Buying a home is already a significant expense, so moving into a neighborhood with low HOA fees is better. Right?
Well, not exactly. There are many cases where cheaper isn't better, and this is one of them. When there aren't enough fees to maintain common areas, it could lead to major infrastructure repairs, which cost more.
Property values could also dip, alienating potential buyers. Low fees could also mean difficulties in meeting minimum standards within an HOA. Since the state regulates these, it could result in higher costs for homeowners down the line.
So, What Exactly Do HOA Fees Cover?
Besides maintenance costs, HOA fees are used to provide community services. These include trash removal, security upkeep, water and wastewater management, etc.
HOA fees also cover association insurance and special assessment fees. The former is necessary for injuries or damage incurred in shared spaces and recreational areas managed by the HOA. However, if you're renting your property to a tenant, you will still need a separate insurance policy to help protect your investment.
As for special assessments, the funds for these should come from a reserve account. Think of it like an emergency fund for HOAs. These are for nonroutine maintenance or other unexpected expenses.
Variations in Monthly Dues
If you've previously lived in New York or San Francisco, you may notice that HOA fees are slightly higher than in Texas. Generally, the higher the cost of living, the higher fees a homeowners' association could charge.
Other factors that affect the cost of HOA fees include the type of amenities offered, for example, pools, gyms, and tennis courts; the age and size of the community; and the size of the reserve fund.
Older communities usually put in more requests for maintenance and repairs. The same applies to larger communities. All these lead to higher HOA fees, so try to crunch the numbers on top of your regular mortgage payment before deciding on a neighborhood to move into.
Some Tips for Lowering HOA Fees
There's only so much homeowners can do to minimize HOA fees. Of course, you can always move to a community with fewer amenities. You can also try negotiating with the board if you're having trouble paying your dues.
However, the best strategy is still to choose a well-managed community. An HOA that works with the right property management company understands how to keep fees reasonable. They can advise HOAs to refrain from increasing payments that violate state and federal regulations for compliance purposes.
Well-managed HOAs will also hold regular meetings to update homeowners on the budget. Homeowners can speak about their concerns, especially if they notice unnecessary expenses. They can also make suggestions regarding certain services and if they feel the HOA might be overpaying for these.
Don't Let Fees Stop You From Moving Into a Good Neighborhood
If you do your research and set your budget right, you don't have to worry about HOA fees. Remember that well-managed communities don't charge unreasonable monthly dues for maintenance and repairs.
For HOAs in Killeen, Texas, needing assistance with association management services, PMI Phantom Realty can help. From board member assistance to accounting and reporting and more, we have customized solutions for your diverse needs. To learn more, feel free to browse our site.
