HOAs are like extended car warranty salesmen – it’s getting harder to escape them. Approximately 30% of the US population live in HOA communities, and monthly dues are $200-$300 on average.
When you’re looking to purchase property within an HOA, I highly recommend:
- Requesting the HOA’s charge schedule. This document should outline historical HOA due increases over a given period of time. If given the option, I’d look at the last three to five years to see how often HOA dues have increased.
- Fully understanding what amenities the HOA provides. Paying a monthly fee may be worth it if they cover things like snow removal, depending on where your properties are located.
- Asking what their most frequently broken rules are. This can give you a sense of the HOA’s rigidity.
- Requesting to speak to other investors whose rentals are a part of this specific HOA. They can offer you greater insights into the hassle (or benefits) this particular organization offers.
Best of luck out there!
we buy outside of city limits, to avoid having HOA’s on the properties.
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My last property had a fee schedule posted for the year and then halfway through the year they voted to double it. In year 2 they voted to increase again. They kept to that fee schedule but they saw costs go up to manage and passed it along. Feels like a risk I want to avoid next time
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My HOA keeps increasing our dues every year due to inflation (and I’m dying every time). I would double check that if they have not increased prices in the last two years that they might do so really soon.
