High vs Low HOA

Here is an unpopular opinion: Low HOA doesn’t mean a better deal - it can mean hidden risk.

What many people don’t realize is that HOA fees are used to build reserves, which is basically a savings account for the building. This money is used to pay for maintenance and future repairs.

When the HOA is low, it often means:

• low reserves

• poor maintenance

• and a higher chance of special assessments

Special assessments mean you have to pay extra out of pocket when the HOA doesn’t have enough money to cover big repairs. It can also be harder to sell the condo, because buyers may have trouble getting a loan on a building with low reserves.

On the flip side, if the HOA is high, you will have a higher monthly payment. And if you try to rent that place out, a high HOA will eat most of your rental income.