HOA Fees: The Basics
One of the biggest ongoing costs of owning a home is the monthly HOA fees you have to pay. When it comes to these fees, many prospective and current homeowners will be left with some questions? How much does the average homeowner pay in HOA fees? Where does the money go, and how does it get spent? This article goes over the basics of what you need to know about Homeowners Association fees.
How Much Should You Expect to Pay in HOA Fees? It Depends.
Many studies suggest that you can expect to pay between $200-$300 a month on HOA fees, but this number varies greatly depending on the kind of house you own and the community you live in. Some HOA fees are as low as $100 a month, while others can get higher than $3,000. These numbers tend to be outliers though.
Your HOA fees largely depend on the kind of amenities that your association provides, but that doesn’t tell the whole story. The cost tends to be higher in communities with older buildings, which makes sense—older structures require more maintenance. Location is also a major factor. Homeowners Association fees in expensive cities like New York, San Francisco, Los Angeles, and Miami Beach are usually quite high, as compared to the national average.
HOA Fees Keep Your Community Running
Simply put, money keep your community running. The fees you pay cover community costs and amenities, such as:
- ● Clubhouses and fitness centers
- ● Entertainment centers
- ● Outdoor recreation areas like pools, tennis courts, basketball courts, etc.
- ● Community parks
- ● Electricity and other utility costs
- ● Maintenance and repair costs
- ● Security costs
If you own a small home in a community without a pool, gym, clubhouse, or other amenities, your monthly HOA fees will likely be quite low. But if you live in a gated, luxury community with a pool, tennis courts, security, and other luxury features, you will pay a healthy amount. You pay for what you get, so if you want to buy a home in a nice community with a lot of amenities, make sure to budget for your HOA fees.
A huge portion of it goes toward paying monthly expenses, but some of this money goes into a reserve fund. This fund allows your association to fund long-term or unexpected maintenance projects, such as repairing security gates, elevators, or other community facilities.
Remember Special Assessments
If an unexpected cost occurs, and your HOA doesn’t have enough in their reserve funds, your association has the right to levy a special assessment. The special assessment is a one-time fee that covers a capital improvement project or an unexpected repair. Generally, associations try to avoid levying special assessments, but sometimes they are necessary. This is something to keep in mind when buying a home.
Do Your Research and Ask Questions
HOA fees vary greatly by area, they can also vary within the same general location. If you have questions about how HOA fees work, you can reach out to a local real estate broker or agent familiar with HOAs. This individual can help you weigh the costs and benefits of different planned communities across the area you want to reside in.
Fees usually change over time, so you should request your community’s fee history so that you can better predict how yours may change in the future. You can usually gather these statistics directly from the HOA. Plss some associations estimate fee changes for the next three-to-five years, which is a great resource for current and prospective homeowners.
HOAs often hire third-party companies to examine what their future expenses should be, based on current needs. You can compare this data to the size of the community’s reserve fund to estimate how much future fees should be.
Does Your Community Association Need a Third-Party Manager?
If your community association needs third-party management, Condo Manager has you covered. Using the latest technology, we can offer the highest-quality association management solutions, such as accounting, financial management, violations enforcement, communications, and more. Our services are remote, meaning we manage HOA and condo associations across the country. If you are looking for remote management solutions for your association, give Condo Manager a call at (800) 626-1267 or contact us online.