Condo HOA questions to ask

[Fred Conway]

Hey all, 

long story short, i'm looking to buy my first condo, HOA is $300 a month, the #s make sense but as I've heard, HOA's can make any deal go bad with rules and requests. What questions I should be asking for buying a condo with an HOA. Obviously I need to understand what the HOA covers as far as insurance, cable, water, etc, but what do I need to know about occupation rates and who's on the HOA board, etc?

Thanks

[Andy Mirza]

@Fred Conway I assume that you're buying this condo to hold it as a rental. If so, the first question you need to ask the HOA property management company is if rentals are allowed. If so, are there any restrictions?

Also, check out all of the HOA docs that you get during due diligence to assess the health of the HOA. You want to look at the annual financial statement that the management company sends to all of the owners on the board's behalf. HOA's are required to conduct reserve studies to help them prepare for future expenses such as roofs, exteriors, parking lots, etc. How well funded are the HOA's reserves? 75% or more is really good. If there are hardly any funds set aside, be careful. That's evidence of possible embezzlement by the board or management, lawsuits, poor management, ineffective boards, or other greater underlying problems. Most of these problems can be worked out over time and the HOA can recover. Just be aware of them....