Welcome to iHeart Realty. Hi you guys! Today we will be talking about HOA’s. For those of you who do not know what that means, Jenelle, can you give us a little definition?
HOA stands for homeowners association
This is an organization that belongs to many communities that when you’re a part of it, you have to pay dues. And we’re going to talk a little bit about the pros and cons, because a lot of those dues cover some of the things we’re going to talk about today.
Sometimes when you get involved with purchasing a home it’s an HOA, where you have to pay fees. They can be minimal, or they can be outrageous. We’ve seen those. But let’s get into the pros and cons about that. Sounds good.
Pro 1: Community Beautification
So the first pro would be beautification of the community, consistency within the homes. I think I love that part of HOA. It’s very nice. When you drive in, you think wow this is a great neighborhood, because the HOA is up-keeping the neighborhood.
Pro 2: Neighborhood Standards
The second pro is enforcing the neighborhood standards. So this includes the paint color of your home, when you need a new roof, getting that approved and making sure the roof is consistent to the colors that the community has already approved. This even has to do with enforcing pressure cleaning, making sure that there are no commercial vehicles on the property or parked in the garage or parked outside, and sometimes even boats. So sometimes boats aren’t allowed in communities.
And again, it’s also that it can give the aesthetic consistency across the board with all the homes.
Pro 3: Community Events
Pro number three would be community events. Now, not all communities do this, but some do, which is great. It brings the neighbors together. You get to know one another. Sometimes for the holidays, they’ll have parties, they’ll have potlucks, things like that, just really to get to know your neighbors, which is great. I think sometimes we lose that effect of community feeling. But these associations, I think they like to draw that back through events.
Con 1: Foreclosure
So now look for the three cons. The first con is that this lovely HOA can foreclose on your home, especially if you’re delinquent on your HOA payments and they can put liens on your property. So if you’re not obeying the rules that they have set before you, they can make sure that they enforce it through fines and additional limitations.
Con 2: HOA Fees Fluctuations
Con number two would be increase of your fees. Sometimes you’ll see a small jump or maybe you’ll see a big jump. It’s all depending on your HOA .
With the fees, you do have special assessments sometimes. So, for instance, if they did a budget for a certain thing, like a repair of a pool or new roads, light posts, whatever it may be, and they didn’t fund for those, they’ll add on a special assessment where you have to pay an extra fee and it could be monthly, quarterly annually, and just depends on the HOA. Make sure you read through your covenants, which is usually that big PDF form that you get either by physical copy or online.
Make sure you guys are getting that and reading through it because there is a limited amount of percentage that they can increase year after year. Sometimes they don’t increase at all and sometimes they do increase it significantly. Yeah.
And so before buying a home, you’ll know the HOA can tell you if there will be future special assessments coming out. So just something that to take into consideration.
Con 3: Rules
Now, the third con is the rules. So while there may be good positives that go with the rules that they have, there’s a lot of other limitations that can happen. So if you’re looking to rent out your home, there may be limitations where they may say, nope, we’re already at capacity or how many renters are already in this community, which is a good thing. You don’t want a community full of renters.
But at the same time, if you were looking to turn it into an investment property, that’s a con for you at this point. The other thing is, I love going and looking at the holiday lights. We even did a blog post on that where you can check it out on our website. But they limit sometimes how much Christmas decor, Christmas cheer you put on your house to make sure that it follows their guidelines. So there’s a lot of different things.
If you’re upgrading or updating your house, not only are you pulling city permits, you have to make sure that HOA approves the upgrades that you’re doing because you may get the city to approve it, but if you HOA doesn’t, you have to take it out. Like an example of that would be the type of fence maybe you want to wood fence, but they only allow white fencing. Or the size of a pool, maybe you want a huge pool and they say no because you have to keep it to a certain size; and the pool coverings and the screen enclosures. There’s a lot of different things that that can definitely deter you as far as upgrades on in nature because of the rules.
Did you know that there are over two million HOA’s in the state of Florida, not including condo associations? That’s a lot. And it’s only growing. Yeah, there was 1.7 million last year. Wow.
So so you’re bound to end up in one, and you should know the pros and cons. So we hope you enjoyed this segment of iHeart Realty.