Pros / cons to buying a condo with HOA

[Dom Jones]

I've been looking into condos a lot I like that fact that they do the up keep on the outside of the condo. But I don't have any Experience in condo rentals! I'm look for long-term rentals and appreciation over the years. What do you guys think?

[Joe J.]

@Dom Jones

Disclosure: I lived in a townhouse style condo unit with an HOA for 11 years.  

I personally had a bad experience resulting from poor decision making by the board. In my opinion it is a flawed system. The members (unit owners) of the association "elect" representation in the form of the HOA board. These board-members are not paid and often times do not have the skillset needed to manage the association. You become dependent on them to make the "best decisions" but often times they are incapable of doing so or are not incentivized to do so.

Here is a small list of pros and cons I can think of from a rental perspective

Pros:

1) Typically cheaper price point

2) HOA takes care of certain items (ie. Fire insurance for exterior, landscaping, common areas maintenance)

Cons:

1) Bad management by board members

2) Politics

3) Special assessments and increase of dues resulting from #1

4) Limitations due to governing documents (CC&Rs).  Many times there is a limit of % of units that can be rentals.