Looking for feedback on handling HOA/water/trash

3 Replies

I'm looking to purchase my first rental and just found out that the HOA dues are $165 month. BUT, that amount covers exterior maintenance, water, and trash pickup. The property is a townhouse.

If I include the HOA dues in the rent and try to remain competitive with other rent prices in the same community, the numbers are very tight and only leave about $155 in monthly cash flow.

My question... Would you have the tenant pay the HOA dues directly since it includes water and trash removal, or would you include it in the rent?

If the tenant is to pay the dues directly and just decides not to pay them, could I face a lien against the property?

Absolutely, you would have a lien if the HOA fees don't get paid. Don't rely on a tenant to pay those.
Have you researched the financial strength of the HOA? I would be cautious about tho possibility of future assessments that would drive that HOA fee even higher.

I wouldn't expect to fully recoup the dues on top of the rent. I up my rent by $30 and advertise free water. Free utilities is always a draw, and they usually don't notice I'm priced $30 higher than other units. Only one prospective tenant noticed and he still rented my unit instead of a lower priced one.

Never allow th tenant to pay directly. The HOA can and will foreclose on you for nonpayment of dues.

Thanks for the input. I had a feeling that leaving the HOA dues for a tenant to pay would leave me too exposed for problems.

I have a feeling I've been over thinking this a bit too. As @Ursula B. said, I can just tack on some of the HOA fees to the rent. It doesn't have to be all or none.

Thankfully, only one other unit in the community is up for rent. The rest are occupied or owned so I do have some fudge factor with my pricing.

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