HOAs are on the rise across the nation, with a whopping 84% of new home sales occurring in communities with an HOA. Does this rise in numbers represent a rise in homeowner interest?
Not exactly. Unfortunately, many buyers aren't thrilled to join an HOA in order to buy a new house. This is largely because HOA fees can start to feel out of control.
What should you know about HOA fees before you set your budget for the new year? How can you include homeowners to feel better about what they're paying?
Read on to learn the basics of HOA fees.
How Much Are HOA Fees?
For many homeowners, HOA fees hover between $100 and $300 per month. Rather than setting a superfluous number based on national averages, make sure your HOA fees reflect:
- The income of your homeowners
- The costs you need to cover (e.g., the cost of maintenance in shared areas)
- The extra funds you need to build up a reasonable reserve
Remember, the goal of an HOA fee is to improve the community for everyone, not to impose an undue burden on your members.
Do Renters Have to Pay HOA Fees?
If you own a rental property in a neighborhood with an HOA, you'll need to determine who covers that cost. There are no specific laws regarding who pays, so it will come down to what you put in your lease. Keep in mind that if your renter fails to pay an HOA fee, your property is on the line.
Are HOA Fees Tax Deductible?
Homeownership comes with some hefty tax deductions and, for some, HOA fees can do the same. If you're paying HOA fees for your primary residence, they're typically not tax deductible. If you pay HOA fees for a home you own and rent, HOA fees are tax deductible.
What If I Can't Pay My HOA Fee?
If you (or your tenant) keep up with HOA fees, the first step is to talk to your HOA board members. Failure to pay HOA fees can result in foreclosure in Ohio. Open communication may yield a compromise that doesn't threaten your homeownership.
How to Manage HOA Funds
HOA board responsibilities include talking to residents about their HOA fees. Encourage your community to attend HOA meetings to learn what their HOA fees cover and provide insight about the community's most pressing problems.
Each year, conduct an assessment of finances. If it's possible to avoid increasing HOA fees, do so. If your HOA board is struggling to stay on top of HOA accounting and community maintenance, consider partnering with HOA experts.
Call PMI for Better HOA Management
HOAs are increasing in numbers in Cincinnati and around the country. While many homeowners appreciate the community improvements, they don't always feel comfortable with HOA fees. If you need help with HOA management and community relations, PMI can help.
At PMI, we can provide legal expertise, accounting services, community outreach portals, and more. Let us know how your HOA can stand to improve and we'll get started putting together your HOA management package.