50% Rule and Condo HOA

[Bill Schrimpf]

50% Rule and Condo HOA

The 50% rule looks like it's a rule of thumb for properties where the owner would be responsible for a long list of capital and operating expenses items such as roofs, HVAC, landscaping etc. Does it make sense to use a different percentage for a condo where the HOA takes care of many of these items?

Maybe 25%-30%, since it’s still prudent to budget for interior repairs and vacancies…

Thanks in advance for your thoughts!

[Jean Bolger]

well, I would include the HOA fee as part of the 50%- then I'd add anything else it didn't cover- insurance, management, repairs, utilities. The elephant in the room though is whether those HOA fees will remain stable, or if you're going to get hit with a large assessment for new roofs/carports/paving/etc when those tasks need to get done. This means understanding the financial health and the level of reserves of the HOA you're joining.