6 Ways an HOA Actually Hurts Your Property Value (Despite What They Claim)

Living in a community with a homeowners association (HOA) comes with its advantages. It can seem like a smart homeowner move to buy in an HOA community where you know what to expect and can rely on someone else to enforce the rules.

However, an HOA can also trigger frustrations, whether due to strict regulations or unexpected expenses. Some HOAs get a bad reputation that can actually decrease the value of homes in the community over time.

To make sure you go in with clear eyes, here is what you need to know about how an HOA can actually hurt your property’s value.

If an HOA doesn’t perform its due diligence in hiring contractors and vendors, it might end up overpaying for projects. Eventually, this can lead to increased fees and other costs for residents.

If word gets out that the cost of living in this community has risen because of poor planning, the neighborhood will become less desirable to would-be buyers.

HOA board members on a power trip can make living in the neighborhood the stuff of horror stories.

From determining whether you can put flowers outside your front door to slapping residents with fines for grass that’s slightly too long, an HOA with a bad reputation isn’t good for anyone’s property value.

Special assessments often occur in HOA communities when big repairs arise. Such upkeep can range from a new roof to a new HVAC system or a major pool repair.

Hopefully, there’s enough money in the HOA’s reserves to cover the expense. But even if there is, those reserves will need to be built back up. That could mean you will be hit with a special assessment, which can take the form of a temporary increase in your dues.

If you are trying to sell your unit during one of these assessments, the monthly payment could scare off some buyers.

No matter how well you maintain your individual home or unit, poorly maintained common areas will hurt your property’s value. And unfortunately, there may not be much you can do about it.

If the HOA isn’t doing its part to fix and maintain everything from common entryways to green spaces, your potential buyers are going to assume the worst about the condition of your home, too.

Most people do not want to move into a community where they know they will run into frustrations. If your HOA has a reputation for ongoing disputes with residents, it could impact your property value.

Bad press or negative chatter in the real estate market drives away would-be buyers.

Because the HOA runs the community, you don’t have control over what common areas look like or how they are maintained. This can impact your property’s value.

You might move into an HOA community hoping to eliminate some money stress by sharing the cost of upkeep and additional expenses with other owners. However, sometimes an HOA causes as many headaches as it alleviates.

Make sure you fully understand the extra expenses associated with your HOA before you purchase a home. Ask questions about the current reserves, any upcoming planned assessments, and other costs that could surprise you in the coming months and years.