HOA dues: rip-off, fact of life or screaming deal?
What happens to the dues that condo and townhouse owners pay monthly and grudgingly to their homeowners associations? Select one from the following answers:
1. Association board members bury the funds in the woods, conscientiously marking the spots with leaves or twigs. However, the leaves are blown away, and the twigs are disturbed by animals, so the funds are never recovered and spent.
2. The funds are left indefinitely in HOAs bank accounts and never used, which brings me to this little-known fact: if all HOA deposits were totaled, they would account for roughly 97 percent of the GNP. If more people knew this, the dollar would plummet and we'd be back to using cowhides as our medium of exchange.
3. The funds are typically spent on all the things the owner of a single-family home would have to pay for, including:
· Garbage collection
· Water
· Re-roofing
· Repainting
· Fence repair
· Driveway repair
· Landscape maintenance
· Insurance to repair the building in case it’s damaged
Answer 3 is correct. For extra points, write an essay of not less than eighty words developing the idea that the owners of townhomes get many of these services at a discount. Suggested example: it’s cheaper for a roofing company to re-roof sixty townhouse roofs at one time than to re-roof sixty different single-family homes.
"Okay", you say, "but I wasn't planning on spending my hard-earned money on any of that frou-frou stuff anyway". Well, the city is going to insist that you pay someone to haul away your garbage. And your lender is going to insist that you carry fire insurance on its collateral, which you call "home".
But maybe you're prepared to look me in the eye twenty years from now and say, as someone once did, "no, we didn't put much money into our home when we owned it, so we didn't get much money from our home when we sold it, but we knew what we were doing". Yes indeedy, it was all part of the long-term plan: turn a nice house in a ritzy suburb into something only a bulldozer or a bottom-feeder could love.
Because I can guarantee you that if your home's roof is crumbling, its paint is peeling and your yard looks like Georgia after Sherman got through with it, a) your neighbors stopped talking to you years ago, and b) your friends started wondering about you years ago, and c) potential buyers are going to take one look, cover their children's eyes and run away screaming.
No consequences there, right?
"Okay", you say, "but I still don't like HOA dues because they go up every year". HOA dues go up every year because the cost of repairing and maintaining homes goes up every year. You can't avoid it. It’s a fact of life for people who own homes.
And apparently it's a little-known fact, because a few days ago I ran across a recent survey reporting that most new homeowners had underestimated the cost of maintaining their homes. Maybe it's because we live in a throw-away society where even big-ticket items like cars are disposable. (Like the car I paid $30,500 for a few months ago which sold for $81,000 new six years ago, and in another six years won't be worth enough to keep on the road.) Maybe it's because so many of us lease ("rent") cars that are still under warranty. Pay for gas and oil? Yeah, whatever. Pay for a new paint job? Time to turn it in.
So don't avoid townhomes and condos because of the dues. (You can avoid them for other reasons, but not because of the dues.) Dues cover the short- and long-term costs of owning a home, costs that are unavoidable. Because, like the Fram oil filter ads say, "you can pay me now, or pay me later".