Tag: condominiums

Mortgage News Matters

What are the Pros and Cons of HOA?

What is an HOA?

A HOA, or Homeowner Association, is an organization that oversees or manages a private community or subdivision. Run by a board of directors, made up of its community members, a HOA enforces rules and guidelines to be followed within the community, as well as provides upkeep and maintenance of facilities.

Where can you find a HOA?

A Homeowner Association is typically found within communities of single-family homes or multiple unit buildings, like condominiums.

Run by an elected group of individuals within the community, membership is usually mandatory for anyone who chooses to buy a home with an established HOA.

What are the Pros of HOA?

  1. Structure through a set of community rules and regulations. A HOA provides a set of rules and regulations that all community members must follow. This offers a sense of structure and stability for all members and protects and enhances the community’s property values.

    Many of the guidelines are aimed at preserving the home’s exterior, and are focused on the cleanliness of the property, the property’s condition, and any repairs or upkeep that need to be done. Typically, HOA guidelines are aimed at maintaining a uniform appearance for all properties within the community.

  2. Provides access to exclusive services, amenities, and facilities. Like many communities made up of single-family homes or multiple unit buildings, HOA communities offer access to exclusive services, amenities, and facilities.

    These amenities often include landscaping, parking lots, swimming pools, common areas, workout facilities, tennis courts, and party spaces. Some HOA will also cover the cost for snow removal and trash collection for its residents. In addition to offering such services, the fees that community members pay to their HOA covers the costs to maintain each area.

  3. Mediates problems between neighbors. If there is a disagreement or problem between neighbors living in communities with HOA, they can often look to the board to help resolve such issues. This can be anything from a neighbor who is violating a specific rule or regulation, or an issue with a service or amenity on the property.

    Acting as a mediator between community members, a HOA can ease tension and provide a more peaceful, regulated environment.

  4. Opportunity for self-governance of community. Many individuals who live in a community governed by a HOA enjoy the freedom of being a part of a democracy, made up of individuals who live within the community.

    By following rules and regulations set by fellow community members, rather than an outside landlord who may not live on the premises, offers a sense of self-governance and equality.

What are the Cons of HOA?

  1. Often include fees, dues, and assessments. With access to exclusive services and amenities, like workout spaces, swimming pools, and common areas, comes HOA fees that pay for maintenance of each. These monthly fees also go towards upkeep to the exterior of the homes within the community and can be as little at $100 per month and as much as several hundred dollars.

    Because these fees are a requirment for living within said community, they can deter many from moving in. It is important to also keep in mind that these fees can fluctuate and often increase year-over-year. If the fees do not cover the cost to make such needed repairs, they will need to be raised.

  2. Imposes rules and regulations. Though community rules and regulations may provide structure and stability for its members, they can often feel restrictive and unnecessary. Many HOA rules have to do with the outside appearance of the home and often dictate things like the color one can paint their home, as well as which type of windows and doors they can buy.

    HOA even have the authority to decide what type of decorations or landscaping one can maintain and how many vehicles they can have on their property. If these rules are violated, they often result in a fine.

  3. Repercussions for those who default on payments. In addition to fines for violating rules and regulations set by the HOA board, individuals will be faced with addition repercussions if they fail to pay their fees. Dues will be accrued until the individual pays and in some states, not paying these fees can put individuals at risk for foreclosure.

    Keep in mind that these fees go towards the maintenance of shared amenities and property values. Which means that if sufficient funds are not collected, the community will risk losing vital services that keep the community running properly.

  4. May be run ineptly. Because members of a HOA board are volunteers or elected individuals within the community, the association can, at times, be run ineptly.

    These members may not be experienced enough to run a community and often do not receive proper real estate training. This can often lead to more problems for community members and between those on the board itself.
Mortgage News Matters

4 Benefits of Downsizing to a Townhome

Like a condominium, downsizing to a townhome is a great option for homeowners who are looking for less space and less maintenance in a property.

Though they do require additional costs, like homeowner’s insurance and association fee; Townhomes offer additional advantages, like more privacy and fewer restrictions. To help you decide whether a townhome is the best option for you, we’ve listed four of its major benefits.

What is a Townhouse?

A townhouse is a multilevel residence that is physically attached to a larger group of residences along a given street. Like a condo, a townhouse typically requires ownership. However, they differ in the fact that they are often sold with their plot of land. Which can make them more expensive.

What are the Benefits of Downsizing to a Townhome?

  1. Ownership. With townhomes, there are two different types of ownership: a (1) fee simple and (2) condominium. Condominium ownership means the buyer only owns the inside of the property and the exterior is maintained by the HOA and paid for through regular fees.

    A fee simple ownership, however, gives the buyer ownership of the plot of land the property is sitting on, including the front, side, and backyards. This provides for more freedom with the property, but also requires more maintenance from the owner.
  2. Lower HOA fees. Because they often require less maintenance and have fewer amenities, townhomes typically have fewer HOA fees, in comparison to condominiums. It is important to keep in mind that paying fewer HOA fees does not mean less maintenance for the owner. If maintenance is necessary on the exterior of the home, it is at the owner’s expense.
  3. More Privacy. A townhome typically offers more privacy, because unlike condos or apartments, they only have neighbors on either side of the home, rather than above and below. In addition, townhomes generally have their own yard separate from the publicly shared amenities.
  4. Rules and Regulations. Generally, townhomes have less rules and regulations compared to condominiums. This is beneficial to those who value freedom of expression and less restrictions.

Considering downsizing, but still aren’t sure whether a Townhome is for you? Check out our next blog on the benefits of moving to a Villa.