The Pros and Cons of Buying Into an HOA, Explained

After learning all the ins and outs of buying my first home (think: completing various home inspections and finding the best possible mortgage), there was still one thing left to contend with — our neighborhood homeowners association (HOA). If you’re also a first-time homebuyer and don’t know much about HOAs, chances are you’ve heard some very polarizing things. Mainly: They’re either really great or really terrible.
Like most things, the truth about HOAs lies somewhere in between and varies a lot based on where you live and who your neighbors are. This is why I’ve decided to compile this list of the top pros and cons of being in an HOA — from someone who’s spent the last year living in one. Here’s everything you need to know about buying into an HOA, plus some helpful tips to decide if HOA-living is right for you.

What is an HOA?

Let’s start by diving into a more complete definition of what an HOA is. A homeowner’s association (HOA) is a private association usually found in subdivisions, planned communities, or condominiums. Oftentimes HOAs are formed by real estate companies even before all the residents live there, using the name of the HOA as a way to market new properties or homes for sale. The primary function of an HOA is to regulate and enforce the rules of that housing community. To do this, they often have an HOA board made up of resident members, and even employ a management company to help with extra logistics like landscaping or snow removal.
These community associations typically regulate everything from neighborhood speed limits to the look of a home’s exteriors, water usage, and even trash pickup. HOAs also control any activities they don’t want in their community — like anything loud or perceived as dangerous (hunting and riding ATVs are two things my HOA doesn’t allow, for example). Because many HOAs come with at least a few perks for residents, they can be quite expensive with quarterly or monthly dues that every community member is required to pay.
The most important thing to remember about HOAs is that once you buy a home inside their jurisdiction, you automatically become a member — there’s no opting out. So whether you like all the HOA rules or not, you’re essentially agreeing to all of them no matter what. This is why you’ll want to make sure that you really love the home you’re buying, and that you’ve reviewed all the HOA documentation before closing on the home. Your real estate agent should provide you with details about the rules of the HOA as well as the annual cost of fees to help inform your decision.

Pros & Cons of HOAs

Now that you know a bit more about what an HOA is, let’s dive into some of the biggest pros and cons. These are all things I’ve noticed in my past year of living in an HOA, and all worth considering before you pull the trigger on buying into an HOA.

Pro #1: Protected neighborhood

Many HOAs offer some sort of established security system that’s shared among residents. Whether that’s a set of locked gates at the entrance, a series of security cameras (or even some hybrid of the two), a lot of these communities go above and beyond to keep their residents and properties feeling safe.
This can be great if you live in an isolated area, or even if you’re in the middle of a city. And while it might be a pain to always have to enter through a coded gate or check-in visitors, it can also be nice to walk around your neighborhood knowing that everyone inside is spoken for. This is also a great perk if you plan on having kids, or already have them. Since many of HOAs will already have some sort of security system established, you likely won’t ever have to set up anything yourself (unless you want to) and maintenance of the system will be included in your regular fees.

Pro #2: Shared values

Much like privatized security features, reaping the benefits of shared values can be another great feature of these communities. Many HOAs limit the kinds of activities happening in their communities, which can make it a whole lot easier to ensure you’re buying into the type of neighborhood you want to live in. For example, my HOA doesn’t allow hunting in the woods behind the houses, or ATVs on its trails. Because these aren’t activities I’m interested in, it helps maintain the kind of space I like — mainly a quiet, safe, and natural one.
By all agreeing to abide by certain rules, HOAs can make for really harmonious living conditions among neighbors, or at least set some hard boundaries on the big things. The key here is to just be sure you aren’t buying into an HOA that prevents you from doing the things you want to do.
A few other examples of the types of things HOAs can limit include the upkeep, home improvement projects, exterior paint colors or lawn care, and even rental conditions on your property. Some HOAs like to ensure the overall well-kept look of houses and put restrictions on what can and can’t be done to the outside, while others may even restrict your ability to rent out your property and for how long. Although these rules sound strict, they also keep the neighborhood looking nice and prevent extra traffic from short-term renters.
If earning a passive income on Airbnb is part of your big plan, then buying into an HOA with no short-term rentals wouldn’t exactly be a good idea. Again, you’ll want to be sure to familiarize yourself with HOA documents before finalizing your purchase. That way, you can be sure you’re entering into an agreement that fits your lifestyle.

Pro #3: Fun perks

In addition to all the rules and regulations, many HOAs also offer several fun perks to their residents. This might include things like a fitness center, tennis court, swimming pool, or even recreational common area, a clubhouse, or groomed trails. These perks might even increase property values, and ensure that you’re able to get a good deal on your home if and when you decide to sell down the road. Depending on what your interests are, these perks might also be the things that justify paying those extra HOA dues each month.
For example, if you live somewhere really hot, having a pool for your friends and family to enjoy all together could be a great extra. Similarly, having access to maintained trails for walking your dog or taking a morning jog might just make all the difference in the world. Since some of these things would be incredibly expensive to own and maintain on your own (like an enormous in-ground pool), having one shared between an HOA community can be a much more affordable way to offset costs. Another nice aspect of sharing rather than owning these things is that you won’t be directly responsible for maintenance. That being said, it’s always good to ask about future building plans in any HOA, since those costs might end up directly affecting how much you pay in monthly fees.

Con #1: Shared resources

While there are plenty of pros to be had from buying into an HOA, there are also a number of cons to consider — and shared resources are one of them. Shared resources can include anything from those common spaces we mentioned (like a pool or tennis court) to a well for drinking water, or even roads and trails. Because these things are shared, how they get used is also likely to be heavily regulated.
This means you might not be able to do things exactly as you’d like to, or that you’ll need to adjust your habits based on what the HOA wants. For example, sharing a well might mean conserving your water usage, while sharing a trash receptacle (also very common) might limit what you throw away and how much you fill up the barrel. There might also be additional rules about how trails or recreational areas get used, and what’s okay versus what isn’t. Keep in mind that all HOAs are different, and how they’re run will largely depend on the people running them. That being said, it’s great to get an idea of who your neighbors are (as much as possible) before buying into an HOA. This brings me to my next point.

Con #2: Forced relationships

If you’re one of those shut-in recluse types, HOA living might not be your cup of tea. Since these community associations often hold HOA meetings to address issues as a group — you will almost certainly end up having some kind of relationship with your neighbors. In other words, you’ll need to at least co-exist with these people if not get along with them.
Some people (myself included) get lucky with having great neighbors, which makes all of that compromising and cohabitating feel easy. But if you dislike your neighbors (or even the idea of having to ever talk to neighbors) then the forced closeness of an HOA might not be for you. Again, every HOA is different. The key is to look at what resources you’ll be sharing and decide if you want to share those things at all, and if these are the people you want to share them with. If the answer to either of those questions is no, consider finding a home in a different community, or even one that doesn’t belong to an HOA.

Con #3: Expensive

Last but certainly not least, there’s something to be said about the cost involved in HOA-living. Because here’s the rub: It’s not cheap. By some calculations, HOA fees can run anywhere from $100 to $700 per month, with the average falling right around $200 per month. This amounts to roughly $2,400 per year, which is nothing to scoff at. And unlike property taxes and other fees associated with homeownership, HOA fees generally aren’t tax-deductible.
Again, the trick here is to determine what you’re getting for the cost of your HOA. Maybe you have a safer neighborhood for your kids to play outside, or maybe your HOA fees are including the plowing and management of roads. If you can run the numbers and assign some value to this monthly fee, it might not seem so bad. But regardless of what you do or don’t get, the fees are significant enough to make you rethink HOA living at all, and a definite con on this list.

Costs & Fees of Buying into an HOA

Like we said, buying into an HOA is an added expense when it comes to buying a home. To give you the full picture of what buying into an HOA might cost, we ran some numbers using average HOA fees. Here’s the breakdown of what to expect with low, average, and high monthly fees.
HOA Fee TypeAnnual Cost
Low - $100/month$1,200
Average - $200/month$2,400
High - $700/month$8,400
Keep in mind that HOA fees are always subject to change. While many HOAs try to keep a reserve fund for special projects, they sometimes go over budget and need to increase monthly dues to make up the difference. Your HOA might also issue something called a special assessment, which is an additional fee to help cover the cost of an ongoing or upcoming project. Just like the monthly dues, you won’t have the option to get out of paying these fees. In extreme cases of HOA members getting far behind in monthly dues or special assessment fees, your HOA might be able to issue a foreclosure on your house — even if you’re current on mortgage payments. Since your home and property are in some ways owned by the HOA, falling behind on fees is a big deal and something you want to avoid.
One way to mitigate the costs of your HOA is simply to be involved in the decision-making. This means attending HOA meetings and casting your vote on various projects or improvements the association wants to make. It might also mean becoming a member of the HOA board to have even more sway in how the HOA is spending saving money.
Another way to get ahead of these costs is by doing your research before you buy the home. Ask about what plans the HOA may have, how steady monthly dues have been (and for how long), and if there are any expensive projects in the pipelines. Your real estate agent should be able to provide the paperwork and insight to help you determine if these community goals are in line with your personal finance goals, or if you’d be better off somewhere else.

The bottom line

Buying into an HOA certainly isn’t for everyone, and should be a big part of your decision-making when it comes to buying a home. Regardless of how much you like a home, buying into an HOA is a package deal that comes with more rules and community involvement than other neighborhoods might.
Before signing off any HOA-home, be sure to do some research and decide if that particular HOA is a good fit for your lifestyle or not. While many HOAs can be great places to live, they’ll only feel that way if they’re a good fit for you.

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