HOA Questions and Tips to Consider Before You Buy
Homeownership comes with a variety of ongoing expenses (beyond mortgage payments) that impact just how affordable your choice of housing will be over the long term. And when you're home shopping, it's critically important to understand these costs carefully to prevent being caught off guard down the road.
One of the most important and often irritating examples of this issue is the cost of homeowner's association dues, otherwise known as HOAs. If you're not careful and don't ask enough questions about a prospective HOA when considering a home purchase, you may be in for a rude awakening when, year after year, the monthly dues continue to creep up and up and up....until one day, your housing costs have inflated well beyond your monthly budget.
"The most pressing thing someone buying into an HOA community needs to know is whether the price tag going to change," says Kevin Taylor, managing partner with financial advisory services firm InSight. "The rising cost of monthly HOA costs can affect the quality of life for an owner while they live there, and the resale value of a property when they want to leave—both positively and negatively."
Homeowner's associations can certainly add a lot of value to a neighborhood, maintaining the community's appearance and taking care of day-to-day upkeep of public spaces and shared amenities. But they can also cause major financial heartache if you're not clear about what you're signing on for. Before purchasing a home in an HOA-managed community, do yourself a favor and be sure to ask the following questions. (Your bank account will thank you later.)