The Pros & Cons of Living in an HOA Neighborhood

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Real Estate

If you are on the hunt for a new house, you are likely to come across at least a couple of properties that are part of a homeowner's association, or HOA. Over 40 million homes across the country are governed by them. There are inclusions like amenities featuring swimming pools or clubhouses that make it tempting to gloss over the realities of living under an HOA, however, you mustn't do this.

It is important to understand the HOA rules, which you have to abide by if you purchase a home there. They can touch on anything from making improvements to your home to where you park your car. There are also other aspects of HOA to consider.

Here are the pros and cons of community living to help you decide if it's right for you.


HOA's Come with Amenities

Buying into an HOA might give you access to amenities like a tennis court or fitness center that you might not otherwise be able to afford, or be able to enjoy such proximity to your home.

Responsibilities are Reduced

The fees you pay to an HOA go toward services, such as snow removal, and maintenance that you might otherwise have to perform, or contract for yourself.

Appearances are Kept Up

HOAS will typically have rules in place to prevent property neglect, resulting in neighborhood decline. They can also help to maintain the property values of the homes within the community.

You can Sell for More Down the Line

Single-family homes tend to sell for 4% more than the average home outside of HOAs. This tends to be higher for larger houses and homes in smaller subdivisions, and it declines as homes age. Part of the reason for this is because of conformity in a planned community: minimum square footage for homes, certain styles of homes, and certain restrictions.

Cut Down on the Bills

Although HOAs vary, one cost frequently included in the fees they collect is utilities. An HOA often takes responsibility for basic water and gas, as well as city services like sewer, trash, and recycling. That cuts down the number of bills you'd pay each month.


HOA can Foreclose your House

If you are behind on your fees, the HOA might be able to foreclose on your home, though the process of doing so will vary on what state you live in. HOAs can only use foreclosure as a "last resort."

Assessments can be Sprung on You

If the HOA doesn't have cash reserves to cover an expenditure, it can impose an assessment to come up with the money. This is important since many HOAs are currently underfunded.

An HOA Might Stop You from Renting your Place

HOAs can put an array of rental restrictions in place. Some associations limit rentals, disallow certain pets, and screen prospective renters.

Put Away Brightly Colored Paints

HOAs have meticulous guidelines, particularly about homes' exteriors. Many neighborhoods will come with approved exterior paint color palettes that list Sherwin-Williams paint names and reference numbers for accuracy, although residents can use any brand that matches these colors.

How to Determine if an HOA is Right for You

If a home is in a planned community that catches your interest, sure as part of the disclosures to ask for the HOA's declaration or master deed, as well as answers to standard questions, like the HOA's financial status and whether the home you like has any outstanding debt to the association. Review your budget and lifestyle to determine your personal preference. Having the use of a pool and clean nearby parks might hold strong appeal, noting to pull in the trash cans or the kids' bicycles by a certain time might be something you don't want on your to-do list.

Consider the pros and cons of your own lifestyle and get familiar with the community rules before you buy—you just might find that association living equally as satisfying for you. Explore the best of Palm Desert today.