The Pros and Cons of Buying Into a Homeowners’ Association (HOA)

Is living in a homeowner’s association (HOA) a nightmare or a benefit to homeowners? You’re bound to find some seriously mixed opinions on the topic, depending on whom you ask. For those who are thinking of buying into a community that features an HOA, or those who already live in one, the opinions can be quite varied. 

The Pros

Fewer bad neighbors. Generally, HOAs have rules and restrictions and covenants that prohibit people from doing wild and crazy things. In this way, HOAs can protect homeowners from living next door to people who engage in messy, annoying, loud, unsightly, or unsafe behavior. In general, the structures of HOAs prohibit these annoying or unsafe activities and mandate that homeowners maintain standards of care for their properties, including landscaping. 

Stable Property Values. In HOAs, property values are generally more stable than in neighborhoods without HOAs, since the associations generally mandate – and have funds – to ensure that properties and amenities are properly maintained. This is an important criterion for those making increasingly large investments in property. 

Financial stability. HOAs generally have formal governance, such as a board of directors. This governance ensures that the community is properly funded and budgeted for the long term. Many HOAs contract with an outside property management firm that specializes in HOA administration. 

The Cons

Association dues. Let’s face it, Homeowners’ Association dues have always been expensive, and in recent years, they have escalated, in part because of the rising costs of master insurance policies (which are important for HOA amenities such as pools, or premiums in areas at high risk for storms). Unfortunately, many homeowners today are finding that the escalating costs of HOA dues are pricing them out of their homes.

Bad HOA management companies. Some HOAs have gotten burned in their choice of HOA management companies and can tell horror stories about everything from incompetence to embezzlement. A bad management company can make your life hell and dramatically decrease your property value. For this reason, HOAs must be careful in their choice of management company and needs to look for an organization with a solid reputation and extensive experience.

Whether an HOA is right for you may depend on what kind of property owner you are. If you’re a “free spirit” who does not enjoy the idea of conceding some control to an outside agency, the option of an HOA may not be for you. If you value your property maintenance, order, and regulations in your living circumstances, as well as a communal environment that allows for socializing and community-building, then an HOA is a good way to achieve your goals. 

Consult with a Professional Management Company

Professional property management companies can help minimize the “cons” and maximize the “pros,” as they generally have deep experience in all aspects of property management. At Castle Creek Management, we offer management of day-to-day operations for HOA client associations, including maintenance requests, communication, collection of common charges, payment of vendors, bookkeeping, rule enforcement, as well as any other routine administrative responsibilities. We also offer consulting services to HOAs that are largely self-managed. Get in touch today to learn more!