Should Your Next Home Have An HOA?

If you’ve ever bought a home--or considered buying one--you know there are dozens of questions you must answer in the quest for finding your perfect place. In order to calculate how much you can afford, you’ll need to understand how much to budget for the variable additional expenses associated with owning a home. They can range from property taxes to yearly maintenance costs and definitely add up quickly if you’re not prepared.

These costs can also vary greatly, in terms of a single-family home versus a condo. For a while, my wife and I went back and forth on which would be right for us. While we liked the fact that a single-family home is detached and has a yard, we also liked the more affordable purchase price of a condo. Another thing we liked was that we wouldn’t be responsible for taking care of the exterior of the home. But what would the actual savings be, and was the switch worth the difference in price?

Let's look at a comparison of typical costs you can expect when buying a home versus a condo.

Single Family Home: What Types of Maintenance to Expect

For a single-family home, experts suggest a budget of about 1% of your home’s purchase price to cover maintenance costs, with some estimates as much as 4% (depending on your home’s value). These estimates usually cover average routine maintenance, renovations, and unexpected repairs over the span of many years.

Here are the key expenses to consider:

Lawn Care (Frequency: Weekly to Monthly)

If you purchase a single-family home, you will be responsible for your lawn, whether you handle it yourself or hire a lawn care service. If you decide to do it yourself, do you have the equipment? Do you have the time to do it? Alternatively, can you afford the national average of $75 a month to pay for lawn service? That amounts to $27,000 over the life of a 30-year loan.

Mow and Maintain a Lawn Project Cost

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Pool Cleaning

If you’re thinking about purchasing a home with a pool, just know that it takes constant upkeep to keep your pool clean. If you cant spare the time or simply don’t want to learn how to do this, expect about $100 a month to hire your local pool guy to do it for you. That is $36,000 over the life of a 30-year mortgage.

Exterior Paint (Frequency: 3-15 Years)

The life of your paint job depends on the exterior material of your home. Will you be painting the house yourself? If not, the cost of hiring a painter will depend on the square footage of your home, with the national average at about $2,647. If you have a stucco exterior, then you can expect to pay that much every 6 years. That is $13,235 over the life of a 30-year conventional loan.

Roofing (Frequency: Once every 10-50 years from roof build)

The need for roofing will depend on different factors: the age of the home, the type of roof, and/or how well it was maintained in an older home. With all these factors, let’s estimate that a new roof will be needed once after 20 years of ownership, at a cost of $12,000 for your average roof replacement.

Pest Control (Frequency: As Needed)

Bugs or vermin, you don’t want any of these intruders in your home. Depending on the extent of an intrusion, you may need a one-time visit or more frequent monthly visits from your exterminator. This cost is as needed, so let’s factor in a best-case scenario: five single visits over the life of a 30-year mortgage, at a total cost of $725.

That’s one visit every six years or so, so it truly is at the lower end of the estimated spectrum. Plus, it doesn’t account for infestations such as termites, which require more aggressive treatment (and can cause structural damage).

Misc (Frequency: As needed)

This section is reserved for miscellaneous items such as light bulbs, gutter maintenance, hose replacements, and other exterior maintenance expenses. I estimate this to be about $10 a month.

What Is Covered By an HOA?

Most condo HOAs will cover the maintenance costs listed above. You usually won’t have to worry about the cost of painting the exterior of your home, repairing the roof after a hailstorm, or spending your Saturday mornings mowing. Oh, and the best part is, you don’t have to worry about whether to perform the maintenance yourself or hire someone. Your condo HOA usually manages it all!

That being said, the HOA fees for a condo are usually much higher than for a single-family residence. There are single-family home communities with an HOA. These associations usually maintain common areas, such as private parks and community swimming pools, as well as minimal landscaping of those areas. Because of these limited responsibilities, single-family HOA fees are significantly lower than those of condo HOAs.

The actual maintenance covered by an HOA varies from association to association. Because of this, it is essential to ask exactly what is covered by your potential HOA fee before buying your new home.

Comparing HOA Fees to Single Family Home Maintenance

The average HOA fee for the city of San Diego was $296 a month, according to a survey by Trulia. Assuming an HOA covers all of the above-listed maintenance costs, this is how a condo with an HOA would compare to a single-family home:

If you break it down this way, you will find that it is much less expensive to go with a condo (and its accompanying HOA), rather than pay professionals to maintain your exterior.

In addition to this, some HOAs may even cover trash and water services, which will increase your savings in a condo HOA.

Important Questions to Ask

What is right for you? It is all a matter of preference. Are you a do-it-yourselfer who has the time to dedicate to your home projects? Also, is it important to your family to have a detached home, perhaps with more space or a yard? If so, it may be well worth the added expense to invest in a single-family home.

These considerations are only looking at HOAs in terms of cost and coverage, too; there are so many other things to look at when evaluating your prospective HOA. How well is it managed? How often has the fee increased over the years? Are you alright with having strangers tell you what you can or cannot do with your own home? Many HOAs dictate the types of flowers you can plant, the color/style of your mailbox, and whether or not you can mount flags in front of your property. Are you the type of person who would have a problem with those sorts of regulations?

My wife and I looked at all of these factors and ultimately decided on going the condo route. Am I a DIYer? Yes. Do I have the time? No. In the end, those were the only two questions I had to ask.

Before deciding between a condo or a single-family home--or even between single-family homes with and without HOAs--be sure to take a hard look at your lifestyle. What are the most important factors for your family, and how much time or energy do you have to commit to your property? That should help you decide whether the costs (and regulations) of an HOA are worth the peace of mind they often provide.

Sound off below! Are you a fan of HOAs? Have they ever influenced you in the home versus condo-buying process?