HOA Fees and Investment Properties (Buy and Hold)

[Lance Smith]

Outside of the basic calculations for monthly cash flow how much consideration is being given to monthly HOA fees? In my area they typically average $200 to $300 and they do not seem to be proportional to the value of the property. For instance, a $130,000 townhouse will have a $225 HOA fee and a $250,000 townhouse will have the same. A large percentage of the monthly rental income, sometimes greater than 20%, is being consumed by the fees and it greatly effects cash flow. I understand the money is made upon purchase but are the HOA fees worth it? Would it be better to seek out SFR's and assume a larger mortgage in search of higher cash flow? What has been your experience?

Thanks,

Lance