For most Americans, the most important investment is a home. How do we maintain the value or increase the value of this asset? The presence of a Home Owners Association (HOA) can dramatically increase the value of homes in the neighborhood. Currently, 63 million Americans live in an area with an HOA.
Purpose of a Home Owners Association
The primary purpose of a homeowners association is to ensure that an individual or group cannot negatively impact the market value of homes in the neighborhood. The rules and regulations established by a HOA are designed to protect the value of each property. As a result, rules become a necessity. While many people may be turned off by rule sand regulations, it is one of the primary reasons that HOA remain popular.
Impact Without a Home Owners Association
Neighborhoods with plenty of curb appeal tend to maintain property values better. While it is obvious that well-kept homes, yards, and common areas help neighborhoods stay desirable, it is hard work keeping neighborhoods in pristine condition. Without rules, homeowners would be able to act without consequences. As a result, one or a few homeowners would have the ability to negatively impact the majority.
HOA rules and Covenants
Homeowners associations hold the community to a higher standard, thereby improving the experience for everyone. It is your responsibility, as an owner, to be aware of all of the Association’s rules and covenants, and to abide by them. Your association’s declaration of covenants is part of the public records, and you are deemed to be aware of them, whether or not you have ever read them.
If you make the investment in a home or a condominium, you want to be sure that your property value does not plummet. HOA rules and covenant exist in part to ensure that home and condo owners maintain their property. Because neighboring properties help define the value of your home, it is essential to abide by the rule. Put plainly, it is to everyone’s benefit.
Additional Thought
Neighborhoods are not all created equal. Just because you like a house or apartment’s style does not mean that you will like how the neighborhood looks. A nice neighborhood with well manicured yard does wonders for your property value and comfort. Pride in ownership is obvious when the residents, whether renters or owners, maintain their homes and care about their neighborhood. A pleasant community appearance adds to home values, helps attract business investment, and just improves the neighborhood reputation. A neighborhood can go from being an interesting place with lots of energy to a place nobody wants to be in very quickly.
Yes, HOAs Can Dramatically Increase Property Values
Overall, HOAs can increase property values in the neighborhood by enforcing desirable standards to protect all members’ homes. In the end, it is up to you and your neighbors as residents to make a difference in maintaining and increasing the value of your home and the neighborhood.
This article is very good; however, some HOA’s can take the rules portion to an extreme level.
No. No..no no nnnnno. This is false. Only agents and brokers use this selling tactic for first time home buyers that dont know any better. HOA in general DECREASE home values and selling times and ward off seasoned buyers who know HOAs and their fees can take away from the neighborhood appeal.
A new study in the peer-reviewed journal Critical Housing Analysis finds that property value appreciation is significantly less in homeowner associations. See:http://www.housing-critical.com/home-page-1/
Certainly the specific comparison of homes in specific areas within Homeowner’s Associations vs. homes in the same locations without any HOA in the very limited study Leon Robertson brings up may be accurate. However, with something like a quarter of all homes now within Community Associations in the U S, there are too many variations geographically and in individual Community Associations. Most studies in fact show Community Associations have a positive impact on housing. Community Associations with too many constraints, conditions, over provision of services & fees, and where dog ownership is allowed can bring values down compared to other Community Associations that seem to do it right. I would say the dog ownership is probably less relevant in many cases… depending the geographical area and type of housing development.
Obviously condominiums often provide an affordable choice for first time homebuyers or homebuyers who wish to downsize and minimize their maintenance requirements. HOA’s with limited cost, rules & regulations for beautifully designed homes and neighborhoods in gated communities often help homeowner’s achieve maximum increases in value.