Thoughts on high HOA’s

[Chelsea Price]

I'm looking to buy a MTR condo and market it to business travelers. These types of renters usually don't have kids in tow, don't need yards, and enjoy hotel-like amenities. I don't mind paying an HOA. But where do you draw the line between a reasonable monthly fee and "OMG That's outrageous!" How much are my fellow BP peeps allowing an HOA fee to eat into their profits? What's a good rule of thumb, if there is one? Have any of you purchased a property with a high fee and ended up regretting it??

[Peter Dorinsky]

Quote from @Chelsea Price:

I'm looking to buy a MTR condo and market it to business travelers. These types of renters usually don't have kids in tow, don't need yards, and enjoy hotel-like amenities. I don't mind paying an HOA. But where do you draw the line between a reasonable monthly fee and "OMG That's outrageous!" How much are my fellow BP peeps allowing an HOA fee to eat into their profits? What's a good rule of thumb, if there is one? Have any of you purchased a property with a high fee and ended up regretting it??

Not sure what the HOA's are like in DC, but there are a lot of factors that can drive up the HOA fee, i.e. special assessment, maintenance and repairs, new amenities, increase in insurance premium, etc. Also, I'm not sure if this is something you've considered, but the majority of HOA's (at least where I'm from in Ohio) don't allow condo units to be rented as MTR's, they have to be rented for a minimum of 30 days (LTR). Moreover, the majority of those HOA's have a cap on how many units can be rented, usually a 50:50 ratio. I would recommend thoroughly looking through the bylaws to be sure there are not any restrictions on rentals in the communities you are looking in. With all of that said, I have friends who found great deals on condos and are successfully renting them out as LTR's. Just be cautious and make sure you do your due diligence, I always reach out to the HOA directly to get insight on rental restrictions and history of HOA fee increases.