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I think it depends on the HOA. Do your due diligence. When you’re under contract, request meeting minutes, the budget, bylaws, and info on any recent law suits. Read ALL of it and look for anything concerning, particularly any recent or upcoming special assessments and the amount in reserves.
Not all HOAs are bad, especially for a condo unit. I wouldn’t buy a house with an HOA, but when your unit is attached to others, it makes sense. Mine is on the pricier side for my area but it includes water and flood insurance. I had a leaking roof and the HOA 100% handled getting it fixed. They also coordinate regular landscaping, annual window washing, and annual pressure washing.
Also, just did the math. My HOA is 25.8% of PITI.
Enthusiast
As an HOA Board member, these communities are awful. The most thankless bunch of people ever. Moving out soon
Chief
Is it a shared walls situation? What does the HOA include? How often has the fee increased in the past 5 years?
My first place was a condo in an HOA. I got the condo cheap, so the HOA fee was kinda high from a percentage perspective, but it included maintaining the roof, pipes in all common walls, maintaining the elevator, maintaining 2 automatic gates in the parking garage, landscaping, and trash / water. The fee had only gone up once in the previous 5 years (by $10), and in the 8 years I was there, it only went up $15 in total.
It’s nearly impossible to find an HOA in SoCal under $300 / month for condos. Some don’t even have a pool or jacuzzi, just lots of deferred maintenance.
The financial documents of the HOA will tell you a lot about the status of how the HOA is operating.
Townhouses and condos have high HOAs because they are responsible for/take care of so much. I have two properties and both are over $400 each. Pools on the west coast, doormen in the north east, security, landscaping, building maintenance, common spaces, insurance, repairs.
Last year one of my HOAs spent 5k on tree trimming, and that was the lowest of four quotes! Roof replacement every X years, common driveway resealing or repavement, fence maintenance, lighting, electricity and water for the common areas. It’s a LOT.
They have to tell you about the financial health of the HOA. Looking at last year’s report will tell you all about what gets covered and when those big expenses (like roofs) are due for replacing.
They have a highly sought after asset - it’s a preposterous amount of money, but sounds like it’s the cost of buying on the beach unless you want your own house. After a casual peruse of r/fuckhoa, I wouldn’t buy into an HOA with a gun to my head
Chief
Yeah, but bear in mind that that’s basically r/selectionbias, as is most of the internet. You don’t hear about the millions of non-events where an HOA did nothing at all or did something perfectly reasonable.
Hence why I asked below. You probably can’t REALLY know ahead of time, but you can ask a ton of questions to get a sense for whether it’s one of the bad ones.
Compare what they cover to the general cost of living at the beach. Your homeowner’s ins could be really high, depending on where you are, history of storms, etc. If the HOA helps reduce any of the potential OOP burden relating to storms/maintenance (ie, siding, roof, landscaping), maybe factor that into your calculations.
Chief
What does the HOA actually do / include? How easy is it to get involved if you don’t like the direction it’s going? Of the HOA’s costs, who are the contracts with and could you get out of them to switch to a different provider?
Keep Away of HOAs. The worst nightmares comes whenever you want to decide something on “your” property but your neighbors won’t agree. Also it is very difficult to plan the gains and loses you can have in a property like that when you want to put it for rent. I own 4 properties, one of them is in an HOA and it is the most difficult/costly to manage. Just last month my tenant’s water was cut because the PM “forgot” to pay it. Now I am in a middle of the lease and the HOA just decided to increase their Monthly fee and I cannot do anything. That number you are looking at 25% could increase any day just because they want to “have a fancier pool”.
Please show me a condo without an HOA. I’ll show you a building that will never have that leaky roof fixed.
Never buy with a HOA
Chief
Sometimes a condo or townhouse is all that is affordable. I’d argue that a condo or townhouse in a decent part of town is a better choice than a rundown house in a less desirable part of town if they’re priced similarly (and in some cases, the rundown house is still more expensive)