Common wisdom dictates that cheaper is not always better. A pair of shoes that is initially more expensive can save money in the long run by requiring replacement less often. This concept is easy to grasp with physical products, but is unintuitive when it comes to HOA fees. What HOA assessments actually pay for is unclear to most association members which often results in them prioritizing low prices above all else. This can be an unfortunate misstep as associations with too low of fees frequently encounter a number of interconnected problems.
Community maintenance holds many traps for those who seek to cut costs. When it comes to the choice between proactive repairs and cutting fees for the year many organizations will choose the cheaper choice—a decision often praised by the community. But upkeep needs to happen eventually and upkeep before a serious problem occurs is likely to be more cost effective than waiting until the last possible minute. In this way, spending more money can save some. Pro-active maintenance has the added benefit of making the community a consistently enjoyable place to live. It is far better to live in a community making constant minor updates than it is to live in one where infrastructure is decrepit and problems are only addressed when absolutely necessary.
Consistent Costs Are Better Than Surprise Costs
When repairs are needed, one way or another the community will be paying for them. Low HOA fees can be a sign that the HOA doesn’t have much of a fund saved up for emergencies. When emergencies inevitably arise, residents can be issued emergency special assessments to attain funding for resolution of the issue. By nature, these costs are not included in the advertised HOA fee structure. When comparing two similar HOA price structures, the lower one could very well be hiding costs in special assessments.
Inadequate maintenance can lead to bigger issues than out-of-pocket cost or personal comfort. Over time, communities that become dilapidated see lowered property values. Upkeep of the community is essential for anyone viewing their homes as an investment.
Adherence To The Law
There are both state and federal regulations dictating infrastructure must be kept to a minimum standard. Not meeting these standards can cause more trouble than it’s worth. It is the legal duty of the HOA to maintain the property it governs. While resources should be used responsibly and not frivolously, it should be the foremost concern of the HOA to fulfill that duty.
Prices Always Rise
When judging HOA fee structures, a red flag you can look for is if the fees have not be raising over time. Even the most well built structures cost more to maintain as they age and inflation is a small but persistent constant. HOA fees should see marginal increases each year. If they do not, that HOA is likely not planning adequately for future expenses.
Fees aren’t fun, but they are necessary. Skimping on maintenance is only avoiding problems which will spawn into bigger problems down the road. So when considering HOAs make certain not to focus too much on cutting costs…or you could pay the price.