THE HONEST BROKER: COMPARING MONTHLY HOME MAINTENANCE COSTS TO HOA DUES
BY: Diane Lott, Broker
Is it less expensive to live in or out of an HOA? This is a question that depends on the individual’s current situation.
At first reaction, buyers tend to reject paying an HOA dues or see the fee as being an additional cost to home ownership rather than a shift of costs of normal home maintenance to a centralized organization to pay those costs for them. For instance, take a home that is not within the authority of an HOA, that homeowner must add up all the monthly costs for the generalized maintenance and repair of their home. The normal maintenance and repair costs probably include care of a pool, roof, lawn, fencing, irrigation, exterior painting, lighting, home insurance, personal expenses of cable, water, sewer, potentially a gym or other social club memberships for health and physical activities, even security costs.
I suggest to my clients that they check their hardware store statements per month, along with all their monthly maintenance costs and decide if they would pay less in HOA dues/month vs. their actual costs of living outside of an HOA.
According to US News & World Report: “on average, homeowners will spend between 1 to 4 percent of a home’s value annually on maintenance and repairs, which tend to increase as the house ages, according to several real estate websites and mortgage firm Freddie Mac. This means that by the one percent rule, you should set aside at least one percent of your home’s value every year for home maintenance. For a $360,000 house, this works out to $3,600 per year, or $300 per month.
Next, let us examine what HOA dues normally pays towards. It depends on the amenities that are offered. This usually includes “common grounds”, which is lawn, landscaping, sidewalks, trails, lighting, and some utilities, such as basic cable and internet. At times, the community is gated and provides increased security. Water, sewer, and garbage disposal can be included. Insurance requirements can be a lot less with an HOA. A clubhouse/gym and activities (pool, tennis, pickleball, etc.) may be available.
Therefore, it is especially important to do a true comparison of costs before making your decision if an HOA community will work for your family.
Stay well and stay healthy!
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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