The OC Housing Specialist® Ultimate Guide to Buying, Selling, & Renting in Southern California

Buying Fine Print: HOA Fees


It’s a hot topic here in southern California where monthly HOA fees easily top $500/month on many homes within the area. And it’s not just gated communities and condo associations, HOA {which stands for HomeOwnersAssociation} fees are prevalent throughout the region. Of course, your professional real estate agent will know which areas have them and how much they are. This is where being “in the know” can really be helpful!

While some people prefer to live in a neighborhood with HOA, others would rather not. Here is a quick breakdown of the pros and cons of buying into HOA:

PROS: conformity of housing appearance throughout the community (all homes will look similar in color, landscaping, cleanliness), it is unlikely to have an “eyesore” house with overgrown weeds and an RV parked across the lawn (every homeowner’s nightmare neighbor)

CONS: Low to high cost depending on what the HOA maintains – some HOAs maintain front yards, community amenities like parks, tennis courts, and pools, a guard at the entrance to a gated community, security patrols, etc.

If you consider the financial impact, for every $100 of HOA fee paid monthly, it equates to approx. $20,000 more that could’ve been borrowed towards the house purchase price (estimates based on a hypothetical 30-year fixed 4.25% loan rate). In other words, in another neighborhood with no HOA fees – the same person may have been able to buy a higher priced house.

This often overlooked fee should be addressed early in your home search process to ensure you can maximize your value for your goals in homeownership!


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This entry was posted on March 18, 2016 by in Buying, DIY, Finance, Investment, Relocation.

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