For anyone in the market for a new house, joining a Homeowners Association (HOA) and obtaining property in a planned community can be an attractive option. It can also be confusing. For those who’ve never been a part of an HOA, understanding what the advantages and disadvantages of joining one really are can be tough.
With that in mind, here are some of the things you should know before deciding if an HOA is right for you.
HOAs aren’t free. Becoming a member of one requires you to pay dues, which can have a big impact on your cost of living. While an online house payment calculator can give you a good idea what your future mortgage will cost you, it’s important to factor in HOA dues when determining your budget.
You won’t be the only one doing so; your mortgage lender will also consider HOA dues when deciding if you can afford their loan terms. This may result in you needing to decide whether the expense of HOA membership is worth the effect it has on your mortgage. The choice is up to you.
Joining an HOA has no shortage of benefits, although different HOAs offer different amenities and advantages. The main purpose of any HOA, however, is to maintain property values so that you know you’ll be able to sell your home for the same amount you bought it for, if not more.
Maintaining those property values comes with a cost, naturally. All HOAs have certain guidelines in place to ensure this goal is met, and these guidelines often limit a homeowner’s autonomy to a certain extent. You may, for instance, be forbidden from painting your home a certain color, installing certain kinds of additions, or even owning a pet.
Failure to abide by an HOA’s guidelines can result in a homeowner receiving punishments. These can include everything from verbal warnings to small fines to full-blown lawsuits and even foreclosure. Just as every HOA’s approach to amenities is different, every HOA’s approach to punishment varies widely as well.
That’s why, before joining, it’s a good idea to research how HOA conflicts were settled in the past. It’s vital that you know your rights and responsibilities in order to avoid becoming an HOA horror story. Simply put, if the consequences are more than you’re willing to risk, HOA membership just isn’t worth it.