’t been saving for it, you could be in real trouble.  Lastly, imagine the worst case scenario of a catastrophic roof problem that causes more expenses than what is in your HOA’s reserve account.  Without an HOA you would be solely responsible for the difference but with an HOA, that amount gets divided by all the members of the association which could save you thousands.

All of this being said, it is very important that you take a look at the HOA’s financial statements before purchasing a property in any association.  If the HOA is weak financially, it could lead to all sorts of unforeseen costs typically in the form of the dreaded special assessments.  Nevertheless, a strong, well run HOA can take away many of the worries associated with home ownership and provide financial security.

As always, if you have any questions about this or anything else pertaining to Summit County Real Estate, please feel free to contact me anytime at the information below.

All the best,

Tyler MacGuire  e-PRO®

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

       

“Your Guide to Summit County Real Estate”