HOA's are they good or a bad idea?

Question

I'm looking for your comments about weather to buy into a community (12 houses or 30 homes) that are part of a HOA community. In talking to several property owners there appears to be a lot of bickering about many details from parking on the street, allowing new owners to plant trees to improve property value etc. Each year there is an increase in HOA dues to cover annual expenses proposed by the board of directors.

Does anyone have experience or succesful argements to dismantle a HOA?

Thanks for your time and suggestions.

Does anyone have experience or succesful argements to dismantle a HOA?

Thanks for your time and suggestions.

Chris K. · Answer

I own in an HOA community and dont think I'll ever buy another property with one again. Things can get way too political and you're dealing with humans and power and people in positions of power often use it in ways that benefit them. It's like volunteering to live under more government rule.

Teresa Burkhart · Answer

I am currently an HOA manager for a property management company.  I have been doing this since about 2009, both single family and condos.  I personally would shy away from them as a landlord.

If you own in an HOA community and live there you are fine, it is a great way to keep your property values up with allthe rules etc.  However, if you are a landlord the homeowners will give your tenants grief in most cases.  I have literally seen them run tenants out.

Don't get me wrong, not all HOA's are bad, but if your are going to be involved in one I would look at one that was very "loose" on their rules, have very few or do not have a lot of rules about parking especially (this is the biggest issue I have seen) in single family HOA's.  Also, be sure and look at their financials and make sure they are strong and have a good reserve.  Look at historical assessments both monthly and special.

Hope this was helpful, Happy Investing!!

David Dachtera · Answer

Like any unit o government, HOAs can be good or bad depending on the people voted in. Unfortunately, they tend to be peopled with those who view themselves as empowered by such position to impose their will and judgement upon the community rather than to serve as an arm of the surrounding municipality, be that a city, village, town or county.

On the other hand, if not for the HOA, property taxes might be higher since the HOA takes care of the common areas which would otherwise by handled by a taxing body.

In subdivisions of SFRs and/or townhomes, they are not required, really. I have an HOA here in my SFR and also once owned a townhome with no HOA.

In any community of condos, however, it's almost a necessity since there's no "building owner" like you would have with apartment buildings.

Mindy Jensen · Answer

@Chris K. said it so eloquently. "It's like volunteering to live under more government rule."

I, too lived in one HOA community. I sold very quickly, and will never live in another one again.

I like to be able to choose my own plants for my yard and park in front of my house if necessary. I want to paint it the color scheme of my own choosing. I very much enjoy not receiving a letter when there is a weed in the side yard. I lived in a very restrictive HOA.

Like @Russell Brazil said, if this is a small HOA and people are bickering about little things, this isn't a place you want to buy into.

Russell Brazil · Answer

If the HOA is this small, and everyone is bickering about small things, Id probably avoid it.

Account Closed · Answer

I don't think you can easily dismantle an HOA without owning the entire complex.  Too much is shared between units.

I like the hands-off that HOA gives me.  Yard, roof, siding... these are things I don't want to worry about.  Insurance is less.  Community rules make it easier for me to enforce them.

Bickering about rules is real.  Someone will sit and stew about a rules violation that is relatively minor and finally make a big deal about it.  You get in trouble for what your tenant is doing so it's a 4-way mess sometimes between you, tenant, HOA, and the complaining neighbor.  Shared parking is a problem... someone will park a big truck and trailer in the way and take up 4 spaces.

Dues regularly increase for sure.  The management company has no incentive to keep them low and neither does the board.

I've liked it overall for low-cost condos in not-so-great areas.  The HOA factor keeps things from degrading too much.  Might be different in a better neighborhood.

Michael Lee · Answer

Hello and welcome!  The only thing about HOA is that you have to risk that there is an HOA.  Make sure you do some research and know what may happen to you in the future.  I am 59 years old and I found BP about 3 months ago and I am still learning.  I graduated from college and got a broker license in 1980.  I have been in the construction business since I was 17.  If you think I can be any help to you please do not hesitate to contact me any time.  Good luck!

David Faulkner · Answer

HOAs are a good idea if you setup, control, and profit from them. For everybody else, they are a bad idea. Similarly, investing in condos is a good idea, if you own the entire condo complex, the HOA, and all (or at least a majority) of units in it ... otherwise, not so much. Most people fall into the "bad idea" camp.

Jeff B. · Answer

Considerations:

• added fees
• added restrictions

Where's the upside for the owner desiring to rent (it can be restricted and if not now, later)?

Michael Boyer · Answer

Tony, Cole outlines some pros and cons... personally, if you have tested the politics (which I have seen run from relative peace and cooperation to outright bickering, even lawsuits, etc.) and it looks like it may be a long term stressor and source of friction, you might look elsewhere if the issues look too deep seated (remember, some of the problematic people may not be moving any time soon)..There is probably going to some level of differences of opinion (it is like a mini-democracy). See if you think you can work with the politics or would rather avoid it...Think twice before making a major investment of time and money... There are other fish in the sea (other sf not in hoas or even more tranquil associations)

HOA's are they good or a bad idea?

Most Popular Reply