Next video:
Loading the player...

Before you buy property in a community with an HOA, there are nine things you should do.

Number 1, learn its rules. Look online, ask your real estate agent, or contact the HOA directly. Pay close attention to fines and the HOA’s capabilities. Can it foreclose on your property if you don’t pay your dues?

2, make sure the home you want to buy is not already out of compliance with HOA regulations. Buying into a problem will be a headache.

3, assess environmental practices. HOAs may require fertilizers, pesticides, sprinklers and whatever else it take to keep your lawn green. It may forbid xeriscaping and limit garden size.

4, consider your temperament. If you hate being told what to do, HOAs may frustrate you.

5, find out about fees. How are increases set? How often do they occur, and by how much?

6, try to get a copy of the minutes from the last meeting, or sit in on one. You’ll hear what conflicts arise and how they’re resolved. HOAs have lots of politics and drama, so be ready.

7, watch for under-management. With some HOAs, no one really cares. No one maintains buildings or takes the board seriously. Residents may be randomly appointed to preside over it, so be ready for that, too.

8, find out what catastrophe insurance the HOA has on the buildings. Homes in areas prone to floods, fires and other disasters are especially in need of the right insurance.

And 9, consider the impact of HOA fees on your finances. High HOA fees on a condo may cost as much as the house you don’t think you can afford.

  1. No results found.
Related Articles
  1. Investing

    9 Things You Need to Know About Homeowners' Associations

    Restrictive rules and high fees are just some of the things to watch out for before joining a homeowners' association or HOA.
  2. Investing

    How To Form A Homeowners' Association

    Forming and managing a homeowners association is a huge task with significant responsibilities and major implications.
  3. Insurance

    Understanding Homeowners' Associations

    A homeowners’ association (HOA) makes and enforces rules for residents within its jurisdiction.
  4. Managing Wealth

    Tips For Transferring A House Title

    Transferring a house title can be complicated at times. Here are some guidelines to help you get through the process.
  5. Personal Finance

    The Downside Of Cheap Vacation Properties

    Find out about the adverse trade-offs that come with getting a bargain on a vacation home.
  6. Investing

    Dealing With Your Condo Board

    Condo living is a trade-off: the comfort of home ownership for the watchful eye of a condo board. But what happens when a lease dispute arises?
  7. Investing

    Should You Buy Property on Leased Land?

    Find out what to consider before investing in a leased-land property.
  8. Investing

    Want a Weekend Home? Ask These 4 Questions First

    If you're considering buying a weekend home, ask these questions first.
  9. Investing

    11 Hidden Costs Of Owning A Home

    You should be aware of the many additional costs of buying and owning a home, because they can be shocking.
Hot Definitions
  1. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  2. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  5. Indirect Tax

    A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products. An ...
  6. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
Trading Center