Why as the landlord of my fourplex I still have to pay HOA?

8 Replies

Hi everyone!

I'm new to this great site and would be more than happy to share my investment experiences and also seek some wisdom from all of you! I bought a fourplex this year in Redlands CA, I'm still wondering why do I have to pay HOA fee to this company as I'm the owner of the fourplex? Pardon me if that's a silly question to somebody. Thanks to whoever answers me!!

HOA stands for homeowners association, it takes care of the common grounds in the neighborhood, and of the swimming pool if there is one. All homeowners pay HOA fees towards that, occupants and investors alike. You can have in your lease a clause that the tenants are responsible for the HOA fee, however if it is not paid you are the one on the hook as the homeowner. I pay it myself, and use the free access to the swimming pool as a way to attract more/better tenants.

Hey Rumen, 

Thanks very much for the reply, I guess what I'm trying to ask is that in my case it's just a company that I hires to mow and sweep the common areas on my lot right? Cuz I still pay separately the electricity, water and gas...I'm just really disappointed with all the monthly bills, I always thought the association would do more than just cleaning the place...

When you own property in an area controlled by the HOA, you have to pay HOA dues. Did you investigate what the dues covered before buying?

I hope you didn't go into this thinking cash flow = rent - PITI. Even banks think its only (75%*rent) - PITI and I think that only works if you're doing the management yourself.

Are landlord paid utilities standard for your area?  Or to tenants typically pay?

Hello @Di Chen  

I may actually be familiar with the complex you are talking about. I'm an agent local to the Inland Empire. There are a couple of reasons that your complex has an HOA. I am assuming that there are similar fourplexes surrounding your property. They all share common areas that need maintenance. That is the first reason. The second reason is that a development such that you have bought into was meant for investors that are more hands off. The fact that this particular HOA company doesn't do much more than trim the hedges is kind of pointless in this respect. You are still hands on it seems like. I agree with you that an HOA that only pays to have gardeners is pointless, but there could be more to it. Make sure to read all of the HOA rules. The rules might be keeping the properties protected from renegade owners (Who may want to paint their fourplex bright pink) and thus allowing you to have increased rent. If you are further interested in investing in the Inland Empire, I'd be happy to answer any questions.

Hi Jon, thanks for the tip and now I do think alike...

Hi David, you're right! I'm one of the owners on E Lugonia St who's also dealing with an eviction right this very moment......sadly enough... it just really discourages me as a landlord that I thought this would never happen to me, at least not that soon..., but thanks for all your info man, I'll keep it in mind!

read your HOA governing docs and by laws, some actually require landlords to submit tenant applications and have final say on even lease terms.

As painful as it may be, make sure to pay your HOA dues every month. In CA, HOAs are more powerful than the bank. They can and will foreclose on you if you become delinquent and the amount is ridiculously small (I don't remember the exact amount, but it's less than $5000). They do not have to go to court and they can and will tack on heavy legal fees.

Thank you Sam and Rose for the tips!

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