Consider HOA Fees When Purchasing a Home
Purchasing a home requires you to make many decisions. Aside from which home to choose, you’ll have to consider the type of home, location and size as well. If you choose a condo vs. a single-family home, you will have to take HOA (Homeowner Association) fees into account as you plan your budget.
Owning a condo has its advantages and disadvantages. For instance, condos give you the opportunity to enjoy your home without having to worry about mowing the lawn or snow removal, for example. However, these services are not free. HOA fees are the source of funds that are used to pay for these amenities.
What Do HOA Fees Cover?
Each association has different policies. This is why it’s wise to ask the seller for a list of the HOA rules and regulations. If the seller doesn’t have one available, you can ask for the name of the property management company who oversees the community in order to get more details.
In general, these are some of the costs that can be covered by HOA fees:
- City Services- Including services such as trash removal, water and sewage.
- Insurance- This only includes insurance for damage of the outside of the building and the property around it. You still need an individual insurance policy to cover everything inside of the condo.
- Lawn Care- This includes snow removal, gardening and general lawn maintenance.
- Pest Control- Most HOAs schedule a monthly inspection from a pest control company in order to avoid pest infestation.
- Maintenance and Repairs to the Outside of the Building- This includes things such as roof leaks, exterior painting, driveway pavement repairs, etc. It also covers the costs of gym or pool maintenance, if applicable.
If you don’t mind paying HOA fees every month and like the convenience of having some labor-free amenities, purchasing a condo may be the best option for you. However, keep in mind that HOA fees may increase each year as the cost of services go up. For instance, if the value of the property goes up, then the insurance costs could also go up. This means that your HOA monthly fee could increase as a result.
Taking HOA fees into consideration while you’re shopping for a new home is a crucial part of the home-buying process. Sit down with your realtor and weigh out the pros and cons of the home, and don’t forget to factor the HOA fees into the equation. Properly evaluating the true costs of a home can save you headaches down the road.