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HOA vs NO HOA

HOA or no HOA. That is the question.

Homebuyers considering to purchase a home in a gated Home Owner Association community (HOA) or purchase in a non-gated community here in our Coachella Valley is an important consideration before buying. Rule of thumb is the higher the monthly HOA fee the higher the amenities in that community. Buyers who are not familiar with our desert are advised to research and walk through different communities to understand what amenities are offered and the costs associated with them.

The Coachella Valley (Palm Springs to Indio) is a world-renowned vacation community of luxury vacation homes and resort-like condos. Many of our region’s residents live here part-time and expect a resort-like lifestyle. They like the convenience of an HOA to manage maintenance, landscaping and security during the months they spend elsewhere.

HOA dues vary widely from community to community depending upon the amenities (golf course, tennis courts, clubhouse, pools/spas, fitness centers, etc) and services that are offered. HOA dues in condominium communities will generally be higher than those of most single-family home communities. Besides amenities, HOA dues can also include exterior building insurance, maintenance (outside walls. roofs, painting) and landscaping, making it ideal for seasonal homeowners because they can “lock and leave” and not worry about outside maintenance.

Most gated communities (single-family and condominium) fund street maintenance and security through their HOA budgets, board members and HOA managers. Many HOAs also pay for common area landscaping —which can include HOA-owned golf courses — along with pools and owners’ yards. Some HOAs use reserve funds for house painting or roof maintenance every few years; others pass those fees onto residents as special assessments. Some offer golf course or country club memberships as separate costs from HOA dues.

Lenders seriously take HOA fees into consideration approving mortgage loans. A helpful guide for buyers to keep in mind is that every $70 in monthly HOA fees lowers purchasing power by $10,000. So, if a buyer was prepared to spend $300,000 but wants to live in a neighborhood charging $240 in monthly HOA fees, that buyer should consider homes closer to $270,000.

Information is paramount in buyer decision-making.  Budget, lifestyle, and location are important considerations before purchasing. Do your homework before making an offer.  Ask yourself what amenities you want (if any) then visualize living in a gated or non-gated community and the costs associated with your selection.

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