Are you in the process of looking for a single-family home to purchase? If so, you may have seen homes overseen by homeowner's associations. These real estate communities are quite different from what you may be used to with home ownership, and they come with several advantages and disadvantages you should know about.
There Is A Monthly Financial Commitment
It is very common for a homeowner's association to have fees that must be paid simply for living within the community. These are fees that will not go away when your mortgage is paid off, so you should factor them in your monthly budget along with the mortgage, insurance, and taxes.
HOA fees help pay for shared community expenses. For instance, you may have a public area where people can gather outside. This space needs to be maintained over the years, which the fees will help pay for. HOA fees also cover beautifying the area, cutting grass on community property, and even giving a small stipend to the people that run the HOA.
There Can Be Restrictions
Make sure to read the community rules before you buy in an HOA. You may be surprised at the restrictions that have been put in place to maintain the community's high real estate values.
For instance, you might be limited to a certain type of fence that can be installed around your yard, how long the grass can get before you are required to cut it, what colors you are allowed to paint the exterior of your home, or what type of roofing material you can use if you need roof replacement.
These rules help the community look unified and nice, with fines being the possible consequence for not following the rules you agreed to.
There Are Benefits Of Living In An HOA
Every HOA is different, but there are benefits that can come with living in a shared community.
One benefit that may be offered to you is the option to get in on a group insurance policy. Having the entire community use one insurance provider can help get you a lower rate since the HOA has a lot of bargaining power with the insurance provider. You may also make up all those HOA fees when it comes time to sell due to a higher property value due to the community.
Speak to your agent for more information about purchasing a home in a real estate community