Learning • Step 3 of 8

HOA: costs, rules, and hidden risks

HOAs aren’t inherently bad — but they add a second financial system on top of your mortgage. Ignoring it is one of the most common (and expensive) buyer mistakes.

What you’re actually paying for

HOA dues usually cover more than amenities. They often fund insurance, exterior maintenance, landscaping, management, utilities, and long-term capital repairs.

Example

A $350/month HOA fee might include: • Building insurance • Exterior maintenance • Landscaping and snow removal • Management company fees • Reserve contributions If reserves are too low, those last two lines quietly disappear.

Summary

Low HOA fees aren’t automatically good. What matters is whether today’s dues realistically cover tomorrow’s costs.

Dues increase — assessments hurt

HOAs can raise dues, and they can issue special assessments when big expenses arrive and reserves fall short.

Example

An HOA hasn’t raised dues in years. Then insurance premiums jump and a major repair hits. • Monthly dues increase: +$90 • One-time assessment: $18,000 due in 6 months

Summary

Dues increases are annoying. Assessments are destabilizing — especially if they hit shortly after you buy.

What to review before you commit

The most important HOA documents are financial, not aesthetic.

Example

Before closing, review: • Current budget • Reserve balance vs upcoming projects • Recent meeting notes • History of dues increases or assessments

Summary

If the HOA’s finances don’t make sense on paper, they won’t make sense after you move in — and you won’t be able to opt out.

← Back Next →