Is Joining a Homeowners Association the Right Move for You?
What should you know when buying a condo or townhome with a Homeowners Association (or HOA)? There are a few factors to keep in mind.
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What should you know when buying a condo or townhome with a Homeowners Association (or HOA)?
The No. 1 thing to consider is the HOA’s finances. How are their financial reserves? Also think about whether there are any big projects coming up. You want to make sure you aren’t going to be surprised by any hidden or extra costs.
There is no real rule of thumb, but it’s a good sign if an HOA’s financial reserves are about two times the operating expenses. An HOA that is very low in reserves or lacks allocated funds for future projects is a big red flag for you as a buyer.
There is no real rule of thumb, but it’s a good sign if an HOA’s financial reserves are about two times the operating expense.
Another thing to think about is what will be covered by your HOA fee. Some associations cover heat, gas, electric, while some cover only water and insurance. The most important thing is that the benefits you’re receiving will make sense for you.
Lastly, you want to have a good idea of the HOA’s rules and regulations. An example of this would be whether or not the association has a rental cap.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.