Buying a Home in an HOA Is Becoming More Common. Is It Right for You?

Homebuyers often have mixed feelings about homeowner associations (HOAs)…

On one hand, they can add value to your investment by maintaining neighborhood standards and offering amenities like pools or parks.

On the other hand, they come with monthly fees (which can be steep) and rules and regulations that can make buyers feel stifled.

So if you’re in the market to buy a home, it’s understandable if you’re wondering if the benefits truly outweigh the costs, or if life in an HOA might feel a little too… controlled.

However, whether you’re for them or against them, there’s an increasing chance you might fall in love with the perfect house, and it happens to be a part of an HOA.

It’s Getting Harder to Avoid HOAs

According to a recent CNBC article, the number of HOAs has skyrocketed in recent decades. In 1970, there were only about 10,000 community associations with about 2.1 million residents nationwide. Today, HOAs are now managing about 30% of all U.S. housing stock, representing 75.5 million residents.

Between 2009 and 2023, the percentage of homes built within an HOA went from 49% to 65% of single-family homes.

With so many homes being built within HOA communities, avoiding them is becoming increasingly difficult. Even more so if you’re in certain areas like Florida, which tops the charts with more than 4 million homes in HOAs housing 66.86% of the population!

While some buyers may prefer the freedom of non-HOA neighborhoods, there are certainly buyers who are drawn to the amenities, uniformity, and community aspects these associations provide.

So if you’re in the market for a home, you should probably give some thought to your feelings about them.

Weighing the Pros and Cons of HOAs

If you’re not entirely thrilled with the idea of living in an HOA, you’re not alone!

According to a recent study by Frontdoor, 70% of homeowners said they would prefer not to live in a home that is part of an HOA, and 63% said they wouldn’t even recommend buying a home in one.

That said, around 60% of the respondents said they were satisfied with their HOA.

Obviously there are some strong opinions for and against HOAs, but your opinion is the only one that truly matters when buying a home, so let’s take a look at some of the pros and cons to help you figure out which way you lean:

Pros

• They may provide amenities you couldn’t afford. Many HOAs provide shared amenities like swimming pools, gyms, playgrounds, and clubhouses, which may not be available in other homes in your price range.
• They can be great if you’re not handy, or just don’t like doing chores. HOA fees often include exterior maintenance of your home, along with the landscaping around your home or unit, as well as the common areas. This can be extremely appealing to people who aren’t able to (or just into) the typical outkeep a house often requires.
• They make sure you aren’t affected by neighbors who don’t upkeep their home. Uniform guidelines for exterior maintenance help HOA neighborhoods maintain a polished look, which can maintain (and even increase) your property value.
• They can also improve your home’s saleability. Selling a home next door to a neighbor who just doesn’t maintain their home can often turn off potential buyers. But with all of your neighbors being held to high standards, you won’t have to worry about that.

Cons

• The monthly and yearly fees can be pretty steep. Fees will vary from one HOA to another, and even from one home or unit to another within an HOA, but they can range from low to extremely high. Depending on the area and development you’re in, you might pay as low as $100 a year to more than $1,000 a month. (For example, it’s an average of $971 per month in the NY/NJ metro area!)
• And the costs usually go up, not down… Not only do the monthly fees tend to increase over time, and rarely go down, but it can also happen frequently.
• There might be some rules you don’t want to follow. HOAs often enforce rules about exterior appearances, landscaping, and even the types of vehicles allowed on properties. So if you have visions of painting your house lime green, hanging the flag of your college alma mater on your porch, and parking a work van with your logo in your driveway, an HOA might not be a great fit for you.
• If you don’t follow the rules, be prepared for it to cost you even more money. 1 in 6 of those surveyed said they’d been fined for breaking HOA rules, and those who had said they were fined an average of two times. The most common violations cited were yard maintenance (42%), and for the number or types of vehicles they had on their property (15%).
• You might end up paying for amenities you don’t need or use. If you’re not interested in pools or tennis courts, paying for them might feel like a waste.

Tips for Buying in an HOA Community

After considering all of the pros and cons, here are some tips to ensure you’re ready for life in a managed community if you find yourself open to buying a home in an HOA:

• Read all of their rules and regulations before buying. Request a copy of the HOA’s covenants, conditions, and restrictions (CC&Rs) and review them carefully before signing a contract to purchase a home within the community. Make sure you can live with all of them, because they’re not suggestions, and you can’t bend or change the existing rules.
• Follow the rules! Once you’ve purchased, adhering to the HOA’s guidelines will save you headaches and fines.
• Stay informed. Keep abreast of any proposed changes in rules or fees by reading all communications they send, and the board’s meeting minutes.
• Attend board meetings. Reading the minutes is great, but being present for the actual meetings is even better. Being involved helps you stay informed and gives you a say in community decisions.
• Join the board. If possible, serving on the HOA board lets you directly influence policies and advocate for your interests.

As you can see, homeowner associations aren’t entirely good or bad; they simply cater to specific needs and preferences. By understanding the pros and cons and evaluating your priorities, you can make an informed decision. And if you’re still unsure, your real estate agent can be a valuable resource to help you figure out if HOA living is right for you.

The Takeaway:

Whether buying a home within an HOA is right for you depends on your personal preferences and lifestyle. If you value amenities, uniform aesthetics, and community engagement, HOAs could be a great fit. But, if you prefer the freedom to live your own way— and want to avoid additional fees or restrictions—they may not align with your priorities.