One of the biggest challenges in the condo market is breaking the news to prospective buyers about HOA fees. No one’s arguing that HOA fees are a necessary part of condo living, but what once looked like a bargain to potential homeowners can suddenly look very much out of reach when the homeowners’ association money is factored in.
So this begs the question — is it better to keep HOA fees lower, or should you get the most bang for your buck?
The argument for lower HOA fees: As stated above, some folks suffer legitimate sticker shock once they factor the fees in. Lower HOA fees can ease some of that hesitation — or outright rejection — and make a property more desirable. Also, if someone buys a condo with low-to-reasonable HOA fees, there’s a better chance that when they go to sell, new buyers will be equally fine with the fees. The downside, naturally, is that the condo complex won’t have the resources to look as good or function as tightly, but those factors won’t matter if no one can afford to live there.
The argument for higher HOA fees: Some prospective buyers might actually appreciate higher HOA fees — the implication is that the condo complex cares quite a bit about appearance and functionality. And that’s true — higher HOA fees can pay for better landscaping, more frequent trash removal, more frequent painting and trimming, higher priority snow plowing, and so forth. It can also build up a better reserve fund to help when the unexpected happens. Also, there’s less likelihood of the fees being raised in the future.
Logically, an HOA would want to find a sweet spot somewhere in the middle and charge “reasonable” HOA fees. But what’s reasonable to one prospective buyer might be entirely unreasonable to another.
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