What are HOA Fees? HOA Fees can seem mysterious or even intimidating to many.
Condo buyers typical ask:
- - What are HOA fees?
- - What do HOA fees go towards?
- - Are HOA Fees Worth It?
- - Why pay an extra fee in addition to taxes and insurance?
HOA stands for Homeowners Association. A Homeowners Association is in charge of running a condo building. An HOA is usually made up of volunteers who own condos in the building themselves.
The easiest way to understand HOA fees is that every HOA is a small business. The HOA fees are the revenue that funds that small business so it can operate.
This revenue provides all the benefits condo owners enjoy. Condo owners typically do not shovel snow, take out the garbage to the curb, sweep the halls, etc. Every HOA has a building maintenance budget which is funded by the HOA fees.
HOA fees are also allocated to the capital reserve. The capital reserve is "money set aside for a rainy day." These large repairs can be anything from a new roof, new mechanicals, contingency expenses, etc.
There are many more allocations for HOA revenue. These are just some examples.
When buying a condo, it is very important to analyze the HOA's budget and financials. You are buying into the building just as much as you are buying the condo.
Our customers are always covered through our HOA Evaluation Checklist. If you have further questions on this or would like us to review your HOA budget, please do not hesitate to book a consultation today.