According to Zillow, roughly 20-30% of all home buyers purchase properties within homeowners’ associations. So should you buy into a homeowners association when you purchase a home?

Let’s review the facts to help you decide whether or not owning a property in an HOA community is worth the price.

What is a homeowners association?

An HOA is an organization in a residential community that creates and enforces rules for all properties in the development. HOAs can be associated with condominiums, townhouses or could be a single-family home community or private neighborhood. HOAs are very common among Irvine homes for sale and other communities in South Orange County. HOA rules can govern everything from parking restrictions and storage usage to architectural and design guidelines.

HOA fees on average range from $200 – $400 a month.

What do HOA dues pay for?

The homeowners association collects monthly or annual dues that pay for community areas and amenities like parks, sports courts, swimming pools, and street signs. Keep in mind that every homeowner’s association is different. Some are voluntary but most are mandatory and some are picky about what the members do with their properties while others are more laid back.

Pros and Cons of HOAs

Pros:

The homeowners association pays for common areas like swimming pools, sport courts, parks, and clubhouses. That means you get to enjoy a pool without having to clean it and keep an eye on chlorine levels and enjoy a semi-private playground or garden without the hassle of maintenance.
Some HOAs offer services like lawn maintenance to keep the neighborhood looking good 24/7. You don’t have to hire someone yourself and your home always looks pristine.
Homes within HOA communities typically maintain their value well or appreciate over time. By regulating the appearance of things your curb appeal and home price rise.
Often HOAs promote a strong sense of community. Friends can gather at the clubhouse or common areas, people get to know their neighbors, etc.
Issues with neighbors like unwanted cars parked in front of your house are handled by the association, taking the pressure (and responsibility) off of you.

Cons:

The price of your perfectly manicured lawns could be losing the freedom to choose your holiday decorations or the color of your house.
Homeowners may encounter restrictions if they want to rent out their property. The association may require potential rents to be screened and approved by the HOA board, how much you charge for rent could be regulated, etc.
The extra expense of monthly dues may more than some homeowners can afford.
Some HOAs are poorly managed by board members who don’t have enough time to devote to the community. Others too might be managed by a third party company which can feel like giving up control of your neighborhood.

Do your homework before you buy

It is important to factor in HOA dues into your monthly mortgage costs if you decide to buy a home within one of these communities. For example, you could buy a single-family home in Garden Grove for $550,000 or a condo in Irvine for the same price however you would be spending significantly more every month for the condo in Irvine because of the added HOA dues every month. And most importantly get a copy of the rules, regulations and guidelines before you sign a purchase agreement on a home within an HOA community. Find out what the association is like, if you can live with the rules and whether or not the home is worth the price considering dues.

If you would like to learn about HOAs in a specific area of Southern California then reach out to a First Team Agent in any one of our offices.